Gold has traded between $1,109 and $1,122 so far today…as of 10:35 am Pacific, bullion is flat at $1,117…Silver has tumbled 48 cents to $14.84…Copper has shed 3 pennies to $2.28…Crude Oil hit more than a 6-year low this morning but is now up 45 cents to $42.32 while the U.S. Dollar Index has added more than one-tenth of a point to 97.01…
Surprise (not really)!…China’s economy is growing more slowly than official data suggest, Bloomberg says, helping explain why policy makers in that country have stepped up stimulus and devalued the yuan to boost exports…the economy expanded 6.3% in the 1st half, compared to the officially reported 7%, according to the median estimate of economists Bloomberg surveyed last week…the London Metal Exchange Index of 6 metals fell to a 6-year low yesterday and Aluminum had its lowest close since July 2009…nonetheless, China can be expected to continue to magically report 7% growth which is their official target…
The numbers Chinese authorities report simply can’t be trusted…this is a communist regime which excels at manipulating and deceiving its own people, and we saw a great example of that in how the equity markets have performed there this year…that’s why we had to chuckle at recent mainstream media commentary that stated there’s a “new trend toward more transparency on China’s part” in terms of reporting its Gold reserves as the country pushes for the yuan’s inclusion in the IMF’s currency basket…
Our question is, did China actually lie about the amount of Gold it accumulated between late 2009 and the end of June?…in other words, did they actually gobble up much more than they announced, and will they now make it seem like they’re ramping up their purchases?…will they produce an even higher Gold accumulation figure for August?…who knows what the real numbers are, though it’s quite apparent that China has been accumulating significant amounts of Gold to back up its currency…
It’s more than interesting that China went nearly 6 years without updating its reserves and then suddenly provided 2 updates in less than 30 days…the central bank said it increased its reserves by 1.1% in July to 53.93 million ounces…that pace of purchases works out to 240 tons per year, well ahead of the pace of 100 tons per year since 2009 as reported last month…China is simply being “more transparent”, the mainstream media are claiming…
Gold 35-Year Monthly Chart
Below is a 35-year monthly Gold chart which shows a weakening bearish trend while RSI(14), despite the recent multi-year price low, continues to hold strong support at nearly 40%…important price support, as John identified prior to last month’s drop to $1,072, is $1,068 (Fib. level)…an uptrend line intersects through $1,000, so that can’t be ruled out as an ultimate bottom…the declining 200-day moving average (SMA) has provided strong resistance – momentum in Gold should shift dramatically at the point the 200-day reverses to the upside…
Oil Update
The slide in Oil prices continues which has been no surprise given the bearish fundamentals and technical…the stunning fact is that Saudi Arabia, Iraq and the U.S. together have added 2 million barrels a day to the world Oil supply since last fall’s price collapse…and now there’s the threat of Iran’s return to the market, albeit that’s a difficult supply source to forecast…Iran has said it could increase exports by a million barrels a day, but analysts have been skeptical and see it adding less output…however, Iran also has an estimated 50 million barrels of Crude on tankers that could be sent to global markets quickly…
In the U.S., meanwhile, despite large spending cuts on new drilling, output in the has held steady near multi-decade highs…production in North Dakota, a key producing state, rose in June compared with May…
WTIC 2-Year Weekly Chart
Fresh resistance for Crude is now at $45…the bearish trend is gaining strength and a drop to strong support in the mid-$30’s does seem likely at some point later this quarter or by early Q4…the 50-day SMA is declining rapidly and that will also restrain any rallies…
Gold-Crude Comparative
Gold and Crude often but don’t always move in unison, and the correlation is clearly weakening significantly as you can see in this 34-year weekly chart…
U.S. Dollar Index Updated Chart
What this chart tells us is that the U.S. Dollar Index likely peaked, for this year at least, in March at 100.71…the question now is whether the primary support band will hold between about 93 and 96…the 100-day SMA is beginning to roll over, and the SS indicator shows momentum is weakening…note how the RSI(14) stayed at extreme overbought levels for an extended period – highly unusual, and often that kind of pattern can be followed by a period of very oversold conditions…the bulls who are expecting the Dollar Index to perform strongly through the balance of the year could be in for a nasty surprise…
Failure of the primary support band could cause a tumble down to the 88 level which would certainly be supportive of Gold…
Republican Field Getting Trumped
Donald Trump is surging in the polls – it’ll be interesting to see if he can maintain that momentum through a grueling primary season – because he’s not acting like a politician (Stephen Harper could learn something here as he battles career politicians Justin Trudeau and Thomas Mulcair)…Trump is telling Americans what they need to hear, not what they want to hear…he’s also putting Americans first, not illegal immigrants first…
Trump has won his party’s trust on top issues more than any other Republican presidential candidate, and now stands as the clear leader in the race for the GOP nomination according a new CNN/ORC poll…Canadian-born Senator Ted Cruz, a very worthy candidate, is sitting at just 5%…
The Canada-Mexico Problem
It seems Mexico is not only a problem for the U.S. – it’s also an issue for Canada, though in different ways…
Since 2012 Canada has been losing market share to Mexico with regard to non-Oil exports to the United States as this chart from Bloomberg shows…during that time the relationship between the Canadian dollar and the Mexicana peso has been flat, so currency differences aren’t the explanation…
Mexico is simply a cheaper place to produce…it also has enough human capital and engineering skills to manufacture almost everything Canada can and do it a lot cheaper…the socialists in this country who are demanding a $15 minimum wage and higher taxes on a broad array of businesses to pay for social experiments we can’t afford, and don’t work, are simply out of touch with economic reality….resource extraction will also be made more difficult under either an NDP or Liberal regime (or combination thereof) in Ottawa…
Today’s Equity Markets
Asia
China’s Shanghai Composite plunged 6% overnight to close at 3749, its lowest level since August 7 as concerns over the yuan eclipsed data which showed monthly home prices up for a 3rd straight month in July…
Europe
European markets were down slightly today…
North America
The Dow has fallen 36 points as of 10:35 am Pacific…U.S. housing starts rose to a near 8-year high in July as builders ramped up construction of single-family homes…the Commerce Department report this morning added to solid payrolls, retail sales and industrial output data in suggesting the economy got off to a strong start in the 3rd quarter…
The TSX has declined 61 points while the Venture is off 5 points at 566…
Venture Long-Term Chart
This long-term Venture chart shows extreme oversold conditions on an historical basis…when you look at this 16-year monthly chart in combination with the 39-week “cycle” chart we’ve been highlighting recently, it’s very reasonable to expect a significant rally in this market in the not-too-distance future – within the next several weeks…
Pure Energy Minerals Ltd. (PE, TSX-V) Update
Pure Energy (PE, TSX-V) conducted a conference call this morning that just concluded within the last 45 minutes or so…it was extremely informative – we suggest investors who may have missed the live call check out the recorded version the company said it will be posting on its website…
Pure Energy has a fabulous zip code – Nevada – to evolve into an important, low-cost North American Lithium brine producer in a highly favorable, friendly jurisdiction where the company is getting strong support from the state government…recently, PE released a NI-43-101 inferred Lithium resource for its Clayton Valley Project…an updated resource estimate could come prior to year-end, and initial work has also commenced on a Preliminary Economic Assessment…recent company visits to Asia and Israel have further demonstrated intense interest in the project as stated in the conference call this morning…
The Clayton Valley Project has an exciting technology component to it in terms of the potential extraction process, a technology that has been developed by a major player…
Pure Energy is also aiming attract a strategic partner and secure a supply agreement that it believes is technically and commercially feasible (keep in mind, Western Lithium reached a $100 million market cap without a supply agreement)…
From a market standpoint, this morning’s call noted the company’s recent increased exposure for Pure Energy in the U.S. due to its OTCQC listing…
Technically, PE showed strong support as expected in the mid-to-upper 30’s recently after retreating from Fib. resistance at 47 cents…it’s unchanged at 39 cents as of 10:35 am Pacific…
Integra Gold Corp. (ICG, TSX-V) Update
Major news out of Integra Gold (ICG, TSX-V) as the company announced Eldorado Gold (ELD, TSX) will make a $14.6 million strategic investment in Integra by way of a non-brokered private placement of common shares of ICG at 28 cents per share…that’s an 11% premium to the 20-day volume-weighted average price of Integra on the Venture through yesterday…
ICG is up a penny on strong volume at 27.5 cents as of 10:30 am Pacific…5 rigs will be operational by month-end at the company’s Lamaque Project near Val d’Or, so another period of intense drilling should really capture investors’ attention along with this investment by Eldorado…
ICG 2-Year Weekly Chart
Note: John and Jon do not hold share positions in PE or ICG.
Hey Jon, nice bit on Pure Energy ,you summed it up quite well. Conference call had some great information. These boys are onto something, their right in your back yard, have them pick up the lunch tab one day!
One of the interesting things to me is, with Pure’s property neighbouring Albemarle/Rockwood’s Silver Peak and the location running out of resource virtually “sold out of supply” they said. Pure Energy’s property is contiguous to Silver Peak, this could be a buy out by Albermarle/Rockwood has infrastructure in place already, albeit evaporation ponds vs Pure’s new green technology plans with Posco(Korea) or Tenova Bateman(Isreal). In July 2014, Albermarle bought out Rockwood for $6.2 billion, Silver Peak was just one of the properties in the deal. Pure Energy could be ripe for a buy out …. same zip code also. CEO said additional news due out by end of the week, looking forward to it!
Comment by vepper — August 18, 2015 @ 1:53 pm
Looks very good, Vepper…I like it even more after that conference call.
Comment by Jon - BMR — August 18, 2015 @ 1:56 pm
My apologies, I neglected to include Albermarle/Rockwood merger news release:
http://investors.albemarle.com/phoenix.zhtml?c=117031&p=irol-newsArticle&ID=1947397
Comment by vepper — August 18, 2015 @ 1:59 pm
aged but still relevant?? EQT
http://aheadoftheherd.com/Newsletter/2015/Troctolites_Rock.htm
Comment by Jeremy — August 18, 2015 @ 2:00 pm
Jim Niles – your post #41 from yesterday is dead on.
Comment by dave — August 18, 2015 @ 2:02 pm
So. I may be able to pick up more shares of EQT if the PP closing announcement is not until next week. I heard the PP is oversubscribed along with the FT shares. Wonder who participated? That will be interesting. Also posters on SH say drill enroute to site. I didn’t think there would be another opportunity to pick up shares under 12 cents. Then again maybe there won’t.
Comment by Dan — August 18, 2015 @ 2:53 pm
Dan I expect it to trade between .11 and .13 the rest of the week with lighter volume. We are in the period of the quiet before the storm, but it won’t be weeks before the storm. A lot more money wanted in. The exchange can let it run a little before final closing, but I can’t state why, sorry. Anyway, no matter what it does the rest of the week and no matter how you look at it, the window to buy really narrows down right now. This is going to run hard after the closing and I can’t say nothing on that either. Many can speculate or guess, I say just watch.
Comment by dave — August 18, 2015 @ 3:20 pm
Wonder why GGI went ahead before DBV? Could it be DBV requires more funding to continue? Strange as they have everything in place. All that is needed is a crew to operate the drill.
Comment by Dan — August 18, 2015 @ 3:36 pm
Dan, I imagine there’s a lot going on behind the scenes (talks with a major, perhaps, on DBV’s part?) and hopefully we’ll hear from DBV shortly. At the moment GGI is carrying the flag into the district and I suspect we’re going to see some fireworks soon enough. GGI is ready for a breakout, chart tomorrow. My sense is they have their rhythm back, and that’s very bullish.
Comment by Jon - BMR — August 18, 2015 @ 3:48 pm
You have a point Jon. Maybe they used a hand held analyzer on a portion of the core from hole 25 and already have a fair idea of what grades are.
Comment by Dan — August 18, 2015 @ 3:58 pm
Jon, lets rock GGI to that breakout. Hope it happens and soon.
Comment by dave — August 18, 2015 @ 4:20 pm
EQT. Many can speculate but reality is the drill will hit the ground soon. The results of the UTEM could also be a catalyst. The beauty about the VTEM in May was it enabled them to pin point the potential sulfide and thus the ground work may have even uncovered some clues even before the UTEM. Who knows maybe some nickel Laden rocks at surface. But I think investors eyes will also open when it is announced the participants who put down the money to drill. IMO.
Comment by Dan — August 18, 2015 @ 5:00 pm
I would agree, Dan. More tomorrow with Hardy. It’s a big, important play on that side of the country – certainly evidenced by the demand re: the PP. It will rock as the drilling nears. Perhaps Garland and Sheslay district can create some magic and pull this market out of the doldrums.
Comment by Jon - BMR — August 18, 2015 @ 5:55 pm
DBV, Do you think the holes 24 and 25 have been sent to the laboratory??? After blockade Farshad and Abdul are remained on the site long enough to log the two holes and prepare for the lab, same if this hole is not finish !!!
Comment by Guy Delisle — August 18, 2015 @ 6:25 pm
My guess is probably no, Guy, just a guess, and you can thank Chad Day for that. Everybody was out by Thursday/Friday of that crazy week. Hole 25 was left in a zone of mineralization at 270 m. They obviously would have some visuals, and they did give the market that information re: the blockade hole. Don’t you find it curious that Chad ran this blockade at precisely this particular time, during a 1-km step-out from the discovery zone? This had nothing to do with “protecting the Sheslay” and everything to do with his political and economic agenda. His antics have obviously started to backfire.
Comment by Jon - BMR — August 18, 2015 @ 6:40 pm
Jon, I am excited for B.C. to rock too. I can’t agree more. It would be great to have 2 major discoveries on each end of Canada. My understanding is hole 24 and 25 hit something good, but my contact up there is not a mining guru, so his info is very generic you might say. Of coarse, Farshad would never comment until results are in. I have no idea what they hit just hearing its good. DBV has to get going again, and of coarse GGI hopefully drills into that “engine” zone.
All of this will not come together up there before the drill starts turning at the Garland with EQT. This is why I feel EQT doubles first unless GGI assays are back by end of week.
Comment by dave — August 18, 2015 @ 7:33 pm
Someone from National Bank must have read my earlier post. their buying DBV, lol
Comment by dave — August 19, 2015 @ 6:43 am
Are there rumours of a major sniffing around DBV? I’ve seen a few comments now relating to a possible major in the area….
Comment by Steve A. — August 19, 2015 @ 6:52 am
The district should come back to life in a hurry, Steve.
Comment by Jon - BMR — August 19, 2015 @ 7:06 am
Sorry Dave National Bank did not read your post but considers that it is time to embark, is my nephew!
Comment by Guy Delisle — August 19, 2015 @ 7:07 am
GUY – cool, I was just being funny.
Comment by dave — August 19, 2015 @ 7:37 am
I’ll agree Jon, I can feel the ground trembling 900 kms to the south, a major eruption is in the making!!! Dbv, ggi, ske.
Comment by Tombc — August 19, 2015 @ 7:44 am
Get ready to rumble, as they say…
Comment by Jon - BMR — August 19, 2015 @ 7:45 am
Steve A . Don’t for get the connection between Dr Razeque and Antofagasta and I suspect they have already been at the Hat site earlier this year.
Comment by Les — August 19, 2015 @ 7:59 am
I agree with you Les Razique(is or was I don’t know)consultant for Antofagasta !
Comment by Guy Delisle — August 19, 2015 @ 8:12 am
SKE looks like it might break out soon too. Whew hew
GGI doing fine.
EQT – I am starting to notice a possible triangle forming on the chart. The breakout to the upside off these triangles are normally huge, John’s opinion is welcome. I bought YFI back in May just in time on the triangle pattern, it went from .20 to .62 in short order.
Comment by dave — August 19, 2015 @ 8:13 am
Good point Les – once this Tahltan issue gets resolved I’m sure we’ll be much more attractive in th eyes of a major, perhaps Antofagasta!
Comment by Steve A. — August 19, 2015 @ 8:14 am
map update;
garibaldiresources.com/i/maps/Grizzly/Aug-2015-Sheslay-District-Map_sm.jpg
Comment by Martin — August 19, 2015 @ 8:27 am
ABR: biggest volume since September 2013…! 2.5M traded so far today, up 100%, Sheslay on fire…
Comment by Richard_MTL — August 19, 2015 @ 8:39 am
Thats a great NR on ABR, Lithium is good to be in right now also. Things are starting to come back in mining despite the TSX.V falling further. I smell the bottom soon.
Comment by dave — August 19, 2015 @ 8:46 am