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Gold has traded between $1,201 and $1,214 so far today…as of 9:30 am Pacific, bullion is down $5 an ounce at $1,205…Silver is 4 cents higher at $17.12…Copper is up 2 pennies at $2.84…Crude Oil has added $1.69 a barrel to $60.67, partly due to fresh concerns regarding Iraq and recent gains made by ISIS…the Islamic State insurgency has yet to affect Iraq’s exports to world markets but the potential for a future disruption clearly exists…meanwhile, the U.S. Dollar Index has retreated one-quarter of a point to 95.29 on weaker than expected PMI and housing numbers this morning…

The minutes released yesterday of April’s FOMC meeting showed that many committee members felt it was unlikely economic data would support a June rate hike…there were no major surprises in the minutes as markets have almost completely ruled out a rate hike in June, pushing back expectations to September – at the earliest…this will likely cap any rallies by the greenback and prevent the U.S. Dollar Index from pushing through key resistance levels that have emerged since the March-April double top…this in turn will create a more positive environment for commodities and the Venture, which appears ready again to challenge resistance just above 700…

Geopolitical Fires

The Obama administration’s strategy to contain and degrade ISIS continues to suffer setbacks, and one has to wonder where this is all headed and how it could potentially impact a broad spectrum of markets at some future point, just as previous conflicts have…only days after capturing the key Iraqi city of Ramadi, ISIS now controls over half of Syrian territory after seizing the village and archaeological site of Palmyra yesterday…

Meanwhile, foreign militants fighting under the black flag of ISIS are conquering territory in northern Afghanistan, terrorizing residents and outmatching the Taliban’s brutality, according to reports from NBC which were backed up by comments last night by Lt. Col Anthony Shaffer, a former military intelligence officer and Fox News contributor who was interviewed by Bill O’Reilly…Shaffer said sources told him that ISIS has taken control of 5 northern provinces in Afghanistan and has also taken over the drug trade in the south…interestingly, he added that the fighters are going after mineral resources in northern Afghanistan, including Lithium…

Bush To Obama:  “Stop Insulting Our Neighbor To The North”

Twice during an appearance yesterday in Portsmouth, New Hampshire, presumed Republican Presidential candidate Jeb Bush suggested that the U.S. relationship with Canada is in need of serious repair…speaking broadly about the need to remake U.S. foreign policy once President Obama leaves office, Bush told a crowd of about 60 voters that he would seek to restore relations with allies around the globe.  “It means stop insulting our neighbor to the north. It’s hard to imagine how we could have a bad relationship with Canada, but under this administration we’ve managed to do it,” he said.

Crude Oil Update

Crude Oil is not going in the direction Goldman Sachs or others may want it to…the technical dynamics in this market really started to shift during the first half of April, as John pointed out through some short-term and long-term charts, and what seems increasingly certain is that an important double bottom formed in this market in mid-March…that’s good news for investors and companies who are still trying to recover from the shock of a quick 60% drop in prices from last year’s high…

Encouragingly, strong new support has been built in the mid-$50’s which now includes the rising 50-day moving average (SMA)…any consolidation from the sharp advance from mid-March may not break below $54…on the upside, WTIC will likely require time to overcome strong resistance in the mid-to-upper $60’s…

Despite the partial recovery in prices, a quarter of the jobs directly and indirectly tied to the Canadian Oil and gas space could be wiped out this year…as many as 185,000 jobs, or 25% of the 720,000 workers in Canada linked to the Oil patch – could be affected as the industry navigates through the downturn, according to a forecast published earlier this week…

B.C. Open For Business – Lessons For The New Alberta

British Columbia is sweetening its offering with iron-clad “cost certainty” assurances to the Petronas-led consortium in a final push to establish a liquefied natural gas project and set the stage for a “new era of economic activity” in the province, Premier Christy Clark said yesterday…Petronas and its Asian partners including Indian Oil Corp. and Japan Exploration are weeks away from making a final investment decision on an LNG project on the West Coast…yesterday, the B.C. government and Petronas signed an agreement towards a $36-billion LNG project near Prince Rupert…it’s worth noting that while the Alberta NDP has created a great deal of uncertainty in the Oil and gas sector in that province by promising a “royalty review”, the pro-business B.C. government is taking a much different approach – it has given Petronas assurances that its royalty rates will never change..

Euro Chart Update

The euro is performing according to script – it reacted at Fib. resistance at 115 as expected, but has very strong support around 110 which is just above the rising 50-day SMA…

What’s important about this 7-month daily chart is that it shows the trend is bullish after the formation of a double bottom in March and April – a mirror image of the current state of the U.S. Dollar Index…in the environment of a stronger euro and a weaker greenback, commodities and the Venture have a much better opportunity to gain traction…

A Bad Day For China’s Richest Man

How’s this for a sudden drop in one’s portfolio value – Li Hejun, who was China’s richest man until this week, saw his fortune fall by as much as $15 billion in half an hour yesterday when shares in solar panel firm Hanergy plummeted 47% in Hong Kong trading…nearly $20 million was wiped off the company’s market value before the stock was halted, pending news…investors, regulators and analysts have questioned Hanergy’s rapid share rise, and how the company was turning a profit, for months…they’ve used the company as an example of the risk of investing in emerging markets…

Today’s Equity Markets

Asia

China’s equity markets stood out amid mixed trading in the region overnight, as investors bet on further economic stimulus from Beijing after a preliminary reading of the country’s massive factory activity came in below expectations…the HSBC flash Purchasing Managers’ Index (PMI) came in at 49.1, indicating that the country’s manufacturing sector contracted for a 3rd straight month in May…the reading was weaker than the 49.3 print forecast by Reuters, but better than the 48.9 final showing in March…

The Shanghai gained 84 points or nearly 2% to close at 4530, its highest level in more than 3 weeks…

Europe

European markets eked out small gains today…fresh data today showed the region’s economy continued to lose momentum in May, with Markit’s composite flash PMI falling to 53.4 from 53.9 in April, below analysts’ expectations…

European economists at HSBC say that Greece should be able to negotiate a deal with its European creditors to unlock enough money for bailout funding, allowing the country to meet its June debt obligations to the International Monetary Fund…however, they also warn that this is just a short-term solution…

North America

The Dow is up 19 points as of 9:30 am Pacific…U.S. home resales unexpectedly fell in April as tight inventories pushed prices higher, giving a cautious signal on the strength of the housing market…meanwhile, the U.S. manufacturing sector continues to hold just above contraction levels, according to the latest flash PMI data…private research firm Markit said its May flash estimate PMI fell to a level of 53.8, compared to April’s final reading of 54.1…according to consensus reports, economists were expecting to see a reading at 54.6…

In Toronto, the TSX has jumped 134 points while the Venture has added 4 points to 699…

Integra Gold Corp. (ICG, TSX-V) Update

Integra Gold (ICG, TSX-V) rose 2 cents to 29.5 cents on its second-best volume day ever yesterday (8.8 million shares, all exchanges) following more positive drill results from its Lamaque South Gold Project in Val d’Or…volume like that goes a long way in terms of soaking up paper from more than 30 million flow-through shares placed last December…

From a technical perspective, overbought RSI(14) conditions from February have unwound with this indicator now turning higher after finding support at the 50% level…ICG’s bullish trend is very pronounced, so a breakout above the Fib. 61.8% resistance level as shown in this 2-year weekly chart seems highly probable…

ICG is up half a penny at 30 cents as of 9:30 am Pacific…

C02 Solutions Inc. (CST, TSX-V) Update

Below is an update of John’s 3-year weekly chart on CO2 Solutions Inc. (CST, TSX-V), as requested by some readers, which was originally posted May 11…CST is drawing considerable investor interest with its patented technology addressing carbon emissions, and this morning the stock hit a new multi-year high of 34 cents before backing off to 30.5 cents as of 9:30 am Pacific…it’s quite possible that Fib. resistance at 30 cents could turn into new support – it’ll be interesting to see how CST finishes the week…RSI(14) is certainly in overbought territory at 88% but this condition can sometimes persist for a while, simply due to the momentum factor…

The chart is an excellent example of what can happen with a stock when it breaks above a downtrend line…CST briefly fell below Fib. support at 8 cents in January but quickly re-established that support when it pushed above the downtrend line in February…this month it broke out of a trading channel, after releasing full pilot testing results April 29…the company describes its technology as a new economic benchmark for low-cost carbon capture…

Note:  John, Terry and Jon do not hold share positions in ICG or CST.