Gold has traded between $1,180 and $1,194 so far today…as of 9:15 am Pacific, bullion is up $13 an ounce at $1,191…Silver has jumped 47 cents to $16.57…Copper is off slightly at $2.88…Crude Oil hit a new yearly high this morning but has now backed off 41 cents to $58.74…the U.S. Dollar Index, meanwhile, is up one-fifth of a point to 95.46 after hitting a 3.5-month low last week…
Gold has certainly started this first full trading week of May on a positive note…whether that translates to bullion snapping a 4-week losing skid will likely be determined by this Friday’s U.S. jobs report (the March report was miserable, and the Fed will run out of weather excuses if April’s isn’t much better)…
According to currency analysts at BNP Paribas, the Dollar Index may have put in a near-term bottom last Friday…looking ahead, their view is that the greenback could find more strength by the end of the week with a better-than-expected employment report. “Our economists expect a solid rebound in April non-farm payroll employment, to 275,000. They also expect hourly earnings to pick up to 2.3% year-over-year, which would be another indication that the Fed may not be able to hold back from rate rises for very long,” they stated. “We think strong data will create a more fundamental driver for the rise in U.S. yields, which would bolster the U.S. Dollar.”
We’ll examine the greenback in more detail over the coming days…a bounce higher during this week is reasonable but there’s plenty of technical evidence to suggest that the Dollar Index is in the midst of what could be an extended and much-needed consolidation, and may have hit its high for the year in March after a remarkable surge from last summer…Dollar bulls are counting on a strong jobs report Friday – they will be running for the hills if that number disappoints…
TSX Gold Index 6-Month Daily Chart
Gold stocks are looking good which leads us to believe the U.S. Dollar will be restrained over the short to medium-term…
The TSX Gold Index finally pushed above Fib. resistance in the mid-160’s last week, and the Index is also now above its 50-day SMA (165) which is beginning to flatten out…a rising 100-day SMA in the upper 160’s is a positive sign…
What to watch for here is whether the Gold Index can hold support in the mid-160’s…the trend over the last several weeks has certainly been encouraging…the Index formed a double bottom late last year with higher lows following the healthy retrace to strong chart support at 150 in early March…
The Gold Index is flat at 168 as of 9:15 am Pacific…
TSX Gold Index Relative To Gold
This chart that goes back to the 2011 all-time high in Gold and the TSX Gold Index is quite revealing…notice how the Gold Index broke above a long-term downtrend line relative to the metal early last year, followed by a plunge during the October-November panic that has led to the development (right shoulder now evolving?) of what appears to be a classic inverted head and shoulders bottom…
A bullish “W” has also formed in the RSI(14)…quite simply, one can conclude from this that Gold stocks have indeed bottomed which suggests that Gold itself has either found its low or is very close to doing so…
Agnico-Eagle Mines Ltd. (AEM, TSX) Update
The overall strength of this Agnico-Eagle Mines (AEM, TSX-V) chart is additional evidence that the bear market in Gold stocks is over after more than 70% in value was wiped off the TSX Gold Index between late 2011 and early last November when the Index hit it lowest level (129) since 2001…
AEM successfully retested its 2013 low late last year, and is now attempting a breakout above Fib. resistance at $38…the general public doesn’t love Gold stocks right now but they should based on the message delivered through this chart…
Crude Oil Update – WTIC’s Wall Of Resistance
Crude Oil enjoyed a strong April, as John’s charts suggested it would, but WTIC now faces a powerful band of resistance between $60 and $65 a barrel…this resistance won’t be overcome easily, and it’s also reasonable to expect WTIC to soon consolidate its recent gains…support levels are $57 and $54…it would be surprising if the $54 level isn’t tested…there has been immense volatility in this market – expect that volatility to continue…
Today’s Equity Markets
Asia
China’s Shanghai Composite gained 40 points overnight to close at 4482…less-than-stellar economic data out of China continues to fuel bets that Beijing will unveil further support measures, and that’s obviously market-bullish…
The HSBC final PMI showed China’s vast factory sector stalling in contraction for April, with a reading of 48.9, marking its fastest drop in a year…China’s official PMI for April topped expectations, coming in at 50.1 last Friday, while HSBC’s preliminary reading, released April 22, fell to 49.2…
A holiday in Japan today – the Nikkei was closed…
Europe
European markets finished moderately higher today, although the U.K. exchange was closed due to a public holiday…
North America
The Dow is up 74 points as of 9:15 am Pacific…in Toronto, the TSX has added 30 points while the Venture is 1 point higher at 700…
VANC Pharmaceuticals Inc. (NPH, TSX-V) Update
VANC Pharmaceuticals (NPH, TSX-V), in a hot sector at the moment, came out with news this morning after being halted the entire day Friday…the company announced that it has received drug identification numbers (DINs) from Health Canada for 5 new generic molecules as an initial notice of consent for new drug submissions…these 5 molecules will comprise 14 dosage forms across various therapeutic categories, including both chronic (long-term) therapy and acute (short-term) therapy…
VANC says it will commence manufacturing of these products once Notice of Compliance (NOC) is received from Health Canada, which is anticipated in the next few weeks…the NOC from Health Canada provides the authorization for VANC to market and sell the generic molecules in Canada…
Technically, as we noted last month, NPH started looking stronger after breaking out above a short-term downtrend line with strong support at the rising 50-day SMA…the CMF shows increasing buy pressure…important Fib. resistance at 55 cents…the overall trend remains encouraging…
NPH has gained 6 cents to 55 cents as of 9:15 am Pacific…it opened at 54 cents and climbed as high as 61 cents…
Silver Update
Back in 2008, the Gold-Silver ratio spiked to just above 80, meaning that you needed more than 80 ounces of Silver for each ounce of Gold…in 2011, however, that ratio dropped to near 30 as Silver out-dazzled Gold and zoomed to $50 an ounce…the ratio has since climbed steadily higher, reaching the mid-70’s and now it’s beginning to trend lower at 73…
One of 2 things will likely happen over the next year – 1) either Gold and Silver will take off again to the upside with Silver outperforming, thereby lowering the Gold-Silver ratio; or 2) the Gold-Silver ratio will narrow as Gold falls more than Silver does…the point is that this ratio is historically out of whack and this needs to correct…the average ratio level over the last 20 years has been 60, though longer-term averages in the Gold-Silver ratio are much lower…
Silver Long-Term Chart
An explosive push higher – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that appears to be in the works here…
It seems quite possible that the bottom of “Wave 4” came late last year when Silver briefly plunged to just above $14 an ounce…RSI(14) has managed to hold support which goes back to 2001…
Sell pressure continues to remain strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which could continue for a while yet, should therefore be viewed in a larger context as a bullish contrarian indicator…
Silver Short-Term Chart
Silver found strong support in the mid-$15.50’s, as expected, and the current RSI(14) trend is favorable…
You can see in the chart below how Silver gained momentum in late November after it pushed above a downtrend line…we’re now at another important point as Silver has pushed up against a downtrend line that formed after the late January high of $18.50…once the metal overcomes this resistance (the overall pattern suggests it will, the only question is when), then it should be ready to challenge the first Fib. level you see which is just below $18…
Note: John, Terry and Jon do not hold share positions in NPH.
Just got online today. I am watching TTM – I have not taken a position yet. This has a very good story to it and I know of a fund that bought in back in November. The volume last Thursday and Friday involved Salman and Altacorp. 2 investment banking fund companies. Their last news release possibly points to Johnson and Johnson. whenever I see heavy accumulation of fund buying, it makes me wonder. The first 2 levels of resistance are .19 and then .28 – so if she closes above .19 today, she can move to .28 before meeting a little head wind. I may wait till tomorrow to enter just to see if .19 becomes support.
Comment by dave — May 4, 2015 @ 9:33 am
Jon I don’t know what to think of GBB anymore. Another month has come and gone without the permissions to begin mining their deposit. I really don’t understand why there isn’t a new resource estimate or concrete plan being presented to shareholders. Instead we are left up in the air with respect to a number items that have been dangled to us through news releases. Just nothing concrete and nothing finalized. Any thoughts on another site visit or follow up with Frank?
Comment by Ted — May 4, 2015 @ 9:41 am
NPH – just wanted to comment here on the action today. Some feel that the current chart had the news already priced in to it, this being due to the market already expecting this news forthcoming. The market is also expecting 49 generic drugs coming to market as NPH has advised. What the market and WE do not know at this time is how many pharmacies and with what chains. This will also determine a revenue base to the market and investing funds out there. Today’s action looks to be whats called a throwback to the inverted head and shoulders pattern that has formed. Everything I wrote so far means in summary, don’t worry. NPH next level to $1.44 will be arriving by the end of Q2 or thereabouts.
Comment by dave — May 4, 2015 @ 9:54 am
Loaded with ggi at 11.5 today and friday
Comment by Martin — May 4, 2015 @ 10:29 am
Jon, excellent response to my concerns on GGI. It was very helpful. Thanks.
Comment by Dan — May 4, 2015 @ 12:31 pm
You’re welcome, Dan. Right this moment, the puck is on a Doubleview stick and they’re inside the blue line. Let’s see if #23 can score a beauty and get the fans going wild.
Comment by Jon - BMR — May 4, 2015 @ 1:45 pm
DBV PP close !
Comment by Guy Delisle — May 4, 2015 @ 2:42 pm
DBV now cashed up (PP closed) and aggressive drilling to start any day now! H23 any day now as well! DBV should get the Sheslay Valley some attention soon so those only playing the cheaper area plays with nothing happening soon (ie no drilling) there is still hope to see a little movement. You can play the leader(s) of the region or the cheaper alternatives which may profit from the success of others near them. Keep in mind, the most money will be made off the leader(s) that make a discovery and not the area plays trying to capitalize off the success of others.
Comment by D4 — May 5, 2015 @ 3:28 am
Jon, not if your in Calgary – lol
Comment by dave — May 5, 2015 @ 4:07 am
With the PP and the warrant(expires on May17) DBV has probably more than 1 million for drilling !
Comment by Guy Delisle — May 5, 2015 @ 4:39 am
They’re in good shape, Guy. All DBV needs is one nice step-out hole from 23, which I believe they’ll be able to deliver, and it’s off to the races.
Comment by Jon - BMR — May 5, 2015 @ 4:48 am
DBV- good volume at open. Looks like people were waiting for them to be cashed up before buying.
Comment by d4 — May 5, 2015 @ 5:42 am
DBV – expect volume to be high today as I have a good friend that is selling a stock to buy another big chuck of DBV…..it will be evident when it happens.
Comment by d4 — May 5, 2015 @ 5:47 am
D4 – I will have to agree, DBV should be the one to achieve the most in share price appreciation over the next months as they are now going to add new drill cores before others in the area start drilling. Let’s not forget the team lead by Dr. Razique are playing and active part in the drill program . I’m wondering where they drill next , re-enter H23 or step out a bit or move to the area where H5 was drilled . In any case I believe they will be drilling much deeper and now that they are cashed up ther should be nothing holding them back. Every hole they drill adds to their tonnage and the potential at the Hat is enormous.
Comment by Les — May 5, 2015 @ 5:58 am
GGI – I am watching it closely. I would like to agree with Jon on how quickly she can rebound. My concern though is: The accu/dist was in a heavy upswing from April 27 to May 1st. Now it is falling again. The volume picking up and one of the houses dumping the other day. With the summer doldrums coming up, it is possible she breaks below .10 – I would not be surprised if this were to happen. But like Jon said, it creates good buying where ever she lands at the bottom.
Comment by dave — May 5, 2015 @ 7:17 am
The socialist hordes have crashed the gates in Alberta with a majority. Free enterprise vote splits in favor of the NDP: 54 NDP, 16 WRP, 15 PC…approx. 40 minutes into count, so the story is already written. Jim Prentice goes from Premier to not even Leader of the Opposition. Political career over for him while it’s also game over for the PC dynasty. A nightmare coming for Alberta – this fling with the NDP will ultimately lead to a very ugly divorce. Ralph Klein must be rolling over in his grave.
This will have investment implications. B.C., Saskatchewan stand to win big – flight of capital (human and financial) will go in the direction of business and mining friendly neighboring provinces over the next few years, the opposite of what occurred before under NDP regimes in B.C. and SK.
Comment by Jon - BMR — May 5, 2015 @ 6:34 pm
The rot and corruption in Alberta that has been going on for forty years needed to end.
The change was long overdue.
Comment by Les — May 5, 2015 @ 7:40 pm
There’s no question, Les, that the PC’s deserved to get the boot for a variety of reasons; however, the bottom line is that the NDP policy platform is a jobs and investment killer. Capital moves very quickly when it doesn’t feel welcome. B.C. saw that very vividly under the NDP in the late 1990’s – people and money moved massively to Alberta. It was so bad, the NDP was wiped out and has been out of power for the last 15 years in B.C. Royalty “review” promised in Alberta, corporate taxes getting hiked 20%, minimum wage to $15, etc., etc……these are job and investment killing policies, and they will be implemented by a bunch of amateurs, many of whom are hard-core socialists. Brad Wall and Christy Clark are smiling tonight – they will put out the welcome mat and grab all they can from Alberta. That’s how it’s going to go. We’ve seen this movie before. The right will unite in Alberta but for the next 4 years, it ain’t going to be pretty.
Comment by Jon - BMR — May 5, 2015 @ 7:56 pm
I’ll have to strongly agree with Jon on this one, us here in bc will benifit.
Comment by Tombc — May 5, 2015 @ 10:32 pm
Tom, it’ll be boom times for B.C., and other provinces will benefit as well…just in my small community of 15,000 or so on the coast of B.C., there were literally hundreds of individuals who left for Alberta in the late 1990’s for work…the “brain drain” was sad to see, not to mention the capital outflows…a combination of bad economic policies in B.C. and job-producing, capital-drawing policies in Alberta…in fact, Alberta was actively promoting the “Alberta Advantage” – come to our province, they said, where taxes are low, where businesses are welcome, etc…..a majority NDP got elected in Alberta last night more by accident than anything else, it was not an election based on ideology…unfortunately, politicians, especially with a first taste of power, often over-reach…..the NDP would be smart to try to govern from the centre but they won’t…..they will attempt and probably succeed in implementing much of their policy platform which is scary….they got a free ride from the media during the campaign….Rachel Notley is indeed very charismatic…but behind that smile is a policy agenda that will kill jobs and investment in Alberta just like it did in B.C. and elsewhere, and the team behind her is weak, a lot of “paper” candidates who had no idea they would up in office…as investors, we can take advantage of this by understanding the opportunities that will be created over the next couple of years in B.C. and SK in particular because vs. Alberta they have just gained a huge leg up…Christy Clark and Brad Wall are smart enough to know that, and they will exploit that in every possible way…wave goodbye to the Alberta Advantage, it’s over. And just wait until the Americans wake up and realize what’s happened in Alberta.
Comment by Jon - BMR — May 6, 2015 @ 4:12 am
Well, I am an American but I don’t follow or understand politics. So I don’t have a clue what all that is about. Does each province in Canada have its own Premier?
Comment by dave — May 6, 2015 @ 4:36 am
Each province, Dave, has its own Premier and is governed by a political party…Alberta, the bastion of free enterprise in Canada over the last 44 years, is now ruled by socialists. It has happened provincially elsewhere in Canada at times throughout history, and the outcomes weren’t pleasant.
Comment by Jon - BMR — May 6, 2015 @ 5:15 am