Gold has traded between $1,292 and $1,315 so far today…as of 8:30 am Pacific, bullion is down another $9 an ounce at $1,298 after yesterday’s plunge…Silver is a dime lower at $20.80…Copper is unchanged at $3.24…Crude Oil has fallen $1.77 a barrel to $99.14 while the U.S. Dollar Index has strengthened one-fifth of a point to 80.37…
Yesterday’s $30+ drop was Gold’s steepest single day decline since December 19 (a previous excellent buying opportunity) when traders were digesting the Fed’s announcement that it would begin winding down its stimulus program…the winds of volatility are shaking a few loose apples from the tree and are also helping to unwind some temporarily overbought conditions that emerged at the end of last week – the third straight week of gains – as shown in John’s updated 6-month daily chart this morning…potentially impacting Gold today and tomorrow will be Janet Yellen’s Congressional testimony on interest rate policy and the economy…she will follow today’s discussion with the Senate Banking Committee with testimony tomorrow before the House Financial Services Committee…the sharp drop in Gold yesterday came amid speculation in some circles that Yellen would present a more hawkish view on monetary policy in her two days of testimony given recent encouraging U.S. data…
Interestingly, holdings in the SPDR Gold Trust – the world’s largest Gold-backed exchange-traded fund – rose 8.68 tonnes to 808.73 tonnes yesterday, according to Bloomberg data…but domestic prices in top buyer China fell to a discount to the global benchmark today, from being on par in the previous session, in a sign of weak physical buying…demand in other parts of Asia is also subdued, dealers said…
Israel accepted an Egyptian-proposed deal today to end its week-old air war with Hamas, but the Islamic terrorist group (certain mainstream media like to refer to Hamas as a “movement”) rejected a truce (saying it wasn’t consulted by Cairo) and continued its rocket barrages into Israel…Israel has responded by resuming its attacks on the Gaza Strip to go after Hamas…there are plenty of hotspots around the globe to underpin support for Gold…
Today’s Equity Markets
Asia
China’s Shanghai Composite edged slightly higher overnight while Japan’s Nikkei average climbed 98 points to a one-and-a-half week high after snapping a five-day losing skid yesterday…as expected, the Bank of Japan left monetary policy unchanged following a two-day meeting but the central bank did cut its economic forecast for the current fiscal year to 1% from an earlier projection of 1.1%…
Europe
European markets were down modestly today…
North America
The Dow is off 6 points at 17049 as of 8:30 am Pacific…U.S. retail sales increased less than expected in June as receipts at automobiles dealerships surprisingly fell…however, so-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of GDP increased a solid 0.6% in June…
Interesting remarks from Yellen this morning in the full policy report accompanying her testimony. “Valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year.”
The TSX is down 70 points while the Venture has slipped 10 points to 1010 as of 8:30 am Pacific…RSI(2) on the Venture on the 1-year daily chart has hit an extreme low with the Index in an area of solid support…
Venture 3-Year Weekly Chart
This fresh 3-year weekly Venture–Gold comparative chart shows the Venture’s RSI(14) continuing to follow an uptrend line while holding at a modest 56%…the trend suggests that we can expect later in the third quarter is the RSI(14) to push into the overbought zone for an extended period…notice the importance of the Venture’s move above its long-term downtrend line late last year…
A strong Venture support band exists between 1000 and 1020…
Gold 6-Month Daily Chart – Levels To Watch
What’s important for Gold is to make a sustained move above a well-defined resistance band between $1,320 and $1,330…the surge late last week could not be sustained, perhaps due in part to temporarily overbought conditions, and on an intra-day basis the metal also came within just a few dollars of chart resistance at $1,350 as previously noted…a reaction therefore was not surprising…
This morning, Gold has fallen below a chart support band between $1,306 and $1,310, contributing to more technically-driven selling…
There is strong Fib. support in the $1,280’s that also coincides with the 200-day moving average (SMA), so that’s an area bullion may have to test…
RSI(14) on this 6-month daily chart has quickly unwound and is now below 50%…
10-Year Treasury Note-Gold Chart Comparative
Worries about higher interest rates do haunt the Gold market, a zero-yielding asset, but they should also haunt governments – federal, state and provincial – who are concerned about the fragile economy recovery and their own debt-servicing costs…
Below is an “awareness” chart (20-year monthly) that compares the 10-Yr. U.S. Treasury Note yield with Gold…interestingly, you can see how a “squeeze” is developing in the 10-Yr. Treasuries…will be interesting to see during the second half of this year if there’s a confirmed breakout above the downsloping channel…
Silver 6-Month Daily Chart – Levels To Watch
Silver’s temporarily overbought condition is unwinding with RSI(2) on this 6-month daily chart plunging below 20% yesterday after climbing into the mid-90’s…
Strong chart support exists at $20.75 with Fib. support ranging from $19.50 to $20.33…critical resistance around $22…
Kaminak Gold (KAM, TSX-V) Update
John’s June 12 chart on Kaminak Gold (KAM, TSX-V) hinted of good things to come when the stock was trading in the 80’s, and KAM really ignited yesterday following the news of a strategic private placement…the company announced it had entered into subscription agreements with Ross Beaty and Zebra Holdings (a company owned by a trust which settlor was the late Adolf H. Lundin)…the purchasers have each agreed to make an investment of $6.76-million (collectively $13.52-million) into Kaminak by way of a non-brokered private placement at 80 cents per unit…the company’s cash position will be approximately $26.5-million following completion of the PP…last month, investors responded favorably to results from a NI-43-101 Preliminary Economic Assessment for Kaminak’s Coffee Project in the Yukon…
Two important comments regarding this chart which are things to look for in other situations – note how KAM broke above a long-term downtrend line earlier this year, retraced to the downtrend line which became new support, and formed an inverted head and shoulders pattern in the process…technically, this is yet another example of how the junior resource market has bottomed when you see charts like this…some minor near-term consolidation is possible (KAM does face some resistance around the $1 level) but any weakness should present a good opportunity for later this quarter, especially now that Beaty is a significant shareholder…
KAM is up 3 pennies at $1.08 as of 8:30 am Pacific…
Condor Resources Inc. (CN, TSX-V)
We continue to keep a close eye on Condor Resources (CN, TSX-V) which has more results coming from its Soledad Property in Peru (under option to Mariana Resources Ltd.)…the key will be SDH-012, another deep hole that visually may have been intriguing given the language used in the news release (this was a near-vertical hole, drilled to 437-m depth in breccia No. 5, to test for possible higher-grade feeder zones and indications of underlying mineralized porphyry)…
CN reported a very interesting drill result July 3 from Soledad as the first deep hole (SDH-009) returned 174 m of mineralized breccia (from 92 m to 266 m) that averaged 4.4 g/t Au Eq (0.74 g/t Au, 114 g/t Ag and 1.2% Cu)…
Technically, the key for CN will be to push through resistance at 14-15 cents on a closing basis…after its initial run-up July 3-4 from 7 cents to a high of 15 cents, CN retraced to Fib. support between 9 and 11 cents, as expected, before rebounding and climbing as high as 17 cents intra-day Friday, though it closed Friday at 14.5 cents…patience is key and waiting for more results is likely the wisest strategy…
CN is off half a penny at 13.5 cents as of 8:30 am Pacific…this is yet another stock that has broken out above a long-term downtrend line…
Note: John, Terry and Jon do not hold share positions in KAM or CN.
The drop in the POG over the last couple of days has nothing to do with any unwinding of any over bought position but is a direct result of a not for profit seller dumping over 17000 sell contracts on the comex on both days. Around $5 billion worth of gold short sold by a certain entity or entities who dont want a higher gold price. Also Yellen will continue to be the top purchaser of US treasuries whether she does it through some Belgian operation covertly or not. If she doesn’t there are no buyers at these ridiculously low rates. In Zero Hedge (15/07/2014) is an article which discusses all of this in detail.
Keep up the good work on the share front. Surely GBB deserves a mention as it has bursted out of a very long down trend line.
Comment by patrick — July 15, 2014 @ 8:05 am
Jon
gold is manipulated by JP Morgan and the US government, simple as that… silver too..
Comment by Greg — July 15, 2014 @ 8:20 am
Jon can you please give us an update on Dynasty Gold “DYG”. I understand that they have well in excess of 1 million dollars. Stock is trading below cash value.
Comment by Jim — July 15, 2014 @ 8:48 am
You can throw Goldman Sachs in there as well, Greg…
Comment by Jon - BMR — July 15, 2014 @ 8:48 am
Hello!
I agree with all of you, gold and silver are manipulated big time, this is so sad, as the Venture follows and my stocks too, I am frustrated!!
Comment by Yvonne Kindström — July 15, 2014 @ 9:28 am
John
If you have a chance, it would be interesting to look at an updated chart of GBB. Thanks
Comment by bob — July 15, 2014 @ 9:39 am
And… HSBC…
Comment by Greg J. — July 15, 2014 @ 11:30 am
Amarc Res. AHR.V is slowing starting to show some life. No news releases in the last 6 months!! Anyone??
Comment by Greg J. — July 15, 2014 @ 2:05 pm
Hi Jim, I haven’t had a chance to track down Ivy Chong (Pres. and CEO) lately but they do seem to be in hibernation despite the $1 million in cash they have. Their property near Stewart is an exceptional exploration target (optioned from Richard Billingsley), and essentially drill-ready, but what they’re waiting for I don’t know (no news for a year?). Their board is strong, some big names there. I suspect they’re like a lot of companies at the moment—-their mindset is that the market is “bad”, and they just don’t want to do anything as a result. They’re behind the curve. Companies that are active and smart about it, and delivering results, are being rewarded. And when the market really starts to take off, like we believe it will shortly, companies that have been in hibernation are going to miss a huge opportunity.
Comment by Jon - BMR — July 15, 2014 @ 4:06 pm
Well put on ggi, ya, yellen hey,, ha, maybe dyg hasn’t gotten their permit yet, odd hey, applied over a year ago, don’t read if they got it or not.maybe I missed something.on ggi, they have way to much going on to panic on a few cent pullback,we should see them pop by the end of the month.sooner?
Comment by Tom — July 15, 2014 @ 5:42 pm
Tom, very normal minor retrace on GGI to support area (including 20-day SMA) which we’ll show in a chart tomorrow, and now oversold RSI(2) conditions to boot. All these minor retraces on GGI going back to last year have proven to be exceptional opportunities, and this time will be no different IMHO. Too many good things happening with Rodadero, La Patilla, the Grizzly—–they all add up to an explosive summer for GGI, and it makes sense that things should intensify over the last half of this month.
Comment by Jon - BMR — July 15, 2014 @ 5:55 pm