Gold has traded between $1,392 and $1,413 so far today…as of 6:50 am Pacific, the yellow metal is down $13 an ounce at $1,398 after climbing more than $20 yesterday…Silver is off 29 cents at $22.45…Copper is up 3 pennies at $3.35…Crude Oil is 51 cents lower at $92.94 while the U.S. Dollar Index is up one-tenth of a point at 82.83…
Societe Generale says it’s maintaining its bearish view on Gold, saying it expects the Federal Reserve to begin tapering its purchases of bonds to stimulate the U.S. economy…the bank notes that while ETF redemptions have slowed, the market is dealing with the impact of the sales…”Net redemptions over the month of May were 125 (metric tons), taking the sales for the year-to-date to 481 (tons)…in the first five months of 2012, the funds absorbed just 13 (tons),” they stated…the bank plans on issuing a new outlook for Gold soon…
UBS says this Friday’s U.S. monthly jobs data could be critical in terms of determining Gold’s short-term direction…”While a strong print is likely to embolden shorts and potentially threaten the resolve of longs, a negative surprise is likely to trigger a stronger positive response considering the amount of (short) Gold trades around at the moment,” UBS stated…the bank added that a “strong fundamental catalyst would be required to unnerve the vast majority of (short traders) in the near-term”…
Updated Copper Chart
Gold is important but the direction of Copper is also a critical guide when analyzing the Venture Exchange which plummeted with the metal beginning in February and hit a multi-year low of 918 in mid-April as Copper slid to its lowest price ($3.04) since late 2011…Copper has been showing resilience recently, however, in the face of a 10-year high in warehouse inventories – though it’s important to point out that most of that supply is controlled by just two firms, restricting Copper supply available to the market…the Copper chart gives us confidence that the Venture can continue its recovery…RSI(14) is showing up momentum in the 2.5-year weekly chart below, and the overall bearish trend is weakening…for 5 weeks Copper has traded and tested the $3.30 support area which has held…
Updated Venture Chart
A 3-month daily chart shows how the Venture is positioned for a possible breakout in the near future above critical resistance at 970…selling pressure turned into buying pressure immediately after Colorado Resources‘ (CXO, TSX-V) Iskut River discovery in late April, RSI(14) is showing strong up momentum, and the ADX trend indicator is almost at the point of a bullish crossover…like with Gold, what appears to be a double bottom pattern formed in the Venture between mid-April and mid-May…the rest of this week will be interesting as the Venture attempts to push through 970…it could stall for now and try again next week or later this month – we’ll have to wait and see, but the critical point is that the trend is more encouraging than it has been in quite a while…the rising 10-day moving average (SMA) at 955 should provide support…
Canadian Dollar Update
Interestingly, significant rallies in the Venture have followed low points in the Canadian dollar over the past 3 years…we’ll see if that trend continues…the dollar hit 96 cents last week for the first time since the May/June period last year, and appears poised to start a recovery phase that could take it back to resistance at 99 cents…
Today’s Markets
Asian markets were mixed overnight with Japan’s Nikkei average falling 272 points to 13534…China’s Shanghai Composite fell 27 points to 2272…European shares are modestly higher in late trading overseas…producer prices for the euro zone showed a 0.6 percent month-on-month drop in April, the biggest monthly decline since July, 2009, according to the EU’s statistics office…amazingly, the Dow has closed higher for 20 consecutive Tuesdays, smashing the previous record of 15 consecutive positive Tuesdays set in 1927…through the first 20 minutes of trading, the Dow is up 40 points at 15294…the TSX is off 7 points while the Venture is down 1 point at 968…
Azincourt Resources Inc. (AAZ, TSX-V)
A company we suggest our readers put on their radar screens is Azincourt Resources (AAZ, TSX-V) which cut a deal with Fission Uranium (FCU, TSX-V) recently to earn up to a 50% interest in Fission’s Patterson Lake North Project (PLN)…the 10 contiguous claims total 27,400 hectares in the southwest area of the Athabasca basin, immediately north and adjacent to the Fission-Alpha Minerals (AMW, TSX-V) PLS discovery…Fission spent nearly $5 million on exploration at PLN ranging from airborne to ground geophysics to first-pass drilling of a few select targets…a portion of the property is currently drill-ready but other areas require further ground geophysics and interpretation in order to bring them up to the drill-ready stage…Azincourt had about $500,000 in working capital at the end of March and will obviously need to raise more dollars, but a tight share structure (only 14 million O/S), strong management team and a property of strong merit are important factors all in their favor…AAZ closed at 32 cents yesterday…
Zenyatta Ventures (ZEN, TSX-V)
Zenyatta has been red-hot lately, posting gains in 10 out of the past 11 sessions…it’s up again slightly in early trading this morning…the recent move above resistance at $2.28 was technically very significant…below is an updated chart from John…
Note: John, Jon and Terry do not hold share positions in AAZ or ZEN…
