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Gold, which has experienced five consecutive monthly declines, has traded between $1,571 and $1,583 so far today to begin the new week…as of 7:15 am Pacific, the yellow metal is down $1 an ounce at $1,576…Silver is flat at $28.58…Crude Oil is down slightly at $90.57 while the U.S. Dollar Index is relatively unchanged at 82.31…

PDAC Underway

The 81st Annual Prospectors & Developers Association of Canada (PDAC) convention kicked off yesterday and continues through Wednesday…over 30,000 people are expected to attend the mining convention that brings a mix of investors, analysts, mining executives, geologists, prospectors and international government delegations from around the world…“Canada leads all countries with 18% of the world’s mineral exploration spending and Toronto is the global capital of mining finance – it makes sense that we host the industry’s most important networking and educational event here,” said PDAC President Glenn Nolan in a news release…“We’re looking forward to another banner year for the PDAC convention”…in 2012, 30,369 people attended the convention in downtown Toronto, with roughly 7,500 international attendees from 125 different countries…the so-called “PDAC” curse struck the markets the last two years with the Venture Exchange falling sharply in March, 2011, and again last year following the convention…this time around, it struck early as the Venture plunged 7.3% in February – by far its worst February performance ever…

Today’s Markets

Asian markets were mostly lower overnight, led by the largest single-day drop in China’s Shanghai Composite since November, 2010…the Shanghai tumbled 86 points or 3.65% to 2273 after Beijing announced an increase in down payments and loan rates to contain rising home prices…more property curbs could be on the way…China will certainly be in focus this week as the annual Chinese People’s Political Consultative Conference began yesterday while the National People’s Congress begins tomorrow with the Congress expected to confirm Xi Jinping as president…Japan’s Nikkei average bucked the trend in Asia, however, and briefly touched a fresh four-and-a-half year high as comments from the government’s nominee as the next Bank of Japan governor fueled hopes for aggressive monetary easing…European shares are mostly mildly lower today…the Dow is off 50 points through the first 45 minutes of trading while the Venture Exchange has fallen another 9 points to 1111…there is Fibonacci support at 1104 (check John’s weekend chart)…

TSX-TSX Gold Index Comparative Chart

Below is an interesting 5-year weekly TSX chart from John that compares the Composite Index with the TSX Gold Index…the “correlation coefficient” is just beginning to bounce off a new low – the divergence between the two in recent months in particular has been extreme with the TSX climbing nearly 10% since mid-November while the Gold Index has tumbled 20% during that same period…generally, since the early summer of 2011, the Gold Index and bullion itself have moved in the opposite direction of the general market…this trend should be expected to continue, though what that means for the Venture Exchange is anyone’s guess…the uptrend in the TSX is weakening, so we do expect the producers to perform better along with Gold in the near future…as we pointed out over the weekend, investor sentiment toward the Gold sector at the moment is at extreme lows not seen since the 2008 Crash…

New Gold Inc. (NGD, TSX)

We’ve stated this on numerous occasions – one of the best-run Gold producers in the business is New Gold Inc. (NGD, TSX), and we encourage investors to study in detail the company’s latest financial results that came out last Thursday…New Gold, which has four operating mines at the moment, posted record net earnings in 2012 and delivered on its operational guidance for the fourth consecutive year…the company continues to ramp up production while keeping costs down, a simple formula for success…its estimate for 2013 all-in sustaining cash costs (includes total cash costs, corporate general and administrative expenses, exploration expenditures and sustaining capital) is $875 per ounce…New Gold made one of the smartest moves of any producer in recent years when it acquired Richfield Ventures and the Blackwater deposit in 2011 and then consolidated a huge land position in the area…the PEA for Blackwater released last September shows robust economics for the project which is expected to produce approximately 500,000 ounces of Gold per year (NGD produced just over 400,000 ounces of Gold in 2012)…if you’re looking for a long-term growth stock in the Gold sector, it would be hard to go wrong with New Gold…

Below is an 8-year NGD chart from John that shows very strong technical support around the $9 level and a resistance band between $12 and $14…NGD climbed 57 cents over the last two trading sessions to close Friday at $9.49…as of 7:15 am Pacific, NGD is unchanged at $9.49…

Updated Silver Long-Term Chart

As regular readers know, each Monday morning John provides updated Silver charts…we’ll begin with the long-term chart this morning which shows the RSI(2) indicator has slipped to 18% – one of the lowest levels reached over the past decade…it could still drop a little lower but a level such as this, especially with Silver trading in the high $20’s, is clearly a bullish signal…history proves that the time to be very cautious is when the RSI(2) approaches 90 and the time to be back up the truck and load up is when this indicator slips below 20…”Wave 5″ is still valid even if Silver dips to critical support at $26…this is a great time to be investigating quality Silver stocks with even better buying opportunities possible this month if Silver tests the $26 level which should hold…

Updated Silver Short-Term Chart

The short-term Silver chart shows support holding for now at $28 with RSI(14) at 31%, just off its recent lows…impossible to predict, based on this chart, if the $28 level will hold – if not, $26 is the key level to watch…in any event, Silver (like Gold) is in the process of forming an important bottom when all factors are taken into account…

TomaGold Corp (LOT, TSX-V) and Quinto Real Capital (QIT, TSX-V)

We were on top of the Monster Lake discovery near Chibougamau, Quebec, since the morning of February 20 when TomaGold Corp. (LOT, TSX-V) and Quinto Real Capital (QIT, TSX-V) reported some stellar results from the first three holes of a 2,500-metre drill program…both stocks have performed extremely well, even in a bad overall market environment, which shows there is still plenty of money on the table looking for legitimate discoveries…the next results will be critical…if they exceed the market’s expectations, both LOT and QIT could really soar though we prefer QIT given its share structure and the fact it has an option to earn up to a 70% interest in the project…below is an updated chart for LOT which has resistance at 35 cents…keep in mind, this discovery in its early stages and both LOT and QIT can be expected to be extremely volatile…the next set of results will dictate where the share prices are headed…

Note: John, Jon and Terry do not hold positions in NGD, LOT or QIT.