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It’s an abbreviated and early edition of Morning Musings today (pre-market open) due to travel commitments…Gold got smacked a bit yesterday, not surprisingly given its record 11-session winning streak…traders were looking for any reason to lock in some profits and they got it when President Obama started talking optimistically about a potential debt reduction deal after a bi-partisan group in the Senate put forth a debt plan…with elections just over a year away, and the debt ceiling issue front and centre at the moment with an early August deadline for action, what we’re seeing in Washington right now is political gamesmanship at its finest…the U.S. will find a way, and perhaps a very creative one, to avoid a default but a “big deal” on debt reduction is about as likely as a late July snowstorm in New York, especially with Obama insisting on revenue increases…House Republicans who agree to raise taxes of any sort will have a tough time with their base in 2012 – the Tea Party will make sure of it…Gold, which has been holding steady in the early overnight hours around $1,590, is in a Perfect Storm because there are so many factors supporting it, fundamentally and technically…physical buying remains strong and we’re about to enter the time of year when that buying begins to intensify, beginning with the Muslim holy month of Ramadan which starts in August and ends with generous gift-giving in September…some Gold stocks have made a nice run recently (the TSX Gold Index is up 8% over the last three weeks even after yesterday’s drop) but the reality is, Gold stocks in general are still ridiculously cheap relative to the underlying metal…just one classic example is one of our favorite smaller producers, Richmont Mines (RIC, TSX), which is trading at just eight to 10 times anticipated 2011 earnings after closing yesterday at $7.80…any weakness in the CDNX has to be viewed as an early Christmas gift…the Index got as high as 2010 yesterday on relatively light volume but weakened throughout the day as Gold took a $20 hit…the Index closed at 1993, slightly above its 10-day moving average (SMA), for a loss of 11 points…our view is that we’re in the early stages of a major upside move in the CDNX and John’s updated chart re-confirms that…check it out carefully…

In major uptrends, the CDNX will typically find support at its rising 10 and 20-day moving averages, so those are also important areas to keep an eye on – we saw an excellent example of that last week…the 50-day SMA appears poised to reverse to the upside by late next week or very early August, providing additional confirmation that a bullish new move in the Index is underway…one of our favorite plays under 25 cents is Currie Rose Resources (CUI, TSX-V) which is currently three weeks into a 10,000-metre drill campaign in the prolific Lake Victoria Greenstone Belt of Tanzania…the other day we had a brief conversation with Mike Griffiths, CUI’s senior geologist, who was just at Mabale Hills where drilling is proceeding on schedule…Currie Rose is drilling deeper at Sisu River than it did late last year, underneath encouraging intercepts that were discovered in Phase 1…so the RC rig is testing for the potential of wider zones and higher grade material at vertical depths up to 150 metres…other deposits in Tanzania have shown similar near-surface expressions as Sisu River, so there is certainly reason for optimism…Currie Rose is going after targets at three properties at Mabale Hills – Sisu River, Mwamazengo and Dhahabu – and we can’t help but think the odds of a hit at one of those areas at least is very good…then of course there’s the Sekenke Project, about 200 kilometres to the southeast, and Griffiths is very excited about the possibilities there…Sekenke is a large land package that surrounds and runs in between two former high grade mines (from the first half of the 20th century), a recipe for a discovery as a lot was probably overlooked in the area…Currie Rose has never drilled Sekenke before…they have so many potential drill targets at this property, they have the pleasant problem of trying to prioritize them…they can do that while drilling continues at Mabale Hills…we’re hoping to do an interview with Griffiths sometime next week…technically, Currie Rose is looking solid and the stock was definitely under accumulation yesterday as over a million shares traded on the Venture and Alpha markets combined…a breakout this summer through resistance at 22.5 cents seems inevitable just given the fact that interest and speculation should build regarding the drill program, the most ambitious ever for CUI in Tanzania…below, John updates the CUI chart which shows the stock is trading in a bullish ascending triangle…the weekly(50) has also crossed above the weekly(200) which is also bullish…

Note: Both Jon and John continue to hold positions in Currie Rose Resources…