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Happy New Year!…our wish is that 2015 is full of peace, joy, good health and prosperity for each of our readers…

This is a special New Year’s Day edition of Morning Musings with charts for Gold, the Venture, and various market tidbits including information on an area in north central British Columbia that has so far been overlooked by investors as an important recent drilling discovery was announced just 10 days before Christmas at the tail end of tax-loss selling…

BMR is taking a 3-day holiday break Friday, Saturday and Sunday, and we’ll return with Morning Musings Monday, January 5, to kick off the first full trading week of the New Year…

Gold averaged $1,265 U.S. an ounce in 2014 and finished the year at $1,183, down just slightly from where it closed December 31, 2013…in a way, that can be viewed as a victory for the yellow metal given the collapse in Oil prices and a huge move in the greenback – the Dollar Index enjoyed its best year since 2005, and appears poised for more gains during the first half of 2015 given bullish technical and fundamental factors…bullion performed very well against every currency in 2014 except the U.S. dollar…

Commodity Complex Hit Hard In 2014

Oil seems destined to fall through the $50 floor at some point early in 2015 before potentially recovering strongly later in the year when demand is likely more in line with supply, and the Saudis have accomplished their geopolitical aims…clearly, part of their multifaceted strategy is to weaken Iran and its Russian ally…

After a very promising start, it turned out to be a dismal year for the commodities complex with the CRB Index tumbling nearly 30% from its 2014 high to long-term support at 230 New Year’s Eve…

If you invested the right way in Coffee futures, you would have made a fortune in 2014…Coffee was the best-performing commodity as it soared nearly 50%…

Crude Oil was the worst commodity, falling nearly 50%…it got clobbered for both fundamental and technical reasons, and charts suggest we may not see a bottom in WTIC until it hits the mid-$30‘s…

Palladium put in the best performance of any metal, climbing about 12%…many analysts are bullish on Palladium entering 2015, as well as Nickel and Zinc which performed decently in 2014…

Silver was off  nearly 20% in 2014 with the Gold-Silver ratio ending the year at 75.4, significantly above the long-term average of 60, so Silver has some catching up to do…interestingly, while there was more selling in Gold-backed ETF’s in 2014, Silver-backed ETF’s experienced net inflows as retail investors took advantage of the drop in prices…

Argentina & China Lead Global Equity Markets

The best-performing global equity market in 2014? – Argentina, with a gain of 59%…China’s Shanghai Composite took second spot as it surged 53%…John correctly called a major breakout in the Shanghai in late July from around 2200 after an inverted head-and-shoulders bottom, and on the final day of the year it hit a projected Fib. level at 3200…

The Dow posted its 6th consecutive yearly advance, gaining 7.5%, and the chart is quite bullish for the Dow’s prospects in 2015…

Where To From Here For The Venture?

The Venture suffered its 4th consecutive yearly decline, falling a whopping 25% after a 24% sell-off in 2013 and significant drops in both 2012 and 2011…the Venture plummeted 74% from its early 2011 high to its recent new all-time low of 637…

Has the Venture Bear finally exhausted itself – is there hope on the horizon?…

While it’s impossible at this point to predict if we’ve seen the final bear market low in the Venture, there are reasons to believe that from a fundamental standpoint, 2015 should mark a turning point when we may actually see the first annual advance since 2010…the second half of 2015, in particular, could be much different than the last half of 2014 with Oil expected to stabilize and rebound, and Gold likely to benefit from the growing realization that the massacre in the mining sector is leading to a supply problem…

We have 2 charts this morning that should give readers some hope as the New Year begins…

Venture 1-Year Daily Chart

Some extreme oversold conditions emerged during the final quarter of 2014 which potentially may have signaled a “capitulation” event, but that remains to be seen…

In any event, what’s encouraging is that the Venture’s RSI(14) on this 1-year daily chart has broken above a trendline, buy pressure has replaced sell pressure (CMF), and a bullish +DI/-DI crossover (ADX indicator) could be in the works…

What is going to be key during January is whether or not the Venture can push above the downtrend line in place since September, and work its way through resistance toward 800…if the Venture stalls at the downtrend line, that would be bearish…in other words, the Index needs to bust through the 700 area on good volume, maintain that momentum en route to the next resistance at 745, and at least begin to build a strong base in the 700‘s…a band of resistance stretches from 700 to 800…

Venture Long-Term Chart

This chart is quite fascinating…in October, John suggested we may not see a bottom in the Venture until the -DI indicator reached previous peak historical levels…this finally occurred in December as the Index touched a new all-time low of 637, about 40 points below the 2008 Crash low…

Interestingly, on the monthly chart the support at the 2008 low has held – it has been re-established, at least for now, which is important to note…in addition, the %K indicator is beginning to move higher from an all-time extreme low…

Based on this chart, a case can be made that indeed we’ve seen a final bottom in this market…the behavior of the Index during the first quarter of 2015 should help to confirm that…

Gold Chart Update

Gold faces some immediate challenges as 2015 begins – one of them being to overcome resistance at $1,200…

This 5-year weekly chart gives a great picture of what has been happening in Gold since mid-2013…bullion has been bouncing around within a downsloping flag…after a successful test of support at the bottom of that flag in early November ($1,130), it’s reasonable to expect that we’ll see another attempt to break above that flag in 2015 which would mean a test of resistance around $1,300…

For now, then, we see Gold continuing to trade within this downsloping flag…a breakout above that flag, or a breakdown below it, would usher in a new trading range…bullion could easily surprise to the upside or the downside ($1,000?) during 2015, but we do expect higher prices than now by year-end…

British Columbia’s Newest Copper-Gold Porphyry Discovery

Had the timing of this announcement been a little different, more investors would have already caught on to this…rest assured, this important discovery will begin to resonate among astute investors by early in the New Year…potentially, some huge percentage gains could be made in 2015 on some of the juniors active in this general area where a second important discovery could also be in the works…

On December 15, AuRico Gold (AUQ, TSX) announced that a 19-hole drill program (27,000 meters) has uncovered a new mineralized porphyry system at Kemess East, located just 1 km east of the previously delineated Kemess underground deposit and 6.5 km north of the 50,000 tonne per day Kemess mill facility in north central British Columbia (the Kemess South open-pit mine was in operation from 1998 to 2011 and produced 3 million ounces of Gold and 749 million pounds of Copper)…

Drill results show higher grades than Kemess Underground, currently in the permitting stage…a Feasibility Study on that project was released by AuRico in March of 2013 and proposes an underground block caving operation with average annual production of 105,000 ounces of Gold and 44 million pounds of Copper over a 12-year mine life..

Some are calling the AuRico Kemess East results the best B.C. porphyry discovery since the Red Chris deep hole in 2008, and what this is going to do is revive interest not only in this area but in other B.C. Copper-Gold porphyry targets…are there opportunities here for investors? – absolutely…

AuRico closed 2014 at $3.85…check the bottom of today’s report for a very revealing AUQ chart…

Kemess East Discovery

Highlights of the drilling at Kemess East include:

768 m of 0.44 g/t Au and 0.39% Cu including 132 m of 0.75 g/t Au and 0.50% Cu in KH-14–04;

304 m of 0.56 g/t Au and 0.42% Cu including 76 m of 1.2 g/t Au and 0.66% Cu in KH-14–09;

601 m grading 0.50 g/t Au and 0.39 % Cu including 278 m of 0.71 g/t Au and 0.48% Cu in KH-13–08.

We’re going to see much more out of Kemess East in the near future with AuRico announcing an expanded drill program that will focus on additional delineation of this system as well as more exploration drilling…preliminary mineralogical assessment indicates that Kemess East has similar characteristics to the adjacent underground deposit…

AuRico has also stated that it expects to produce an initial resource estimate for Kemess East in early 2015…

Quesnel Trough Map

Below is a map taken from the Kiska Metals‘ (KSK, TSX-V) web site which shows the Kemess area and how prolific the “Quesnel Trough” is…it’s not surprising AuRico has made a discovery right next to Kemess Underground…there are undoubtedly more discoveries to be made along this trend, which includes the operating Mt. Milligan mine (2 billion pounds of Copper reserves and at 6 million ounces, the second-highest Gold reserves in the country)…

We specifically draw your attention to Kiska’s Kliyul Project, optioned by Teck Resources (TCK, TSX) which has planned an upcoming drill program at this exceptional target which could easily produce another major Quesnel Trough discovery about 65 km southeast of Kemess…

Kiska is trading at a mere 4.5 cents – KSK is one of our “sleepers” that could erupt in 2015 – while Garibaldi Resources (GGI, TSX-V) recently expanded its Red Lion holdings (bordering Kliyul) to 45 sq. km due to “extremely strong” geochemical signatures…interestingly, Teck is on GGI‘s doorstep on 2 important fronts – Kliyul, and Grizzly, and it wouldn’t surprise us if there are discussions of some sort between the 2 companies…GGI has a powerful situation building in Mexico, but the dynamics in B.C. for GGI have become more interesting than ever…

Meanwhile, Lorraine Copper Corp. (LCC, TSX-V) is worth keeping on one’s radar screen – it made a brief run last summer on speculation surrounding an “expression of interest” from another company with respect to its Lorraine property (in between Kliyul and Mt. Milligan) which is held in a joint venture between Teck (51%) and Lorraine (49%)…

Some majors are definitely actively looking at B.C. projects…with geological possibilities that we see from just this 1 map below, there’s no wonder…

AuRico Gold Chart

Kemess East could be what ultimately allows AUQ to overcome the long-term downtrend line shown in John’s 3-year weekly chart…

We’ll keep an eye on this one for a potential move at some point in 2015 above the downtrend line – that would constitute a major breakout…base support is at $3.50…

Note:  John and Jon both hold share positions in GGI.