Gold prices have hit a 4-week high today on some short-covering and safe-haven demand…as of 9:30 am Pacific, ahead of today’s Fed minutes, bullion is up $12 an ounce at $1,130…it has traded as low as $1,116 and as high as $1,131, the 40-day moving average (SMA) which has served as stiff resistance since late June…Silver has added 46 cents to $15.32…Copper is down 2 cents at $2.27…Crude Oil has fallen $1.75 a barrel to $40.87 while the U.S. Dollar Index is off more than one-tenth of a point to 96.85…
Gold is showing signs of having put in a bottom although much will be determined by today’s release of minutes from the July meeting of the FOMC, according to analysts at Commerzbank. “The rapid price recovery shows that lower prices generate buying interest and cause the selling pressure among speculators to abate. Gold currently appears to be in a bottoming-out phase, which could well continue for some weeks yet before any more sustained price recovery can be expected.”
Fed minutes will be released at 11:00 am Pacific…it’s important to keep in mind, however, that since the minutes are released with a 3-week lag, they don’t capture how the landscape has changed since the Fed’s July meeting…there have been significant economic developments in recent weeks that will factor into the Fed’s decision next month – most importantly, China’s currency devaluation and a continued slide in Oil prices that seem to weigh against raising rates…
White Paper Critiques Fed Actions
Stephen Williamson, Vice-President of the St. Louis Fed, finds fault with 3 key policy tenets of Fed actions in a recently released white paper (Current Federal Reserve Policy Under The Lens of Economic History: A Review Essay) dissecting the U.S. central bank’s actions to stem the financial crisis in 2008 and 2009…
Specifically, he believes the zero interest rates in place since 2008 that were designed to spark good inflation actually have resulted in just the opposite…and he believes the “forward guidance” the Fed has used to communicate its intentions has instead been a muddle of broken vows that has served only to confuse investors…finally, he asserts that quantitative easing, or the monthly debt purchases that swelled the central bank’s balance sheet past the $4.5 trillion mark, have at best a tenuous link to actual economic improvements…
Williamson is quick to acknowledge, however, that then-Chairman Ben Bernanke’s Fed, through liquidity programs like the Term Auction Facility that injected cash into banks, “helped to assure that the Fed’s Great Depression errors were not repeated”…
Canadian Feds In Court Against 5 First Nations
The Globe and Mail reported this morning that lawyers for the federal government are in court today to persuade a judge to force 5 First Nations to open their books to the public…the reserves are protesting the government’s transparency law, which since last year requires all First Nations to post their salaries and audited financial statements online…Aboriginal Affairs Minister Bernard Valcourt has said the legislation makes financial information more accessible to band members and leads to “more effective, transparent and accountable governance, as well as stronger, more self-sufficient and prosperous communities”…
Some band leaders argue the law is about controlling aboriginal communities and breaches their indigenous rights…
“It’s bad legislation”, said Perry Bellegarde, national chief of the Assembly of First Nations, who plans to attend some of the 2-day hearing in federal court in Saskatoon…
Sorry, Mr. Bellegarde, it’s the right legislation and should have been introduced a long time ago…
Last year, after the government’s November deadline had passed, it withheld “non-essential” funding from almost 50 reserves that had yet to disclose their numbers…it proceeded with court action against 5: the Sawridge and Athabasca Chipewyan First Nations in Alberta and the Thunderchild, Ochapowace and Onion Lake bands in Saskatchewan…
Gold-WTIC Comparative
As we noted yesterday, Gold and Oil don’t always move in tandam…bullion’s relative performance vs. Crude is similar to the situation in late 2008, which preceded a strong move higher in Gold prices…this kind of environment is very bullish for Gold producers in particular…
Crude prices hit their lowest in almost 6-and-a-half years this morning after U.S. data showed an unexpected rise in stockpiles…U.S. Crude stocks were up 2.6 million barrels at 456.21 million barrels last week, the U.S. Energy Information Association (EIA) reported…stocks at Cushing, Oklahoma, the delivery point for U.S. Crude futures, rose 326,000 barrels to 57.44 million…
Today’s Equity Markets
Asia
China’s Shanghai Composite plunged as much as 5% in early trading overnight before the communist government’s “rescue team” jumped in and reversed the market to the upside…the Shanghai closed up 46 points (1.2%) at 3795, so it was a volatile session…
Vietnam allowed its currency to weaken by at least 1% today following the devaluation of the Chinese yuan and the expectation of a possible U.S interest rate hike. “Following the strong devaluation of the Chinese yuan, domestic market sentiment is very much concerned with the negative impact of a United States Federal Reserve interest rate increase,” the central bank said in a statement…
Europe
European markets were down sharply today…
North America
The Dow is off 192 points as of 9:30 am Pacific…the Labor Department reported this morning that its Consumer Price Index edged up 0.1% last month (vs. expectations of 0.2%) after advancing 0.3% in June, marking the 6th straight month of increases…in the 12 months through July, the CPI has climbed 0.2%, well below the Fed’s target rate…
In Toronto, the TSX is down 134 points as the slide in Oil prices is offsetting gains in the Gold Index, while the Venture is off 5 points at 558…Pure Energy Minerals (PE, TSX-V) gapped up this morning – not surprising, given yesterday’s conference call – and is currently up a nickel at 43 cents on strong volume…more on PE later in the week…
Garibaldi Resources Corp. (GGI, TSX-V) Update
Last Friday’s all-time record volume day for Garibaldi Resources (GGI, TSX-V) was no coincidence in our view as the company appears to have regained its rhythm in both Mexico and British Columbia…interestingly, GGI came to life when it was trading around a nickel in a weak overall market (similar bearish sentiment as now) in late June 2013, and then proceeded to soar 600% over the next 12 months…just 1 of the advantages GGI has going for it now is the fact there is no longer any fund “overhang” given the fact that Sprott Securities‘ nearly 20% position in the stock has been completely taken out, mostly by a strong retail crowd given the nature of the trading activity during the 1st half of the year…
Technically, GGI is ideally positioned for an imminent breakout with classic signals as you can see in this 2.5-year weekly chart:
1. RSI(14) conditions became extremely oversold during June and July, with this indicator now showing increased up momentum and threatening to push above a downtrend line in place since late last year;
2. GGI this morning is pushing above a price downtrend line in place since March;
3. The ADX indicator clearly shows that the bearish trend has peaked;
4. Sell pressure (CMF) has reversed into weak buy pressure.
GGI’s technical and fundamentals are now properly aligned for the 1st time in months…besides pending assay results from Mexico, Garibaldi’s exploration crews are on the ground at the Grizzly in the prolific Sheslay district, focusing on 2 key areas to prioritize drill targets – Grizzly Central and the recently acquired Golden Bear claims where a high-grade Gold showing is being investigated…
The possibility of a stand-alone high-grade Gold deposit in the Sheslay district is a very real possibility given how “cooked up” this entire district is…keep in mind that the Golden Bear mine access road – with the “Bridge Over the River Sheslay” – was built (with plenty of Tahltan help) for the past producing high-grade Golden Bear mine immediately to the east of the Grizzly, while the Spectrum Project on trend to the southeast of the Sheslay district features a high-grade Gold deposit in addition to a Cu-Au porphyry system…
With the possibility of both Garibaldi and Doubleview Capital Corp. (DBV, TSX-V) drilling simultaneously in the near future, the Sheslay district – described as B.C.’s “#1 greenfield project” by AME BC – could provide the spark the junior resource market needs…
GGI is up half a penny at 7 cents as of 9:30 am Pacific, while DBV has edged up 1.5 cents to 11.5 cents…
Equitas Resources Corp. (EQT, TSX-V) Update
Equitas Resources (EQT, TSX-V) is raising up to $1.8 million as it proceeds toward drilling at its Garland Nickel Project in Labrador…the company announced its non-brokered private placement plans yesterday which we interpret as an indication of strong interest in this exploration play from some serious players, especially considering the current overall market climate…
As we stated in Tuesday’s Morning Musings, people make the difference, and hard-working President Kyler Hardy has helped assemble a highly qualified team with expertise in all facets of the business…
Click on the arrow below to listen to more of our recent interview with Hardy as he comments on Everett Makela, EQT’s VP-Exploration who brings over 30 years of experience to Equitas which includes important roles with Inco and Vale (he retired from Vale as Principal Geologist, North America, in 2012)…he’s intimately familiar with the Voisey’s Bay deposit and the area…
Dalradian Resources Inc. (DNA, TSX)
Readers may wish to perform their due diligence on Dalradian Resources (DNA, TSX) which has been 1 of the best performing Gold stocks over the last year or so…in March, the company launched a 20,000 m infill drilling program at its Curraghinalt high-grade Gold project in Northern Ireland in support of its previously announced prefeasibility study (planned production of 162,000 ounces per year, 18-year mine life, 30% after-tax IRR based on U.S. $1,054 Gold, and an initial low capex of $250 million – not based on reserves)…
The Curraghinalt deposit is a lode Gold system consisting of a series of structurally controlled, high-grade Gold bearing quartz-carbonate veins…remains wide-open for expansion…Northern Ireland is a resource-friendly jurisdiction with a highly developed infrastructure that welcomes and supports investment…
Technically, DNA has been trading in a horizontal flag since late last year with strong support at its rising 200-day SMA (89 cents)…looking out over the next several months, Dalradian has a good chance to continue to out-perform the sector…
DNA is up 2 pennies at 92 cents as of 9:30 am Pacific…
Kaminak Gold Corp. (KAM, TSX-V) Update
Kaminak Gold (KAM, TSX-V) has provided a couple of encouraging updates on its Coffee Gold Project in the Yukon over the last 3 weeks, the latest being last Thursday…any upside surprises in Gold in the near future should give KAM a lift…
Infill drilling (70,000 m) is now complete on all Coffee deposits, demonstrating good agreement with the existing block model…this is expected to result in a high conversion rate of in-pit resources from inferred to indicated in the updated 2015 block model underpining the Feasibility Study which is scheduled for completion in the 1st quarter of next year…
KAM has been moving off strong support around the 60-cent area…note how the RSI(14) on this 2.5-year weekly chart found support at the 30% level, while the SS indicator appears ready for a breakout above 20%…
KAM is unchanged at 70 cents as of 9:30 am Pacific…
Note: John and Jon both hold share positions in GGI. John also holds a share position in EQT.
HMK.C on the move.
Comment by BigRig — August 19, 2015 @ 8:51 am
GGI – .075’s printing
Comment by dave — August 19, 2015 @ 8:56 am
I am cautiously optimistic that things are slowly turning around. I still think we will see one big smackdown in the gold price, bringing it to under $1000. I still believe that will happen before November. We’ll have to wait and see on that. Regarding stocks, I think most of them have either bottomed or just about to. Most of the weak hands have left the building. I think next year is going to be our turn to bask in the sunshine.
Comment by chris — August 19, 2015 @ 9:48 am
I agree Chris on 2016 bringing back the BULL.
Here is the situation on EQT. The likely hood of it dropping to or below .11 is going to be rare. Maybe .11 max. They can close the flow through in advance of the smaller financing, but most likely Kyler will wait, so monday or Tuesday next week. Hope this helps anyone thinking of accumulating.
Comment by dave — August 19, 2015 @ 10:15 am
Also, Its no secret, I’m sure everyone knows EQT has a news release to put out. They want to close the PP first, otherwise its like putting the cart before the horse. Things light up next week.
Comment by dave — August 19, 2015 @ 10:19 am
ok gents, here’s another one for ya – EQT vs PE?
Comment by Paul — August 19, 2015 @ 11:30 am
Paul – That is a good one for sure. No arguments on PE, it is a very good stock to own some shares. It’s progression is farther along than EQT. What one looks at is the price of the stock and how far it has to go to become a double first off, EQT will be easier to surge to .22 to .23 than Pe will to be to .85. It will happen quicker with the circumstances at hand. This of coarse is just how I look at it. Owning both is smart, but for me personally, I would have a greater percentage in EQT, but I am sure that everyone has different investment ideas and that is what makes the world go round. IF EQT makes a big discovery, it passes PE like lightning.
Comment by dave — August 19, 2015 @ 12:18 pm
Dave – if they a NR that is material they cant wait to put it out to benefit the PP.. against the rules… if it isnt material then it shouldnt affect anything
Comment by Jeremy — August 19, 2015 @ 1:30 pm
dave, I will disagree with you about EQT doubling before GGI. I love the way GGI is trading right now, gradually moving higher, selling has really slowed down which is understandable. GGI was way oversold and should be an easy double with any kind of further good news. I think EQT has already moved up somewhat on hype and I really don’t think we will see .20 before drilling starts but I could be wrong. I think people will be quick to take profit on any move up as it is still a speculative play. I own both so I hope they both double but I own a lot more GGI, safer play, more irons in the fire. I won’t complain however if you are right though.
Comment by Danny — August 19, 2015 @ 2:45 pm
Jeremy, it could be they want to announce the drill rig is en-route or being prepared to drill. Nothing material about that. Lots of companies are drilling up to a week sometimes, before it is announced.
Comment by Dan — August 19, 2015 @ 2:56 pm
Jon, maybe you know the answer to this. Came across another situation where insider trades show up on TMX Money but not later on SEDI (not for a stock currently discussed on this site). I think this was discussed here previously perhaps for GGI or another stock and there was a logical explanation why it was marked as insider on TMX money but not later on SEDI. Can anybody remember what the explanation was? Thanks
Comment by Danny — August 19, 2015 @ 2:57 pm
Jon in 2013, GGI run a precise aeromag Survey on grizzly west, you told me that they did the same on grizzly central about one mounth ago, are you sure about this as it is so important data for drill plans.
Comment by Martin — August 19, 2015 @ 4:36 pm
Martin, just to be clear, I mentioned about a month ago that there is quite an amount of data (aeromag, geochemical) that had already been accumulated on Grizzly Central entering this year….we know they were on the ground at Grizzly as early as late February, and that was most likely Grizzly Central because other areas would have been more difficult to access at that time of the year…it’s quite clear to me from GGI’s news last Friday that they’ve decided, in all likelihood, to drill Grizzly Central and the work they’re conducting now is to nail down the final target area there….of course they’re also investigating the high-grade Golden Bear showing further south…..
Comment by Jon - BMR — August 19, 2015 @ 4:47 pm
Those newly acquired claims look like a Mirror of the Hat, can’T wait to see them drilling, after all this waiting. Also, since there is mineralisation at star and the hat, Hat east should be no different everything is pretty much fracture there to. We need a starter pit hope GGI will deliver!!
Comment by Martin — August 19, 2015 @ 5:01 pm
Grizzly could be split between about six junior and still there would be work for every one!
Comment by Martin — August 19, 2015 @ 5:06 pm
Martin, a drll hole hit at Grizzly Central would make last year’s move in the stock look like a tea party. It would prove that this is one hugely pregnant district. Lots of conjecture about what’s underneath Grizzly Central. The drill bit will be the truth machine but the odds are unusually good IMHO given the known signatures and the district hit ratio. Keep in mind—–50 holes drilled at Hat and Star combined the last 2 years. There are certain signatures that deliver excellent drill results in this district. Great advantage for Garibaldi.
Comment by Jon - BMR — August 19, 2015 @ 5:13 pm
This will get crazy once they announce drilling Jon!
Comment by Martin — August 19, 2015 @ 5:18 pm
Beyond crazy, Martin, given all that has occurred since May 21. Upcoming drilling in the district, at Hat and Grizzly, will attract national attention.
Comment by Jon - BMR — August 19, 2015 @ 6:19 pm
Jeremy – Dan had it right. Not material yet. Waiting for pp to close.
Comment by dave — August 19, 2015 @ 7:00 pm
DBV – Patiently waiting for Farshad to address the shareholders …. hopefully some positive news this week to get us over the .17 cent level when the blockade went up.
Comment by vepper — August 19, 2015 @ 7:32 pm
Upcoming drilling at the Hat and Grizzly would be great Jon, still waiting for DBV to stir up some news…fingers crossed we don’t have to wait much longer.
Comment by Steve A. — August 19, 2015 @ 7:56 pm
DBV May possibly be waiting for September. If they drilled in August, Chad Norman Day would lose face. “The company promised to cease exploration activities this summer.”
Comment by Concerned Citizen — August 20, 2015 @ 5:01 am
Of course Chad also said Doubleview has completely filled the creeks with timber, so we know what to make of his public statements…
Comment by Jon - BMR — August 20, 2015 @ 5:05 am
Doubleview understood the message and quickly sent their workers home. They also made verbal commitments to stop work this summer until the Tahltan Nation and the Province are able to negotiate solutions for managing development in Tahltan territory.
Concened Citizen you forget”until the Tahltan Nation and the province are able to negotiate” …..and now with the news of last friday by GGI we know that we have negotiation.
My opinion is we have development next week or first week of September but this is only my opinion !
Comment by Guy Delisle — August 20, 2015 @ 5:28 am
Yup. Chad Day was caught in the act of spinning (by you guys). lol
Comment by Concerned Citizen — August 20, 2015 @ 5:41 am
Garibaldi inching up nicely. Makes you wonder what will happen when they release good news. Stock feels like a coiled spring and they have several possibilities of good news to come.
Comment by Tom UK — August 20, 2015 @ 5:44 am
Dan/Dave.. understood:)
Comment by Jeremy — August 20, 2015 @ 5:48 am
Jon, Pure Energy (PE) ** HALTED ** after 20 minutes of trading today and after an early morning news release. The suspense is too much!
Comment by vepper — August 20, 2015 @ 5:50 am
Awesome news, Vepper…though the company many have to had some language qualifiers to please the regulatory authorities…we’ll see…hence the reason for the halt…they don’t have a Preliminary Economic Assessment yet, so throwing numbers around at this stage can get a little tricky…
Comment by Jon - BMR — August 20, 2015 @ 5:57 am
Ske results
Comment by Tombc — August 20, 2015 @ 6:06 am
Very good start for Skeena…and at least 54 more holes to come…this will move higher and demonstrates it’s a robust gold system…look at the regional map….you can draw a line straight from Spectrum, through the southern portion of the Grizzly 75 km to the northwest, to the high-grade Golden Bear mine…interesting. 150+ g Gold showing on an access road at GGI’s Grizzly southern extension claims.
Comment by Jon - BMR — August 20, 2015 @ 6:20 am
PE is looking good, looks like they filled that gap too.
Comment by dave — August 20, 2015 @ 6:42 am
Guy Delisle… nice catch.
On another topic, Alexis Tsipras is resigning this evening. Greek elections in September (13th or 20th). It’s a calculated gamble to reshuffle his government, he’s leading in the polls. He’ll surely get re-elected.
Just in case anyone cared anymore about the Greek drama.
Comment by Concerned Citizen — August 20, 2015 @ 6:51 am
good morning bmr boys I bring you thr latest press release from HERON RESOURCES(HER TEXCH) augs 20 2015 ” HERON INVESTOR GREENSTONE NOW HOLDS 13.04% of shares” regrds walter emond
Comment by walter emond — August 20, 2015 @ 7:22 am
It looks like there was a little shake out on GGI this morning. Perhaps this is a good thing.
Comment by Andrew — August 20, 2015 @ 7:37 am
Gold above $1150, will it carry on upwards?
Comment by Tom UK — August 20, 2015 @ 8:41 am