Gold has traded between $1,185 and $1,197 so far today…as of 8:00 am Pacific, bullion is up $5 an ounce at $1,194…Silver is up 4 cents at $16.74…Copper has added a penny to $2.74…Crude Oil is 77 cents higher at $60.97 while the U.S. Dollar Index has tumbled more than a full point to 96.11 – supportive for the Venture…
The next couple of weeks are packed with events that could significantly impact the Gold market as well as equities…ECB, OPEC and G-7 meetings are taking place in the coming days while the Fed of course meets June 16-17…Greece has a payment due to the IMF on Friday, and that’s also when the U.S. employment report for May will be released…225,000 non-farm payrolls are expected, barely higher than the 223,000 in April…while there was some encouraging U.S. economic data yesterday, the big data picture still doesn’t illustrate the robust growth that would encourage the Fed to initiate a rate hike until probably the end of this year (December) at the earliest…
Oil Update
A weaker dollar and upbeat comments by Saudi Arabia’s Oil minister have given a boost to Oil prices today ahead of OPEC’s Friday meeting…the market consensus is that the Oil cartel will maintain its official production ceiling at 30 million barrels a day (they’re actually exceeding that slightly) as producers like Saudi Arabia continue their strategy of defending their market share…that strategy is working, Saudi Oil minister Ali al-Naimi said yesterday as he arrived in Vienna…Naimi, a key figure in the global Oil market, said that Oil demand is picking up and supply is slowing down, but Naimi also acknowledged that there is still a problem of an Oil surplus…
Later today, the American Petroleum Institute will publish its U.S. oil inventory report and market participants expect another decline…the U.S. Energy Information Administration will follow with its official estimate of Crude inventories and production tomorrow…
Gold vs. U.S. Dollar, Loonie & Euro
Below is a chart going back to the beginning of 2014, showing how Gold has held up quite well against the U.S. dollar despite the greenback’s surge since last summer…overall, bullion is down nearly 4% vs. the greenback over the last 17 months…
Against the euro, Gold has jumped 19% since the beginning of 2014 while the metal has gained 12% vs. the Canadian dollar…
Copper Long-Term Chart Update
Copper remains firmly within its long-term uptrend support which goes back to 2002…significantly, important bottoms in the RSI(14) at the 30% level since 1999 have coincided with key price lows and turning points – 61 cents (1999), 60.5 cents (2001), $1.25 (2008) and $2.42 (beginning of 2015)…
Watch for a potential breakout of Copper above the current downsloping flag during the second half of this year…
Today’s Equity Markets
Asia
China’s Shanghai Composite gained another 83 points or 1.7% overnight, closing at 4912…the next big test for the already technically overbought Shanghai is if it can push above resistance at 5000…interestingly, on this 20-year monthly chart, there has never been such a negative correlation between equities in China and the CRB Index…that gap will likely narrow during the second half of the year…
As expected, India’s central bank has lowered its key repo rate by 25 basis points to 7.25%…this is the Reserve Bank of India’s (RBI) third rate cut of the year, after lowering interest rates by the same amount in January and March…
Europe
European markets are mixed in late trading overseas as investors focused on the continuing negotiations regarding Greece’s debt problems (they face a $328 million payment to the IMF Friday) and new economic data…
North America
The Dow has lost 14 points through the first 90 minutes of trading…
In Toronto, the TSX is up 56 points as of 8:00 am Pacific while the Venture has shed 3 points to 688…
The chart below from Bloomberg shows how cash levels for junior exploration companies on the Venture have dwindled substantially (about 65%) since the beginning of 2012, though the rate of decline slowed noticeably in 2014…
Equitas Resources Corp. (EQT, TSX-V) Update
A few days ago, a member of our BMR team unexpectedly ran into Equitas Resources Corp. (EQT, TSX-V) President Kyler Hardy in Vancouver, renewing an acquaintance…Hardy seemed very relaxed and upbeat, quite content in his new role as President of Equitas – a company he has made some excellent progress with since coming on board late last year…he and his team are gearing up for a busy summer…
On May 13, Equitas released encouraging results from a VTEM plus airborne survey completed on its Garland Property, 30 km southeast of the Voisey’s Bay mine in Labrador…9 areas of conductivity prospective for Nickel-Copper sulphides have been identified with most responses at the very limit of, or significantly deeper than, detection limits of historic surveys…this is certainly a speculative play to watch closely over the next several months…exploration on the target areas is expected to commence in late June…evaluation of the anomalies will include mapping and prospecting, 30 line km of large-loop EM surveys, and up to 4,000 m of diamond drilling…
Since the discovery of the Voisey’s Bay deposit in the early 1990’s, small parcels of Garland have been owned by 9 separate companies…this is the first time that this large property has been consolidated under 1 owner…
EQT has been in a gradual uptrend since its restructuring late last year as you can see on this 2+ year weekly chart…the uptrend line and the rising 200-day moving average (SMA) at 7 cents are providing strong support…
EQT is unchanged at 10 cents as of 8:00 am Pacific…
Note: John, Terry and Jon do not hold share positions in EQT.
Will you be updating us on your thoughts about GBB? Do the BMR people still hold GBB shares?
Comment by Tom UK — June 2, 2015 @ 1:19 pm
Jon, what’s with this Venture market? Gold was up today, oil hit year high and yet the Venture keeps drifting lower every day. What’s it going to take to move this market?? Sorry, I don’t believe in charts for the most part.
Your thoughts?
Comment by Jeff — June 2, 2015 @ 1:43 pm
Jon: didn’t the Venture closely parallel the Shanghai index before??? what happened to that relationship? they are at record highs, and we are at multi year lows?
Comment by STEVEN1 — June 2, 2015 @ 4:33 pm
More importantly what are your latest thoughts on GGI? Jon what do you think is happening at Rodadero? And the Grizzly? If they own only one drill how can they drill LA Patillo and Rodadero at the same time? As one poster said ” was the drill moved from Rodadero to LA Patillo?
Comment by Dan — June 2, 2015 @ 5:09 pm
Hoping we receive some form of update for GBB. Or even a response to a number of posters requesting an update.
Comment by Ted — June 3, 2015 @ 5:36 am
BLO dead in the water…. low volume aside.. this is the reason that PR firms talk to the media and not the C-level mouthpieces…
Comment by Jeremy — June 3, 2015 @ 6:29 am
BLO is definitely not dead in the water, Jeremy – that’s what investors were saying last October when it was sliding. This has proven to be a very volatile play and sentiment in it can change quickly as we’ve seen. Technically, it has broken important support in the low 30’s, at last year’s high, but the longer-term moving averages remain very positive. It’s going to need time to stabilize and resume an uptrend but it’s pullbacks like this that have represented excellent entry points. BLO clearly has an exciting technology but the stock has been driven by momentum on the upside and then investor impatience on the downside – momentum will return again.
Comment by Jon - BMR — June 3, 2015 @ 6:38 am
JOn… I didnt mean long term but near term …. and yes it will regain some confidence but only after the alpha has proven itself… which based on the text from the buzzfeed it is now in question due to the sampling in the swedish study… also the comment of the beta not being ready this year is a huge fall on your face statement proven by the SP dropping almost 50% in less than a week…
I am with you on the excitement level… but it is still DITW until the alpha proves itself… which may in question now…
the beta release is certainly in question relative to timing…
they may be an early technology but as with anything, they gave away the window with their comments… there may be some snake oil perceptions out there now…
thus the sp drop… and their NR is very suspect in timing.. I think they knew they made a pilot error… this isnt a technical play and the momentum has been crushed…
while the volume has been good on the drop and there is belief in the future, it will take some time for that to happen now… the support is gone due to the comments made by the C-level… long road back I fear… and as always I hope I am wrong… and the only hope is that the shares are going into stronger less nervous hands..
Comment by Jeremy — June 3, 2015 @ 4:00 pm