Gold has traded between $1,175 and $1,189 so far today…as of 9:00 am Pacific, bullion is down $6 an ounce at $1,180…Silver is off 7 cents at $15.93…Copper has shed 3 pennies to $2.67…Crude Oil is 98 cents lower at $60.45 (see updated chart below) while the U.S. Dollar Index has gained half a point to 95.19…
Gold remains range-bound with near-term resistance at $1,200 and a support band between $1,150 and $1,170…breach of support at $1,150 would increase the probability of a test of the bottom of a downsloping flag (around $1,100) that bullion has traded in for more than 2 years…we’ll update that chart over the weekend…keep in mind that historically, June is one of the weakest months of the year for Gold, and this is typically followed by the best quarter of the year (July to September)…
Gold prices continue to face pressure from Gold-backed ETF outflows…SPDR Gold Trust said its holdings fell 0.2% yesterday to 704.23 tonnes, the lowest since September 2008…longer-term, this is definitely a bullish contrarian indicator…
Oil Update
OPEC is producing nearly a million more barrels of Oil each day than the target the cartel set last week, and the bulk of the excess is coming from 2 countries – Saudi Arabia and Iraq…
Iraq pumped about 3.8 million barrels a day in May, according to a monthly report from OPEC, a level that if sustained would set a national record…Saudi Arabia, meanwhile, said it put out 10.3 million barrels a day, a historically high figure up almost 600,000 barrels since its pivotal decision last year to abandon its usual strategy of defending Oil prices by cutting production…it’s a shot across the bow at arch-rival Iran, plus of course the Saudis are also attempting to take market share away from marginal North American shale producers…
Overall, OPEC said its 12 nations produced 30.98 million barrels a day in May – the highest level since September 2012 and a nearly 4% increase since May last year…together, and importantly, Saudi Arabia and Iraq accounted for over three-quarters of that growth…
Iraq has made gains in Asia, and Saudi Arabia has clawed back some lost sales in the U.S. and China, while also sending Oil to state-owned refineries for domestic consumption…
WTIC 6-Month Daily Chart
WTIC gained fresh momentum once its 50-day moving average (SMA) started to reverse to the upside in late March…it’s now providing support around $57, plus a band of Fib. support exists from $52 to $57…
A confirmed breakout above $62 would be significant – that’s the key area to watch on the upside as WTIC has so far not been able to sustain a price above that level…the declining 200-day SMA is currently $64.45…
Today’s Equity Markets
Asia
Asian markets were stronger overnight with Japan’s Nikkei leading the way with a gain of 337 points or 1.7% to close at 20383…China’s benchmark Shanghai Composite added 16 points as the release of April fixed asset investment, together with May retail sales and industrial production, matched analysts’ expectations…
Europe
European markets finished slightly higher today, trimming their gains after the IMF poured some cold water on hopes that a deal between Greece and its bailout supervisors was near…according to a Reuters report, an IMF spokesperson said that “major differences” remained with Greece and that the IMF had left talks in Brussels…
North America
The Dow is extending its big gains from yesterday, climbing another 51 points as of 9:00 am Pacific…U.S. retail sales surged in May as households boosted purchases of automobiles and a range of other goods even as they paid a bit more for gasoline, the latest sign economic growth is finally gathering steam…the Commerce Department reported today that retail sales increased 1.2% last month – in line with expectations – after an upwardly revised 0.2% gain in April…retail sales excluding autos, gasoline, building materials and food services, retail sales increased 0.7%…
The number of Americans filing new claims for unemployment benefits rose slightly more than expected last week, but remained in territory consistent with a strengthening labor market…
In Toronto, the TSX is off 54 points at 14835 as of 9:00 am Pacific…some technical weakness has crept into this 2.5-year weekly chart, and we’ll see if the 200-day SMA at 14871 is able to provide much some-needed support…
The Venture is flat at 682 as of 9:00 am Pacific…nice drill result this morning from Avnel Gold Mining (AVK, TSX-V) which continues a 30,000-m program to support a definitive feasibility study for its Kalana Main Project in southwestern Mali, West Africa…KA-SON-RC585 intersected 100.3 g/t Au over 10 m including an exceptionally high-grade 1-m interval of 844.7 g/t Au…an updated mineral resource estimate is expected in 3-4 months…
Abitibi Royalties Inc. (RZZ, TSX-V)
Interesting article in today’s Financial Post regarding Abitibi Royalties (RZZ, TSX-V)…President Ian Ball is trying to do something that is almost unheard of in the mining industry: use the Internet in a creative way (that in itself is a story)…check out their web site at www.AbitibiRoyalties.com…
The company has launched an online platform this week called the “Abitibi Royalties Search”…the web site invites cash-poor junior mining companies to submit data on their projects…if Abitibi likes what it sees, it will cover the cost of the claim fees and taxes on the project, which may be unaffordable for the struggling miners…in return, Abitibi receives a permanent royalty…
As the Post’s Peter Koven wrote, Abitibi is a small player in the mining royalty space which is dominated by Franco-Nevada, Royal Gold and Osisko Gold Royalties…those firms will always get first crack at the most promising royalties, and they have billions of dollars to spend on them…Abitibi only has about $35 million to play with, and needs to think creatively and target early-stage projects if it wants to find opportunities that the big players overlook…
The web site idea is partly inspired by the famous “Goldcorp Challenge”…in 2000, Goldcorp’s (G, TSX) then-chief executive Rob McEwen released all the company’s geological data for the Red Lake Gold mine online, and invited the public to provide advice on drilling targets…ultimately, the advice helped Goldcorp make some key discoveries at Red Lake, which is still thriving today…the prize money paid out was slightly more than $500,000, a bargain compared to what Goldcorp got…
NexGen Energy Ltd. (NXE, TSX-V) Update
Summer drilling is now underway at NexGen Energy’s 100%-owned Arrow zone (Rook I Property) in the southwest part of Saskatchewan’s Athabasca basin…the program will utilize 5 diamond drill rigs…2 rigs are currently in operation with all 5 scheduled to be turning by June 20th…
Two drill rigs will focus on testing the extent of high-grade uranium mineralization in the A2 and A3 cores as the company drives Arrow toward an initial resource estimate…a 3rd rig will test previously undrilled areas of the A1, A2 and A3 shears targeting high-grade uranium mineralization similar to that found in AR-15–44b (40.45 m of off-scale radioactivity – assays pending)…the 4th and 5th rigs will test high priority regional geophysical targets on the Rook I Property along the Patterson and Derkson Conductor Corridors…
NXE has advanced another nickel to 62 cents as of 9:00 am Pacific…looks like confirmation of a breakout today as you can see in John’s 2-year weekly chart…
PyroGenesis Canada Inc. (PYR, TSX-V)
PyroGenesis Canada (PYR, TSX-V) has come out with some interesting news in recent days, including Monday when it announced something that could be quite revolutionary…PYR has been engaged by an unnamed junior mining and metals company to evaluate the feasibility of using plasma for the purpose of refining ore into pure metal, in this case converting quartz into pure silicon metal…
“The world market for silicon metal is about 1.8 million tonnes per year and ore refining represents an interesting application of our plasma capabilities,” said Pierre Carabin, PyroGenesis’s director of engineering…
PyroGenesis is the world leader in the design, development, manufacturing and commercialization of advanced plasma processes, and its Plasma Atomization Process (PAP) is an enabling technology for 3D Printing…
Technically, PYR is gaining momentum with an RSI(14) bullish “W” and steady accumulation (CMF) since March…it has traded within a downsloping flag since late 2013 and could be gearing up for a test of resistance at the top of that flag…
PYR is up a penny at 36 cents as of 9:00 am Pacific…
Discovery Ventures Inc. (DVN, TSX-V) Update
As we pointed out yesterday, Discovery Ventures (DVN, TSX-V) has received a major boost after announcing it has signed a definitive agreement with investor Dan Omeniuk for $7 million in credit facilities to advance the company’s high-grade WillaMAX Gold-Copper Project in southeast British Columbia…Omeniuk will bring much more than just financial strength to DVN, given his business background which includes a highly successful trucking/transport company…
Technically, DVN appears to have started another one of its summer runs with a confirmed breakout above Fib. resistance at 17 cents…since the first announcement regarding Omeniuk May 29, volume in DVN has surged…it hit nearly 3 million yesterday (all exchanges)…
This is an exceptionally bullish chart, and note the measured Fib. resistance level above the 40-cent chart resistance…
DVN is up half a penny at 18.5 cents as of 9:00 am Pacific…
Kennady Diamonds (KDI, TSX-V) Update
More drill results this morning from the Kennady North diamond project in the Northwest Territories…6 of the approximate 20 drill holes planned at the Kelvin kimberlite have been completed with the latest hole intersecting 160 m of kimberlite…5 of the 6 holes have confirmed the current geological model with the 6th having delineated approximately 80 meters of kimberlite outside of the current model…meanwhile, improved ground conditions at the Faraday 2 kimberlite have enabled KDI to commence land-based exploration/delineation drilling sooner than expected there…
Processing of core samples by caustic fusion is continuing on schedule with the diamond recovery results from a 2.7- tonne Kelvin North sample expected within the next 2 weeks and the results from a 1-tonne Faraday 2 sample expected in early July…processing of the Kelvin 436 tonne bulk sample by dense-media separation is also underway with results during during the 3rd quarter…
KDI is up 17 cents at $5.27 as of 9:00 am Pacific…
Columbus Gold (CGT, TSX-V) Starts Drilling In Nevada
Columbus Gold Corp. (CGT, TSX-V) has commenced drilling at its 100%-owned Eastside Project in Nevada…drilling will consist of 250 rotary holes with 175 of those (about 45,000 m) planned to be completed in 2015…a second rig will be added in late June…
CGT is aiming to extend the area of known Gold mineralization at the original target, and to infill gaps between widely spaced existing drill holes containing significant Gold…the 2015 drilling also includes up to 25 of the 175 holes to test new targets 4 and 6, and the northern half of new target 1…
CGT is up a penny-and-a-half at 43 cents as of 9:00 am Pacific…
CMC Metals (CMB, TSX-V)
Jack Ball’s CMC Metals (CMB, TSX-V) enjoyed a big day yesterday, gaining a penny on total volume (all exchanges) of just under 13 million shares as the company put out news regarding its Radcliffe Gold Project in California which it’s trying to advance to small-scale production…CMB turned around this morning and announced it has arranged a $550,000 financing at a discount to the market (5 cents) – 1.1 million shares at a nickel plus a full warrant, exercisable at 7 cents per share for a 2-year period…
Technically, CMB has broken above a downtrend line and we’ll see if previous resistance at 6 cents can now hold as new support…next Fib. resistance is 7.5 cents…CMB has good possibilities over the summer if the company can finally get some of the high-grade material at Radcliffe processed, either at its Bishop mill or a nearby smelter…
CMB is off a penny at 6.5 cents as of 9:00 am Pacific…
Note: John, Terry and Jon do not hold share positions in RZZ, NXE, PYR, KDI, CGT, and CMB.
