Gold, enjoying its best week in a month, has traded between $1,207 and $1,219 so far today…as of 8:30 am Pacific, bullion is up $8 an ounce at $1,217…Silver has added 7 cents to $16.45…Copper is flat at $2.79…Crude Oil is down $1.41 a barrel at $47.38 while the U.S. Dollar Index, quite volatile today, is currently off one-third of a point at 92.00 following a jobs report that was in line with expectations…
Gold prices are currently at their highest level relative to Oil since the late 1990′s as bullion retains some of its appeal despite the downward spiral in Crude amid rising supplies and lackluster demand…
The U.S. posted its strongest year of job growth in 15 years, according to Labor Department data this morning, and the unemployment rate fell to a post recession low last month, evidence of momentum for the labor market marred by softer wages and a rise in workforce dropouts…non-farm payrolls rose a seasonally adjusted 252,000 in December with broad-based gains across a wide array of sectors…however, the key metric of hourly wages fell from the month before, a sign that labor cost pressure isn’t present…disappointing wage and labor force participation growth are still problematic for the economy…
Executives at Vanguard Group, the No. 1 U.S. mutual fund company, said yesterday that deflation is a real risk to the global economy…
The arrival of freezing weather across much of the U.S. hasn’t revived the natural gas market…prices for natural gas, used to heat half of U.S. homes, hit a more-than 2-year low this week and are down 35% since mid-November, thanks to a supply glut…daily gas production has set a record for 11 straight months, according to consulting firm Bentek Energy…
Oil Update
A victory for Keystone this morning – Nebraska’s highest court has just tossed a lawsuit challenging the proposed route for the pipeline…1 less excuse for President Obama, but he’ll invent others…
While a final bottom for Crude may not come until it reaches the mid to upper $30‘s, there’s no question that the opportunity exists for a strong rally to break out at almost any time given the extent of unprecedented oversold conditions…John’s 19-year WTIC chart that we posted Tuesday showed how abnormal the current pattern is…the strength of the U.S. dollar has been adding to the pressure on the Oil market from oversupply and the Saudis’ goal of driving the price down to preserve and increase market share, put the squeeze on U.S. shale producers and weaken the Iranian regime (the Saudis, Kuwait, United Arab Emirates and Qatar are counting on combined reserve assets estimated by the IMF at $826 billion to withstand multi-year price lows)…
CNBC’s John Melloy pointed out in an article yesterday that at the end of the trading day Tuesday, an ETF tracking Brent Crude fell to 94% below its average price for the previous 200 days…that created a “once-in-a-lifetime chart” that spurred strategist Larry McDonald to urge his clients to go long Oil in order to bet on a snapback. “I’ve never seen any major asset class 90% below its 200-day moving average,” McDonald told CNBC.com late Wednesday. “That’s three standard deviations.”
One has to be careful playing the Oil market right now, however…as 1 analyst has pointed out, “I cannot recall a time when several members were actively pushing the price down in both word and deed.”
Alberta’s Slippery Slope
The Saudis were cunning when Oil was trading at $100 and above – they stashed away their money and have huge foreign exchange reserves to survive the current storm, even if it stretches out for a couple of years…Alberta, especially under recently departed premier Allison in Wonderland, wasn’t so wise…Jim Prentice, the province’s new premier, says Oil prices have plunged so far so fast that this year’s projected budget surplus of $1.5 billion will now be a $500 million deficit…a year ago, the province predicted that a barrel of WTIC would average $92 this fiscal year ending March 31…that was revised to almost $89 in November as prices fell…each $1 drop in the average price over the course of a year costs the province $215 million. “If Oil prices persist at sub-$50 per barrel, we essentially have no Oil revenue, and it opens up a revenue hole in Alberta’s finances that approaches $10 billion,” Prentice said.
CRB Index Updated Chart
The battered CRB Index, heavily weighted by Oil (23%), is now nearly 30% below last year’s high of 313.27…it’s difficult for the Venture to gain traction unless the CRB Index is at least stable or moving higher, so a CRB recovery out of current oversold conditions couldn’t come fast enough for the junior resource market…
Keep in mind, however, that the Venture‘s bottom during the financial crisis occurred in late 2008, a few months before the CRB Index found its low…the Venture also topped out at 2465 in 2011 just slightly ahead of the CRB, so the Venture’s tendency to lead commodities is a pattern to be cognizant of in the weeks and months ahead…
The CRB is down slightly as of 8:30 am Pacific, just above 224 and this week’s multi-year low of 223.86…
A support band exists between 200 and 220, and at this point it’s hard to imagine that the Index won’t attempt to vigorously test that support and the early 2009 low of 200.16…
Today’s Equity Markets
Asia
Asian markets were relatively quiet in choppy trading overnight…China’s consumer inflation was reported up 2% for the year 2014, which is well below the government’s inflation target of 3.5%…
Europe
European markets were down significantly today, pulled down in part by the weakness on Wall Street…the euro has suffered its biggest weekly slide since 2013 as reports from around Europe added to evidence of a deepening slump that may prompt more financial stimulus measures…
Industrial output in Germany, adjusted for seasonal swings, fell 0.1% in November from October, when it climbed a revised 0.6%, the Economy Ministry in Berlin said today…analysts in a Bloomberg News survey predicted an increase of 0.3%…in France, the decline was 0.3% compared with a forecast in a separate survey of a 0.3% gain…
North America
The Dow has retreated 198 points as of 8:30 am Pacific…the Dow gained 536 points the previous 2 days following its worst start to a year since 2008…many are afraid of missing out on potential gains as the Index continues to trend higher…interestingly, according to Morningstar Inc., during 2014 only about 13% of actively managed, large-company stock funds beat the 13.7% return posted by the S&P 500 including dividends…hedge funds have struggled, as well…the HFRI Equity Hedge Index, which tracks the performance of hedge funds investing in stocks, posted returns of 2.3% during the year, their worst relative performance since 2011…
The TSX is off 118 points through the first 2 hours of trading while the Venture is down 3 points at 684…
Fairmont Resources Inc. (FMR, TSX-V) Update
Yesterday, we provided an initial overview of some fundamental drivers behind Fairmont Resources (FMR, TSX-V) which significantly out-performed the Venture during 2014 by doubling in value…given the fact Fairmont has just received its certificate of authorization for extraction at its Buttercup Property near Chicoutimi, Quebec, and has other plans in the works in the industrial minerals space in that province, we can’t help but be bullish on this company’s prospects for 2015…the possibility of near-term production and cash flow for a deal with only 17.5 million shares outstanding is attractive to say the least…Fairmont is also the kind of company that will benefit from lower fuel prices…
This morning, John gives us a look at FMR from a technical perspective with a 3-year weekly chart…
The decline from last year’s 30-cent high was a very normal retracement to the rising 300-day moving average (SMA) at 15 cents which is also a Fib. support level…astute traders and investors will accumulate on that kind of healthy retracement for the next wave up…
What’s interesting as 2015 begins – why we’re so excited about FMR from just a technical standpoint – are the bullish confirmations in the RSI(14), Slow Stochastics and ADX indicators…it’s not often in this market that you see that kind of a “triple play” in technical indicators, but that’s the situation with FMR which closed up half a penny yesterday at 19.5 cents…
Gold Bullion Development Corp. (GBB, TSX-V) Update
Gold Bullion Development’s (GBB, TSX-V) final permit for production at the Granada Gold Property near Rouyn-Noranda is expected in the near future…not surprisingly, the process has taken longer than expected which is why we didn’t start alerting our readers to GBB again until just very recently…
We find the current dynamics with GBB more compelling than they have been at any point since late 2009…with a multi-million ounce resource identified through drilling of just a small portion of the LONG Bars Zone, with Oil prices and the Canadian dollar now both well below the estimates in the Pre-Feasibility Study for Granada, and Gold trading above $1,400 CDN, the economics of GBB’s high-grade “rolling start” are robust…
In addition, the fact that GBB will now be able to include data available from 481 historical drill holes into the next mineral resource update is also highly significant (there are nice near-surface grades in some of those holes including 10.55 g/t over 3.66 m in 93–185 and 6.65 g/t over 9.11 m in 92-67)…the historical data will be added to the 88,467 m in 424 holes and wedges the company drilled from 2009 to 2012…
Below is an updated 3-year weekly GBB chart…yesterday’s high volume day was another sign of growing accumulation as GBB attempts to break out above the 5-cent level…for the first time since late last June, when a significant rally started and carried on for the next 2 months, GBB has pushed above its 100-day SMA and appears to be gaining comfort above that level…
Focus Graphite (FMS, TSX-V) Update
On December 16 we alerted bottom fishers to Focus Graphite (FMS, TSX-V) which had been showing strong support in the mid-30‘s since October, and in mid-December RSI(14) fell into the low range and near support on John’s 1-year weekly chart…since then, FMS surged more than 40% to a high this week of 53 cents…as of 8:30 am Pacific, it’s unchanged at 50 cents…
Focus, which recently completed and filed an environmental and social impact assessment (ESIA) for its Lac Knife Graphite Project in northeastern Quebec, has made powerful moves beginning in the last half of December in each of the past 5 years…it’s also worth noting that Focus has the attention of Dundee whose analysts recently wrote, “Focus is the most advanced Canadian graphite developer” with a “place among top tier assets when it comes to grade, flake distribution, recovery and purity.”
John’s updated 1-year weekly FMS chart shows an unconfirmed breakout above Fib. resistance at 49 cents, in addition to the breakout in December above a downtrend line in place for the past few months…
Note: John, Terry and Jon hold share positions in GBB.
any hint of news from ggi?
Comment by BRIAN — January 9, 2015 @ 8:59 am
Great TA on Fairmont (V.FMR)- very professional and the chart looks poised for a breakout with increased volume. 🙂
Comment by Tommer3 — January 9, 2015 @ 9:25 am
any opinion or chart comment for gold canyon resources GCU? huge volumes lately.
thanks
Comment by M. — January 9, 2015 @ 11:09 am
looks like pinetree is done selling gcu. looking good for a trade here. i’m in.
Comment by kc — January 9, 2015 @ 12:08 pm
Looks like support at 10c for GCU. There is speculation that someone is building a position in the company. The selling is said to be by Pinetree in similar fashion (distressed selling) to what they have done with a couple of other companies (Integra being one). I own a few shares in GCU and it seems a cheap price at 10c, but I don’t see much happening quickly with the company and the grade of the deposit is on the low side. However, with 5m ozs deposit, if the POG was to move up a bit, the SP should do well.
Comment by Tom UK — January 9, 2015 @ 12:21 pm
e-mailed Steve from the start of January but no reply. Even called him and left a message. U guys maybe have an update, concerned!!!
Comment by Bob — January 9, 2015 @ 12:27 pm
Not the least concerned, Bob. I’ve always found Steve to be good at returning calls so I’m sure you’ll hear from him. My understanding is, they’re extremely busy with developments at Rodadero and elsewhere, and corporate developments, and that’s actually a good thing because most companies aren’t very busy these days. I suspect we’ll hear from GGI fairly soon and every time they’ve updated shareholders, the news has been good. I wouldn’t bet on that changing.
Comment by Jon - BMR — January 9, 2015 @ 12:43 pm
Absolutely Jon. I suspect we will hear something on Rodadero very soon. I had a reply from Steve and they like what they are seeing at Rodadero. They are doing everything they can to add value for their shareholders. Stay tuned!
Comment by Dan — January 9, 2015 @ 1:17 pm
Home Links Editorials
Taking a Run at Gold Canyon
Bob Moriarty
Archives
Jan 9, 2015
In the six weeks since the start of December 2014, Gold Canyon Resources has traded 50 million shares in a company with only 147 million shares outstanding. While insiders holding more than 10% of the shares are supposed to report their trades within three days by the rules of the exchange, the rules are mostly ignored. We know that Pinetree Capital (PNP-T) and Sheldon Inwentash owned about 20 million shares. He reported selling some shares in early January. I personally think he’s sold them all but that’s just an opinion.
I also happen to know that Sprott owned about 17-18 million shares. For some reason they don’t report their insider transactions but that’s not unknown.
I did some research and found that since December 1st, 2014 to now, of the 50 million shares sold, Anonymous represented just under 68% of the sales but only 10% of the buying volume. TD Sec did only 13% of the sales but 31% of the purchases.
I think both Sprott and Pinetree were selling under Anonymous to keep their actions under the radarscope of investors. Perhaps investors are missing the 1800-pound gorilla sitting on the sofa. GCU began the month selling for $.21 and with over 1/3 of the total float being dumped on the market; the price only dropped 55% at the worst when GCU hit $.09 on December 19th.
The big question isn’t who sold; we have a pretty good idea of that from knowing who owned big blocks. The important issue is just who managed to absorb tens of millions of shares in an illiquid market? And a hint comes from the big buyer of over 31% of the total shares traded, TD Sec.
Someone is taking a run at Gold Canyon. I have no idea if they will report the insider sales when they go over 10% or not but someone bought over 15 million shares through TD Sec.
To get an idea of what Gold Canyon would be worth in a buyout, we know that the market is valuing gold in the ground at $12 to $15 an ounce. If you go to the 43-101 released in November of 2012, GCU used a figure of $1400 for gold and $15 for silver. The numbers were based on an 80% recovery for gold and 60% for silver. The open pit resources were just over 5 million ounces of gold and 25 million ounces of silver. Therefore, in a buyout, management would be remiss if they accepted below $60 million. $75-$80 million would be a more reasonable offer.
At $.10 a share, you are paying $3 an ounce for gold and you get 25 million ounces of silver for free. I don’t expect that to last for long. One day soon the wholesale dumping will cease. The buying will not.
Even the majors have begun to realize gold still has a future and are starting to nibble at projects in safe jurisdictions. Gold Canyon is low grade at just about 1 g/t gold but in the safest jurisdiction in the world. That’s worth something. If a bidding war starts on this nice size deposit, the price could go a lot higher.
Shares are still being dumped but more important, they are still being snapped up just as fast.
Gold Canyon is not an advertiser. I have bought shares in the open market. I’m not daft. Do your own due diligence.
Gold Canyon Resources
GCU-V $.105 (Jan 08, 2015)
GDCRF-OTCBB 70.6 million shares
Gold Canyon website
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Bob Moriarty
President: 321gold
Archives
321gold Ltd
Comment by kc — January 9, 2015 @ 1:19 pm