Gold has traded between $1,100 and $1,110 after yesterday’s rout…as of 8:40 am Pacific, bullion is up $8 an ounce at $1,106…Silver is 17 cents higher at $14.84…Copper is flat at $2.47…Crude Oil is up 29 cents at $50.44 while the U.S. Dollar Index has retreated half a point to 97.44…
Sellers dumped an estimated 33 tonnes of bullion in just 2 minutes yesterday with a wave of orders placed shortly after the Shanghai Gold Exchange opened…the most active U.S. Gold futures contract plunged $48 an ounce to $1,180, the lowest price for the metal since February 2010…Japanese markets were closed for a holiday, so the timing of the “bear raid” could not have been better…reports are that at least 1 major fund took advantage of the thin market to push Gold through a critical support level on the charts, possibly because they had already sold Gold short…
You know the bottom in Gold can’t be far off when you read a headline this morning like this: “Let’s Be Honest About Gold: It’s a Pet Rock” (Jason Zweig commentary, Wall Street Journal)…mainstream media who can’t see beyond the U.S. borders simply don’t comprehend that Gold is actually a currency, not a pet rock, and remains one of the best-performing currencies in the world…importantly, the way Asians view Gold is far different than how Americans look at it…the transfer of wealth from west to east since the turn of the century has been dramatic, and Gold is part of that equation…it holds inherent value as a lasting, universally recognized form of wealth, and what’s critical is that it also essentially exists outside of government-controlled financial systems…
Gold 20-Year Monthly Chart
Gold’s slide has wiped out half the gains from the last decade’s historic bull run…
Gold’s average annual return between 2002 and 2011 was a whopping 18.7%…since it peaked at just over $1,900 an ounce in September 2011, however, the yellow metal has tumbled more than 40% – a healthy correction to cleanse overbought conditions that emerged during 2010 and 2011…keep in mind, Gold corrected 34% just in 2008 alone…
On our 20-year monthly chart this morning, you can see how Gold has finally broken below an uptrend line in place since the bull market began in 2001…this does increase the risk of a test of the $1,000 support level…RSI(14) is still holding support at its very gently sloping uptrend line going back to 2013 – it’ll be interesting to see if that continues, or if a breakdown occurs as well with that indicator on the long-term monthly chart…
Gold is now trading below all-in-sustaining costs for many producers…prices can’t remain at or below these levels for too long without supply becoming an issue, and the search for new discoveries has slowed considerably in recent years with a drastic drop in exploration…supply-demand dynamics will lend support to Gold and eventually push it significantly higher…what’s also different about this period compared to price slumps late last century is the demand component from Asia…demand from China and India will only intensify with Gold trading at or below where it is now…
Gold 5-Year Weekly Chart
Here’s another look at Gold with a 5-year weekly chart…an important support level is $1,066, just $14 below where bullion slid to during yesterday’s 4.3%, 2-minute rout…it’s safe to say we’re approaching an important low this quarter, over the short-to-medium term at least…
TSX Gold Index 15-Year Monthly Chart
Gold producers took a heavy hit yesterday as the TSX Gold Index fell an incredible 11.7% in just a single day…the decline in the index for the month to date is 20% after yesterday’s close at 121 which represents a 73% decline from the September 2011 high (vs. a 75% drop in the Venture Exchange)…there is strong support for the Gold Index at 115 and 110…
The index has recovered 5 points to 126 as of 8:40 am Pacific…
Gold In Canadian Dollars
Some strong Canadian-only producers have been sold off this month despite the fact that Gold in Canadian dollars continues to be in a general uptrend…in fact, since mid-2013, bullion has climbed 18% in Canadian dollars thanks to the decline in the value of the loonie vs. the U.S. dollar…
The balance sheets of smaller producers such as Richmont Mines (RIC, TSX) and Claude Resources (CRJ, TSX) are looking exceptionally good, so investors would be wise to focus on companies that are producing exclusively in Canada and benefiting from a Gold price that is still quite healthy in Canadian terms…in addition, the drop in Oil prices has helped to cut costs…
Today’s Equity Markets
Asia
China’s Shanghai Composite added 27 points overnight to close at 4109, about 40 points below key resistance on this rally…
Europe
European markets were down modestly today…
North America
The Dow is under pressure this morning, down 200 points as of 8:40 am Pacific, after some lackluster earnings reports from IBM and United Technologies…in Toronto, the TSX is up 18 points while the Venture is flat at 617…support at 609 and 598 as John’s chart pointed out over the weekend…
Venture Capital Investment vs. S&P 500
Interesting chart showing how venture capital investment is returning to dot-com era levels…it’s quite possible a major correction won’t start in the broader equity markets until we see a “spike” in venture capital investing as was the case in 2000…
Cannabix Technologies Inc. (BLO, CSE, BLOZF, OTC) Update
Non-resource plays continue to significantly outperform on the TSX, the Venture and the CSE…one of our favorites, the ever-volatile Cannabix Technologies (BLO, CSE, BLOZF, OTC) commenced its recovery June 24 when it touched an intra-day low of 13 cents, as John’s chart pointed out at the time…BLO had hit an area of exceptional support and has climbed more than 50% since then…
Cannabix in our view stands to benefit enormously from the growing social acceptance of marijuana in North America…development of the company’s groundbreaking technology – a marijuana breathalyzer – has been proceeding methodically (though never quickly enough for investors) with an alpha protoype unveiled at the beginning of June…BLO continues to work toward a beta version acceptable for 3rd party testing to assess the operability and measurement precision of the device for use by law enforcement…solid management team has guided this company wisely over the past year…
Below is a 6-month daily chart in U.S. dollars (based on OTC listing) as StockCharts.com still doesn’t provide charts for CSE-listed companies…note the recent breakout above the downsloping flag…
BLO is up 1.5 cents at 25.5 cents as of 8:40 am Pacific…
NexGen Energy Ltd. (NXE, TSX-V) Update
Gyrations in the markets have impacted even the very best of exploration plays, not the least of which is NexGen Energy (NXE, TSX-V) which has 5 drills currently operating at its high-grade Uranium discovery in the Athabasca Basin…
NXE remains in a strong overall uptrend despite the recent pullback from an all-time high of 90 cents…potential further upheaval in the markets could create an unusual opportunity here around the exceptional support in the low 60’s, but that could also be wishful thinking with NXE…anything is possible, though, in these volatile markets…
NXE is unchanged at 69 cents as of 8:40 am Pacific…
Calibre Mining Corp. (CXB, TSX-V) Update
Calibre Mining (CXB, TSX-V) released another set of results yesterday from its 2015 drilling program on the Eastern Borosi Gold-Silver Project in Nicaragua, which is being financed under an option agreement with Iamgold (IMG, TSX)…
- Diamond drilling at the Blag Gold-Silver vein system has further extended the defined mineralization on 3 targets, including the Main Blag structure, the East dome and the Santos trend;
- Drilling at Main Blag has intersected 5.4 m grading 3 g/t Au gold and 31.6 g/t Ag;
- Drilling on the East dome has intersected 19 m grading 223 g/t Ag and 1.1 g/t Au, as well as 9.4 m grading 489 g/t Ag and 0.7 g/t Au;
- Each of the first 4 holes on the Santos trend (1 km m west of Main Blag) intersected Gold mineralization, including 4.7 m grading 7.8 g/t Au and 5.6 m @ 2.2 g/t Au;
- Drilling in 2015 has totaled 41 diamond drill holes for a total of 5,917 m
Drilling continues on Iamgold-optioned ground (in green)…
Technically, support at the 9-cent level held during last November’s market meltdown…it’s strong support again now as defined by Fib. analysis and the rising 500-day moving average (SMA), not shown on this chart, which is also at 9 cents…
Note: Jon holds a share position in BLO.
Look at that first advertisement on stockhouse (upper left). I should have bought corn options couple months ago. I’d be rolling in dough. lol
Comment by dave — July 21, 2015 @ 8:17 am
Keep an eye on ske.
Comment by Tombc — July 21, 2015 @ 8:28 am
way to many shares out on ske
Comment by dave — July 21, 2015 @ 9:42 am
As mentioned before keep an eye on IMT.V
Comment by Jack — July 21, 2015 @ 10:26 am
I believe GGI is very good value at the present level with its multiple projects,so………I bought more today.
I would rather buy stocks on the CDNX now than the DJIA.
JMHO of course……
Comment by John Mundy — July 21, 2015 @ 11:05 am
did you mean IMP or were you correct in IMT. – IMT is associated in the mining industry, no thanks
Comment by dave — July 21, 2015 @ 11:18 am
Lol, Dave I said keep an eye on it, didn’t say buy it, lol.
Comment by Tombc — July 21, 2015 @ 11:20 am
Jon, do you think we will hear from either DBV or GGI this week? The longer this drags with no updates make it look like the companies are losing the battle and the likelihood drilling resumes quickly is even less. Farshad said they hope to resume drilling as soon as possible. That soon as possible is not looking to be to soon. The sentiment is pretty low right now.
Comment by Dan — July 21, 2015 @ 3:01 pm
Lol Tom, I know what ya said, my point is why even watch it, lol
Comment by dave — July 21, 2015 @ 3:34 pm
DBV – .08’s be gone
Comment by dave — July 21, 2015 @ 3:35 pm
In the case of GGI there is no reason not to provide us with an update on the Mexico properties (IMO) as the last time we read anything on these discoveries it was 9 April. But, because of the Sheslay problem, the weak market and the continuous selling (along with the price drop), Regoci may believe it is better to wait until the dust settles. In any event, I picked up my last GGI shares yesterday. I will not devote any more resources into the Sheslay area companies.
Comment by Andrew — July 21, 2015 @ 3:36 pm
Well geez Dave, at least they have nr’s to read!!! G, it’s time!
Comment by Tombc — July 21, 2015 @ 4:01 pm
Dave you take a great fun to talk about DBV !
Comment by Guy Delisle — July 21, 2015 @ 4:05 pm
Watch Kxplf for a probable real winner. Many here have really pumped it in the past. Own several Sheslay Valley’s but big loser on all. It should be said that whole gold/silver sector is in trouble and finger pointing isn’t fair.
Comment by Carl Sundmacher — July 21, 2015 @ 4:11 pm
From the Tahltan home page (Facebook)…
Great opportunity! The Tahltan Lands Agency (TLA), the arm of the TCC responsible for managing the land-related items, is looking for a manager to join our team! If anyone who is interested do not miss this chance to bring your career into the next level.
Comment by Andrew — July 21, 2015 @ 5:20 pm
Guy – it’s not fun, it’s serious. I’m sure not making any money right now. And I know many of you are down. I call it how I see it, and it’s pretty easy to do if you know TA and can spot trends and anticipate what may come. GGI is not doing any better. The metals are in bad shape right now. I don’t wish anyone to lose money. If I say that .04 might be possible if .08 breaks, and you buy more at .04, would you feel the same toward me or would you feel good that I gave a possible scenerio of what might come.
Comment by dave — July 21, 2015 @ 6:23 pm
This from Casey Research tonight: A bloodbath worse than the 2008 financial crisis. Commodities are getting crushed. The Bloomberg Commodity Index (BCOM) which tracks 22 different commodities, just hit its lowest level since April 2002. Commodities as a group are now cheaper than they were during the financial crisis.
Comment by dave — July 21, 2015 @ 6:27 pm
Ok Tom, lets put the jokes aside. If you want to watch another good one with some things going on in the gold sector holding its own, watch SSP along with SKE.
Comment by dave — July 21, 2015 @ 6:40 pm
Ok I’ll do that Dave, just remember, I’ve seen this befour, what goes down, will go up & vice versa, I heard from a reputable analyst that the us stocks & dollar will be like hanging on to an anchor,very soon.
Comment by Tombc — July 21, 2015 @ 7:42 pm
New job description fot Tahltan :
•support the protection of Tahltan environmental, social, cultural, heritage and economic interests that may be affected by industrial and resource development actions,
•assess potential impacts from new and existing industrial and resource development on Tahltan territory,
•identify options for avoiding or mitigating impacts, and
•ensure that Tahltan people are meaningfully involved in permitting processes and project reviews.
Comment by Guy Delisle — July 22, 2015 @ 4:16 am
ggi??…i thought Jon said it was a great buy at 8.5,so, it must be a terrific buy at 4.5???….this is amazing to come back to these prices…..
Comment by STEVEN1 — July 22, 2015 @ 5:50 am
Jon I know you are working hard on the facts regarding Sheslay and the blockade but when do you expect to be finished and informing your readers? Thanks.
Comment by Dan — July 22, 2015 @ 6:25 am
TOM – you are right. Improves in Sept and 2016 great year for the metals
Comment by dave — July 22, 2015 @ 6:28 am
Hi Dan, yes, we have been working hard on confirming some facts and our aim is to present something of interest/importance either later today or tomorrow at the latest.
Comment by Jon - BMR — July 22, 2015 @ 6:30 am
Yes, I’ll agree with john’s post#5,, if you have the nerve to ride out this mini tsunami we’ll be just fine. Let the nervous nellies be sorry….
Comment by Tombc — July 22, 2015 @ 6:42 am
will the venture breach below 600? sure looking like it.
Comment by tony T — July 22, 2015 @ 7:41 am
21. Steven, there will be little support for GGI unless Regoci releases some news of what is happening in Mexico. How many weeks have we be saying this for now? I have more than half a million GGI shares but will not add to my holding even though I can pick shares up at a fraction of my average purchase price. I will buy more if they release good news and I can get in quickly.
Comment by Tom UK — July 22, 2015 @ 7:42 am