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For the second time in a week, Gold has reacted at the Fibonacci $1,484 resistance level…bullion traded as high as $1,489 overnight but has since given up those gains as it went into reverse following release of the U.S. April jobs report which was slightly better than expected…as of 7:00 am Pacific, Gold is unchanged at $1,467 after dipping as low as $1,455…Silver has backed off as well but is still positive for the day, up 17 cents at $24.00…Copper has made a big move today, gaining 16 cents to $3.26 thanks in large part to a sharp decline (the second-biggest in 4 years) in LME inventories…Crude Oil is up $1.00 to $94.99 while the U.S. Dollar Index has fallen nearly one-tenth of a point to 82.14…

If and when Gold is able to conquer the $1,484 level on a closing basis, then a near-term challenge of the 50-day moving average (SMA) around $1,540 becomes the next major “test” area…a move above $1,500 on a closing basis would also give a psychological lift to investors and act as a shot in the arm for Gold stocks…as we’ve seen again today, though, there is major resistance immediately underneath $1,500…this is a volatile market, a war between bears and bulls, with a lot of games being played…20 analysts surveyed by Bloomberg expect bullion to drop next week, with nine bullish and four neutral, the biggest proportion of bears since February, 2010…data compiled by Bloomberg also show that investors sold 174 metric tons through ETP’s last month, and $17.9 billion of value was wiped out…“The fundamental picture, for now, has changed”,  said Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Copenhagen, in a story carried by Bloomberg…“The investment community or those trading paper Gold in futures and ETP’s are still heading for the exit”…Arizona Governor Jan Brewer vetoed a measure yesterday that would have made Gold and Silver legal tender in the state, saying the legislation could have resulted in lost tax revenue…the Republican-controlled state legislature voted through the measure last month in a response to what backers said was a lack of confidence in the international monetary system…the bill called for Arizona to make Gold and Silver coins and bullion legal tender beginning in mid-2014, joining existing U.S. currency issued by the federal government…

The Case For Victory Ventures Inc. (VVN, TSX-V)

Yesterday, we described Victory Ventures (VVN, TSX-V) as a “tanalyzing speculation” given its current low market capitalization ($1.1 million) and the fact it’s getting ready to commence a drill program in the immediate vicinity of Colorado Resources‘ (CXO, TSX-V) Copper-Gold discovery in northern British Columbia…this is not a case of a company with some “cow pasture” near a discovery that it’s trying to promote…in fact, in early February, nearly 3 months before Colorado’s announcement that it had drilled 333 metres grading 0.51% Cu and 0.67 g/t Au in its first hole at North ROK, Victory had secured the drill permits for its highly prospective Copau Property and announced its intention to commence a drill program by the middle of the year…a ground magnetic survey located a pronounced northwest-southeast linear-trending anomaly throughout much of the Copau claim area, and this encouraging information was then backed up by an IP survey that located a strong chargeability response underlying the southwestern portion of the property…the chargeability anomaly occurs from depths of approximately 200 metres with increasing response to 450 metres (similar to patterns at North ROK), which was the maximum reading depth of the IP…the present known extent of the anomaly varies between approximately 300 and 400 metres wide (east-west) and over 1,200 metres long (north-south), appearing open to both the west and south and at depth…Copau is situated within the prolific “Golden Triangle”…just 11.5 km to the south is Imperial Metals’ (III, TSX) Red Chris Mine which is expected to go into production next year…just 4 km to the north of Copau is Colorado’s North ROK Property…meanwhile, Colorado is also currently drilling the Eldorado Property which is just a couple of kilometres from Copau…so there’s plenty of activity in the area…more good results from Colorado (from either North ROK or Eldorado), and speculation regarding drilling at Copau, could give investors a real victory with VVN…and if there’s a hit at Copau, look out…with just 20 million shares outstanding, and a 6.5-cent stock price, the potential leverage investors have with VVN is truly huge…yes, this is risky exploration and there’s never a “sure thing” in the market…only invest money that you can afford to lose…but the geological case for this particular region of British Columbia is very powerful…unfortunately, due to the horrible market conditions in the junior resource sector this year, many investors are simply not paying attention right now, and that’s a mistake…it’s often in conditions like this that the greatest opportunities present themselves…there are no guarantees, but we see a great opportunity for a BIG victory in VVN…

U.S. Economy Creates 165,000 Jobs In April, March Numbers Revised Sharply Upward

The U.S. April jobs report came in slightly better than expected as the economy created 165,000 jobs and the unemployment rate fell from 7.6 to 7.5%…the March jobs number, meanwhile, was revised sharply higher from 88,000 to 133,000…February payrolls were also revised higher from a gain of 268,000 jobs to 332,000 jobs…there’s no question the U.S. economy is suffering some pain at the moment from tax increases and some across-the-board spending cuts that began at the beginning of March, but some analysts say that fears about a major spring slowdown have been overblown…
equity markets are reacting positively this morning…

Today’s Markets

Asian markets were mixed overnight with Japan’s Nikkei average losing 105 points to finish the week at 13694, while China’s Shanghai Composite gained 31 points to close at 2205…European shares are moving higher in late trading overseas, thanks to the U.S. jobs report..meanwhile, 3 of the euro zone’s five largest economies (France, Spain, and the Netherlands) will fall short of EU-mandated deficit limits this year as the bloc’s recession continues to deepen, according to highly anticipated European Commission forecasts published this morning…in North America, the S&P 500 has crossed 1600 for the first time while the Dow has also hit a new all-time high, trading just beneath 15,000 through the first 30 minutes of trading…the TSX is up 106 points while the Venture has gained 4 points to 967…Colorado Resources (CXO, TSX-V) is up another 7 cents to 96 cents while Victory Ventures (VVN, TSX-V) has gained a penny to 7.5 cents on a fresh surge in volume…

John’s chart below shows the TSX in comparison with the S&P 500, the Canadian dollar and the CRB Index over the last 9 months…the TSX strongly under-performed against the S&P 500 from the beginning of March through mid-April, but has been keeping pace since…

HXD Chart Update

The HXD (the Horizons S&P/TSX 60 Bear Plus ETF) came within just 15 cents of John’s Fibonacci target ($9) recently and is pulling back toward strong support at the $8 level, which would equate to about 12550 on the TSX where the declining 50-day moving average (SMA) currently is…the 100-day SMA is just slightly above the 50-day, so that’s where significant resistance can be expected on the TSX…below is a 6-month chart for the HXD…

Discovery Ventures (DVN, TSX-V) Updated Chart

Discovery Ventures (DVN, TSX-V) appears to be back on track after falling as low as 14.5 cents during April’s market sell-off…the company continues to work toward bringing its Willa deposit in the West Kootenays into production…important information to take note of is the company’s announcement April 23 when it stated, “(Discovery Ventures) has initiated several technical and corporate due diligence efforts on assets held by Roca Mines, including its wholly owned subsidiary FortyTwo Metals Inc., the owner of the Max molybdenum mine…Max is a 500-tonne-per-day operation (currently on care and maintenance) located 125 kilometres away from the company’s Willa deposit that could serve as a potential site for the processing of mineralized material extracted from the Willa property”…Discovery had slightly more than $2 million in cash as of the end of December, according to its latest financial report…

Note: Jon holds a share position in Victory Ventures (VVN, TSX-V)