Gold has traded between $1,181 and $1,195 so far today…as of 8:15 am Pacific, bullion is up $1 an ounce at $1,185…Silver has added a nickel to $16.34…Copper is flat at $2.90…Crude Oil is off 31 cents to $58.63 while the U.S. Dollar Index has gained one-tenth of a point to 94.72…
The key piece of economic data today turned out not to be the U.S. jobs report but China’s weak trade data which will likely prompt the government to introduce additional stimulus measures that should support demand for most industrial metals and other commodities as the year progresses…China’s overall imports in April fell 16.2% from a year earlier, compared with a 12.7% drop in March…
“We expect the Chinese authorities to deliver further policy stimulus in coming quarters, which should see growth lift in the second half of the year, supporting demand for commodities,” said Paul Bloxham, chief economist for HSBC Bank’s Australia and New Zealand region in a Wall Street Journal report this morning…
The head of Asia Currency Research at HSBC, Paul Mackel, stated, “After the softness in the import data, you have to expect further easing…the 100-basis-point cut in RRR on April 19 suggests that Beijing may be prepared to be a bit more aggressive than people think,” he stated in a CNBC report…
U.S. Jobs Report Matches Expectations
U.S. employers resumed a solid pace of hiring last month and the jobless rate fell, perhaps priming the economy to snap back from a brutal winter…non-farm payrolls grew a seasonally adjusted 223,000 in April, in line with expectations and rebounding from a weak March, the Labor Department reported this morning…the March figure was revised downward to 85,000 jobs from a previously reported 126,000…
The unemployment rate, calculated from a separate survey of households, fell to 5.4% in April from 5.5% in March as it nudges closer to the Federal Reserve’s expectation of “full” employment, which it pegs between 5% and 5.2%…
Many economists believe the 1st quarter woes were temporary and that the economy will rebound this spring, as it did last year from a 1st quarter contraction…the Fed predicts a bounce back and is looking for hiring to return to a strong pace as it contemplates an interest rate hike for the first time in nearly a decade…
Workers’ hourly wages grew 3 cents to $24.87 and were up 2.2% from a year earlier…that growth is still modest, but it comes after amid other signs wages are slowly picking up from the weak 2% annual pace of recent years…
U.S.Dollar Index Updated Chart
The U.S. Dollar Index retreated to Fib. support at 94 but the March-April double top and a soon-to-be-declining 50-day moving average (SMA) are just 2 of several indicators that suggest additional weakness is likely in the weeks ahead…a bounce higher toward new resistance around 96 could certainly occur, but the main trend remains bearish with the greenback consolidating after such a powerful run from last September to mid-March…
Dollar Index weakness – perhaps even a drop to major support in the upper 80’s over the next few months – would provide underlying support for the Venture and commodities in general…
U.S. 10-Year Treasury Yield Vs. Gold
Gold strengthened at the beginning of the year as the yield on the U.S. 10-year Treasury Note (TNX) briefly dipped below 1.7%…since then, the TNX has climbed back up to the top of its downtrend line (yesterday) and chart resistance at 2.25%…it has backed off this morning to 2.12%…
If for any reason the 10-year yield were to break out above the 2.25% key resistance, Gold could come under pressure given the pattern that has been evident so far this year…interestingly, the RSI(14) on the TNX has formed a bullish “W” and is trending higher on this 2.5-year weekly chart…
We’ll revisit this chart again in the near future if there are any new significant developments…
Today’s Equity Markets
Asia
China’s Shanghai Composite reversed higher overnight following the weak import numbers which have raised expectations of additional stimulus measures…still, the Shanghai suffered its worst week since July 2010 but that was merely healthy profit-taking…
Shanghai Composite Updated Chart
This is quite the chart – when a market or a stock is in an upsloping channel such as this, momentum is hard to stop and smart traders will buy on the dips toward the bottom of the channel…expect this trend to continue for a while yet…Chinese authorities also appear to be using the market as a wealth building stimulus measure…
Europe
European markets were up sharply today as investors cheered last night’s election results in the U.K. which caught pollsters by surprise…
Unlike Albertans earlier this week, voters in the U.K. took no chances with a risky socialist alternative and last night gave Conservative Prime Minister David Cameron a majority government…the Labour Party lost about 2 dozen seats and leader Ed Miliband has resigned…meanwhile, the separatist Scottish National Party (SNP) – sort of the equivalent of the Bloc in Quebec – swept Scotland…this will present Cameron with some unity challenges but he can confront those from a position of strength with a parliamentary majority…the left-of-center Liberal Democrats suffered their worst-ever defeat, dropping from 57 seats to just 8…
North America
The Dow has surged 260 points as of 8:15 am Pacific, thanks to a jobs report that was neither too weak or too strong…in Toronto, the TSX has climbed 91 points while the Venture has added 4 points to 689…
Influential Canadian investor Kevin O’Leary has some blunt advice for international institutions in the wake of the Alberta election: PULL OUT.
“It’s a horror movie unfolding,” O’Leary said in an interview with the Financial Post from New York where he is meeting investors, referring to the election of the NDP under Rachel Notley. “Until we understand what the (Oil and gas) royalties and taxes are there won’t be any material fund flows – it’s a disaster.”
Alberta’s anticipated economic setback will be a gain for other parts of Canada as human and investment capital flow elsewhere, especially into neighboring provinces British Columbia and Saskatchewan with pro-business, mining-friendly, low-tax policies…
Edmonton resident Laura Lynn Johnston’s t-shirt design is making the rounds on social media after federal Justice Minister Peter McKay made the comment, “I guess it’s Albertastan now”…
Albertans still have their sense of humor, for now at least…
Richmont Mines Inc. (RIC, TSX) Update
Richmont Mines (RIC, TSX-V) continues to be an earnings machine…Q1 2015 net earnings were $4.6 million, or 9 cents per share, against a Q1 2014 net loss of $1.9 million, or negative 5 cents per share…Q1 revenues were $37.2 million vs. $29.5 million during the same period last year, as reported by the company yesterday…
Richmont’s accelerated development of its Island Gold Mine in northern Ontario is on schedule and on budget, while RIC’s Quebec assets performed robustly during Q1 with cash costs and all-in-sustaining costs less than expected…
The company has maintained 2015 production guidance of 77,000 to 88,000 ounces, but our guess is that they will beat those expectations…Richmont had $71 million in cash ($1.22 per share) at the end of March and long-term debt of only $5.2 million…a tremendous turnaround for Richmont and the long-term outlook has to be considered exceedingly positive given the expansion of the Island Gold Mine into a deep high-grade zone…
RIC jumped 20 cents on the news yesterday and is off a penny at $3.95 as of 8:15 am Pacific…a downsloping flag has formed in this 4-year weekly chart, setting up the possibility of an important breakout above the $4 level…
Savary Gold Corp. (SCA, TSX-V)
People make the difference…Ross Beatty’s investment into Savary Gold (SCA, TSX-V) in March was a major turning point for the company which commenced a 15,000 m drill program at its Karankasso Gold Project in Burkina Faso (65% Savary) just over 2 weeks ago…
Savary has been a huge winner so far this year, climbing from a low of 2 cents to a high of 11 cents…a cup-with-handle pattern has formed on this 2+ year weekly chart, so a minor pullback would not be surprising as temporarily overbought conditions unwind and the handle takes shape…any weakness could be a good opportunity here…as always, perform your own due diligence…
SCA is unchanged at 9.5 cents as of 8:15 am Pacific…
Note: John, Terry and Jon do not hold share positions in RIC or SCA.
MZI making a strong move today.
Comment by John BMR — May 8, 2015 @ 7:45 am
TTM swapping paper, looking good.
MZI is a watch. Its upswing is due to a SH poster saying to get in it. She has to close at .20 or above today to confirm breakout.
Comment by dave — May 8, 2015 @ 7:57 am
VID should break out after May 15
YFI anytime
Good ones to have on radar.
Comment by dave — May 8, 2015 @ 7:59 am
Oh, reference MZI, the poster on SH was from the KEK board, so I am wondering if this is a false run up. Monday will tell.
Comment by dave — May 8, 2015 @ 8:00 am
LION
Today the following was found in a US Post
Lion One Metals is ready to launch its Tuvatu Gold Project in Fiji, a mining exploration site that received government approval in March 2015 and covers more than 12,000 hectares. Credit: Lion One Metals
Following the approval by the Fijian government to explore the high-grade gold mine on the island of Viti Levu, Lion One Metals is committed to develop the property with local and Asian partners, believing this is an opportunity to show the world that Asian equipment and expertise can meet the challenges of such projects in other parts of the world.
CEO Walter Berukoff said: “We’re very much interested in looking for partners in Asia who are willing to participate in the Fiji venture.”
The much anticipated Tuvatu Gold Project in Fiji was approved in March 2015. The license allows Lion One Metals to explore about 12,166 hectares on Viti Levu for the next 21 years.
As the company sets its sights on reaching the production phase, Berukoff cited the improvement of production through more equipment and technology purchases, and securing more off-take agreements in the Asian market as key strategic priorities, while maintaining strong Asian involvement in all aspects of this project.
He said: “We’re always concerned with expertise and capital required when we operate. I believe the Asian market has the necessary capital and expertise needed.”
Comment by Carl — May 8, 2015 @ 11:09 am
PGX.v a voice from the past
chart is looking interesting
check it out
Comment by ChartTrader — May 8, 2015 @ 11:20 am
Check out the hit by NUG in Nevada. Look at those photos on the front page of stockhouse. willikers, come on WRR, get that drill turning.
Comment by dave — May 8, 2015 @ 11:46 am
Are you planning to do an update on WRR in the near future? Hopefully they get going soon as they have 15 million shares at .02 that become free trading the end of June which is not that far away now. That’s a heck of a headwind for a stock not trading much. I am starting to think this stock was hyped a little too much here.
Comment by Danny — May 8, 2015 @ 3:51 pm
Danny, we’re very much looking fwd to this drill program, and we’ll be following WRR very closely, though it has been frustrating we’ve heard nothing from the company since late March – seemingly putting their timeline off somewhat, though the late March news stated that “on-site activities are slated to begin by mid-April.” The impression most investors had, including us, was that the drilling would have been underway by now. So that part bothers me a little. Having said that, we know how good these targets are, and the bottom line is that WRR should do exceptionally well on some high-grade hits – it’s going to be very hard for them to miss, especially initially. The very quick closing of that second financing for $150,000 above market I think speaks volumes about what’s going to happen here. So patience should prevail.
Comment by Jon - BMR — May 8, 2015 @ 4:11 pm
V.CST was on fire again today with 7.5M shares traded
They have publicly stated there is to be more news this Monday
Comment by Don — May 8, 2015 @ 5:38 pm
GBB… looking bad in price… 3 cents closing may be in history soon… 2.5 cents in sight.
Comment by Theodore — May 8, 2015 @ 5:39 pm
Thanks for your reply. I have been around long enough to know that these companies are always a crap shoot.
Comment by Danny — May 8, 2015 @ 6:32 pm
In the case of WRR, Dan, it’s of course speculative but I believe much better than just a crap shoot. Exact timing can sometimes be difficult with these companies given changing market dynamics and different influences that can come into play. But WRR has all the ingredients you look for to really fly.
Comment by Jon - BMR — May 8, 2015 @ 6:42 pm
No comments on GBB lately. Seems Bullmarketrun is ignoring GBB on this forum? Have a good weekend…
Comment by Arjan — May 9, 2015 @ 2:23 am
GBB CEO has called a special meeting to vote in a share consolidation. He’s stated on the GBB website forum some very revealing thoughts on GBB future. Stock could hit a penny next week.
Comment by Ted — May 9, 2015 @ 4:22 am
Hi Jon,
I have been revewing intesively she sheslay situation in the past days as I am back in Garibaldi.
Event if I think that they could play the waiting game for another season in sheslay, since they are closely managing their cash.
I mean they could play the area game since dbv is doing so good. Drilling in bc is something else that in Mexico with their own equipment.
If they start a drilling campain they have to start at grizzly central to somehow connect with the dbv discovery.
Also their where a picture of a pipe representing a 3d modeling of a deposit at grizzly central on their site two year ago. Can’t find it anymore.
What are your thought?
Have a nice week-end!
Martin
Comment by Martin — May 9, 2015 @ 5:20 am
I made some comments yesterday in this forum, Arjan. Of course the delay in the CA has been extremely unfortunate, it has caused a lot of difficulties for GBB and can be attributable in our view to environmentalists who have hijacked parts of the mining bureaucracy in Quebec. However, last year GBB stated it expected to receive the CA by September – a serious mistake by them to have created those expectations, even if that’s what they were led to believe by the authorities. Last month (April 10), GBB stated, “The company remains confident the last outstanding permit, the certificate of authorization for mining operations, not yet granted by the MDDELCC, will soon be forthcoming and is anticipating quickly moving forward once the last approval is obtained.” Unfortunately, investors are getting tired of waiting, and the stock’s problems are compounded by the selling from the late Dec. PP.
We got excited in December about the opportunities for GBB, with the stock trading around 3.5 cents, given what we thought was the likelihood of a CA by the end of the first quarter, the rising Gold price (especially in Canadian dollars), falling Oil prices, and even the potential of a takeover. Good recipe for higher prices and GBB did firm up. On top of that, the Granada Property has a significant resource with very strong upside potential. As stated by Basa in Thursday’s news, “The Granada gold mine is one of the largest, most advanced undeveloped gold deposits in the Abitibi region that lends itself to staged development.”
Thursday’s news, however, was confusing and did more damage to the stock. This news also introduced the possibility of a rollback which Frank insisted earlier he wouldn’t do. Given all of this, is it any surprise GBB is now trading at 2.5 cents? No.
Comment by Jon - BMR — May 9, 2015 @ 6:14 am
GBB- I and others (Bert- RIP) mentioned that we would never touch a penny stock with so many shares O/S and rollbacks are the risks involved. High O/S causes many issues and for investors, its an uphill battle to move the stock price up! Rollbacks are only good for future investors and not current ones. Although this is unfortunate news for current shareholders if it happens (I believe they don’t have much of a choice), its a good opportunity to get in cheaper post rollback for others like myself that like the potential.
Comment by D4 — May 9, 2015 @ 7:07 am
Is there a possibility that someone could take over GBB before they get the CoA? The last 2 moves by Frank have been to spin out Castle Mines and get the Royalty shares (with a NSR) in to place. They are also carrying on with updating a resource estimate, which may tempt in a producer.
Comment by Tom UK — May 9, 2015 @ 8:53 am
Anything is possible, Tom. There’s no question Granada has value, and a lot more value with a CA.
Comment by Jon - BMR — May 9, 2015 @ 10:08 am