Gold has traded between $1,185 and $1,207 so far today…as of 8:45 am Pacific, bullion is down $18 an ounce at $1,188…Silver has retreated 34 cents to $16.73…Copper is off 2 pennies to $2.77…Crude Oil has slipped $1.47 a barrel to $58.25 while the U.S. Dollar Index has gained two-thirds of a point to 97.15 but is now up against stiff resistance (see updated chart this morning)…
The International Monetary Fund (IMF) has said the Chinese yuan is no longer considered undervalued…a senior IMF official told reporters that China is now welcome to apply for its currency to be included in Special Drawing Rights (SDR), which is the IMF’s basket of special reserve assets…the SDR currently comprises the U.S. dollar, the euro, the Japanese yen and the British pound…this may have positive longer-term implications for the Gold market as it represents an on-going move by China to gain a larger share of economic and political power, which could ultimately have negative ramifications for the greenback…
Gold To Play A Role In Funding Of China’s “Silk Road” Initiative
China has established a fund that is expected to raise about $16 billion for Gold-related investment as part of its āSilk Roadā initiative to develop trade and transport infrastructure across Asia and beyond, official media reported over the weekend…the fund, which will be run by a new company to be set up by Gold producers and financial institutions, is expected to raise an estimated 100 billion yuan ($16.13 billion) in three phases, according to Shanghai Securities News…
Two leading Gold producers, Shandong Gold Group, the parent of Shandong Gold Mining Co Ltd, and Shaanxi Gold Group will take stakes of 35% and 25% percent respectively, with the rest owned by financial institutions, the newspaper said.
The fundās activities could take in the launch of Gold-backed ETFs and buying stakes in listed Gold companies and mining firms…
President Xi Jinping said earlier this year he hoped annual trade with the countries involved in Beijingās plan to create a modern Silk Road would surpass $2.5 trillion in a decade…
U.S. Dollar Index Updated Chart
The U.S. Dollar Index has been rallying since the beginning of last week, but it does face strong resistance at and just slightly above 97…this is where the declining 50-day moving average (SMA), the neckline and the uptrend line all essentially intersect on this 9-month daily chart, so that’s a key area to watch…the Dollar Index broke down below the 97 level and then the uptrend line near the end of April, leading to a test of Fib. support near 93…
If the Dollar Index successfully busts through the 97 resistance and charges toward 100 again, this is only going to put additional pressure on the U.S. economy which in turn will lessen the odds of a Fed rate hike this year…
The greenback hit its highest level in nearly 8 years against the yen today as investors coming back from a 3-day weekend in Europe and sold currencies heavily against the greenback…the buck also surged to a 1-month high against the euro, as concerns about Greeceās ability to make upcoming payments to creditors dragged down the common currency…
Today’s Equity Markets
Asia
China’s Shanghai Composite rose 8% last week, more than 3% yesterday, and another 2% overnight to close just 90 points shy of resistance at 5000 (see yesterday’s chart)…that’s a 13% jump in the Index in just 7 trading sessions…
Europe
European markets were down significantly today…Greece needs urgent aid to repay a loan due next week to the IMF and to pay wages and pensions, its government said yesterday…
North America
After yesterday’s Memorial Day holiday, U.S. markets are under pressure this morning but now stabilizing…the Dow is off its lows but still down 171 points as of 8:45 am Pacific…
U.S. consumer confidence rose this month, reversing some of the weakness seen in April, according to the latest data from the U.S. Conference Board…
The U.S. Conference Board reported this morning that its monthly Consumer Confidence Index rose to 95.4, up slightly from Aprilās revised reading of 95.3.Ā “While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short-term outlook,ā said Lynn Franco, director of economic indicators at The Conference Board…
Meanwhile, the U.S. manufacturing industry weakened in April, according to the latest data from the Department of Commerce…new orders for long-lasting manufactured goods, including the volatile transportation sector, fell by $1.2 billion, or 0.5%, to $235.5 billion last month (slightly below expectations) following March’s revised increase of 5.1%…
In Toronto, the TSX has surrendered 131 points while the Venture is off 6 points at 694 as of 8:45 am Pacific…
Venture 3-Year Weekly Chart
The Venture’s RSI(14) continues to follow an uptrend line that’s expected to provide continued strong support on this 3-year weekly chart…resistance, of course, remains at 707, and the rising 50-day SMA in the low 690’s (not shown on this chart) has helped underpin the Index since the beginning of April…
In other words, no reason to panic over this morning’s minor pullback which is in sympathy with the broader equity and commodity markets…the Venture is holding up very well…
NexGen Energy Ltd. (NXE, TSX-V) Update
NexGen Energy Ltd. (NXE, TSX-V) has completed its previously announced bought-deal short-form prospectus offering, raising aggregate gross proceeds of $23.74-million at a price of 50 cents per share…the company will use the proceeds for continued exploration at its promising Rook 1 Uranium Project in the Athabasca basin in Saskatchewan, and for working capital and other corporate purposes…
NXE is off a penny at 50 cents as of 8:45 am Pacific…
Macro Enterprises Inc. (MCR, TSX-V) Update
Macro Enterprises Inc. (MCR, TSX-V) has reported its 15th consecutive profitable quarter with net income of $1.4 million or 5 cents per share for the first 3 months of 2015…this was despite a 66% drop in revenue from 2014‘s record 1st quarter, which demonstrates how activity has slowed down in the Oil and gas industry – particularly in Alberta where there is also now the added uncertainty of an NDP government…as part of its overall strategy, MCR is seeking out pipeline and facilities construction contracts in connection with the LNG projects being planned in British Columbia, an industry that is anticipated to bring substantial economic activity to the province over the next 30 years…Macro has completed bid processes and has entered into discussions with LNG project owners regarding future pipeline and facilities construction…
MCR is off 18 cents at $2.57 as of 8:45 am Pacific…
Integra Gold Corp. (ICG, TSX-V) Update
Integra Gold (ICG, TSX-V) continues to look very strong, fundamentally and technically, and what we’re looking for today is confirmation of a breakout above the Fib. 30 cent resistance level…buy pressure as shown by the CMF remains strong…
ICG is off a penny at 30.5 cents as of 8:45 am Pacific…
Richmont Mines Inc. (RIC, TSX) Update
Richmont Mines (RIC, TSX) remains our favorite company among smaller Gold producers as it boasts a strong cash position, profitable operations, virtually no debt and exceptional growth potential with expansion of its high-grade Island Gold Mine in northern Ontario…
Technically, the possibility we’re watching for here is a breakout above a downsloping flag (the top of which is currently at $4) as you can see on this long-term weekly chart…
RIC has fallen 12 cents to $3.85 as of 8:45 am Pacific…
Mezzi Holdings Inc. (MZI, TSX-V) Update
Mezzi Holdings (MZI, TSX-V) climbed as high as 26 cents in early trading today but it still grappling with Fib. resistance at 24 cents…the overall pattern remains very bullish, especially following the breakout above the downsloping flag earlier this month, but patience is key…
MZI is down 2 pennies at 22.5 cents as of 8:45 am Pacific…
Note:Ā John, Terry and Jon do not hold positions in NXE, MCR, ICG, RIC or MZI.
GBB have released their updated Resource Estimate. It is now 3.2 mil oz with a cut-off grade of 0.3g/t. Given that they had a RE of 2.6mil oz with a cut-off grade of 0.4g/t in their 2013 PEA, is this increase enough to help the SP. Is it significant enough to whet the appetite of a predator?
Comment by Tom UK — May 26, 2015 @ 1:31 pm
seems like the US$ has brought gold and oil back down……hoping it tops here just above 97 and can go back to reality!
Comment by STEVEN1 — May 27, 2015 @ 6:17 am
Steven, the dollar gave some people a scare in April when it attempted to go to a new high, but John’s charts showed a strong RSI(14) divergence with price which indicated that move would fail, and it did…the bounce from 93 up to 97 and a little above this week is not surprising as the Index is testing resistance at the uptrend line and the 50-day SMA…Friday’s close will be critical…we’re seeing some backing off this morning after the overnight high…the ironic thing is, another major surge in the U.S. Dollar (by speculators) on the premise that interest rates are going higher sometime soon only lessens the chance of a rate hike because the higher dollar is negatively impacting the U.S. economy and runs counter to the Fed’s efforts of trying to ramp up inflation…
Comment by Jon - BMR — May 27, 2015 @ 6:29 am
Well I hope everyone is not sitting there hoping the mining market is coming back soon cause it aint even near. I mentioned to watch MZI a couple weeks ago, I mentioned YFI, and others. There are a couple that are near for take off. I’m not advocating to sell out of your mining shares as this site believes in them. But any change laying around the house and you could have made yourself a few bucks in the last month.
Comment by dave — May 27, 2015 @ 11:43 am