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Gold has traded in a narrow range between $1,612 and $1,621 so far today…as of 6:10 am Pacific, the yellow metal is down $5 an ounce at $1,613….Silver is 9 pennies higher at $28.35…Copper is flat at $3.34…Crude Oil is up 23 cents at $84.21 while the U.S. Dollar Index has gained nearly half a point to 82.93…

Today’s Markets

Asian markets were up modestly overnight while European shares are mostly lower this morning as investors continue to evaluate the euro zone crisis and weigh the uncertain prospects of decisive stimulus steps from G7 policymakers…Spanish troubles returned to the fore after Treasury minister Cristobal Montoro said the euro zone’s fourth biggest economy was shut out of the credit markets…stock index futures in New York as of 6:10 am Pacific are pointing to a slightly higher open on Wall Street…

Finance ministers and central bank governors from the Group of Seven leading industrial nations are holding a conference call today to discuss the financial crisis in the euro zone and its implications for the global economy…the conversation is likely to see renewed pressure from the U.S., Canada and Japan for action from euro zone countries to finance the recapitalization of weaker banks, and increase their firewall to prevent any contagion within the European currency union…

Euro Zone Private Sector Activity Slows

Private sector activity across the 17-nation euro zone contracted at its fastest pace in three years last month, according to the final May reading of the Markit euro zone composite purchasing managers’ index (PMI) released today…composite PMI fell to 46.0, up slightly from a preliminary reading of 45.9, but down from 46.7 in April… the final May services PMI reading fell to 46.7 from 46.9 in April…a reading of less than 50 indicates a contraction in activity…

“Based on these numbers, it would not be surprising to see GDP for the region contract by 0.5% in the second quarter, though an even steeper decline could be seen if the June data disappoint,” said Chris Williamson, chief economist at Markit…

U.S. Dollar Chart

The U.S. Dollar Index, which may have made an important intra-day reversal last Friday, is up significantly this morning but has a strong resistance band to overcome between83 and 83.56…a near-term consolidation definitely seems to be in the cards as the greenback needs to step back and catch its breath after a powerful run over the last several weeks…this bodes well for Gold which should be able to resume its climb after a brief rest following Friday’s huge jump…

Venture Exchange

The Venture gave up 13 points yesterday but on very low volume, and the Index also stayed within a support band as it closed at 1278…below are a couple of charts from John (the second one is for one of our readers who posed a question to John yesterday)…

CDNX Chart #1

CDNX Chart #2

GoldQuest Mining (GQC, TSX-V)

Jon interviewed GoldQuest Chairman Bill Fisher for nearly 30 minutes yesterday at the Vancouver Resource Conference – Fisher’s first interview since the company’s May 23 announcement of a potential major discovery at its Las Tres Palmas Project in the Dominican Republic (231 metres grading 2.4 g/t Au and 0.44% Cu)…we’ll be posting that audio interview, perhaps in two parts, over the next couple of days…Fisher, who’s highly respected in the industry, is being very careful not to “over-hype” this hole and GoldQuest has been extremely transparent in its disclosure…he admits, however, “You don’t get holes like this very often…this is probably, as far I can tell, the best drill hole in the world in the last 18 months…this thing could be a big one or it could fizzle out in the next six weeks”…

Here are some excerpts from the interview…Fisher said drilling resumes today at Romero (only the discovery hole in this area has been drilled so far, and it was terminated in mineralization, so the system is open in all directions)…

“All the other deposits in the district are flat-lying…so we’re rather hoping it’s flat-lying…if it’s up on end,  it could be much thinner…but let’s just hope it’s what it looks like to us at this time”…

“We’re going to step out 25 metres in each direction which is only 10% of the length of this hole…so this will give us a sense of geometry…we’d like to think it’s flat-lying but if the thing is, say, at 45 degrees, we’ll find out within the next two to three weeks the orientation of this deposit, whether this very impressive thickness is actually true or that we’ve just drilled down sideways into something…I want to satisfy those basic questions before we start stepping out looking for size…I just want to make sure that geologically we understand what’s going on, and that will help us in making our drill program…we’ve raised some money, we’ll do a short program, and then at that point we’ll announce what the larger program might be”…

“This initial hole is about the same length and grade of contained metals as the discovery hole in Aurelian Resources in Ecuador, and that deposit eventually had the best drill hole in history and was sold to Kinross for $1 billion”…

“What’s striking about the Romero hole, virtually every intersection, every 2 metre intersection, has Gold in it…some of them are much higher but statistically they are well within a single deposit type…we’re not seeing very high grade narrow intervals which you can smear over big areas, and we’ve worked very closely with the TSX market surveillance to make sure they were comfortable we were reporting this correctly”…

On the financing:  “A key thing of it was, there was probably a lot more money available, so we didn’t take all the money off the table…that meant there has been a very substantial after-market”…

Due in part to Fisher’s previous success with Aurelian and GlobeStar (both were bought out), GoldQuest is attracting considerable institutional interest (as well as retail of course) which could help power the stock much higher if future results continue to be very favorable…the discovery is great news for the entire market and shows that even in a down market, companies that make discoveries are going to be rewarded which is why at BMR we’ve focused a lot recently on imminent possibilities in the West Kootenay region (Rainbow Resources, RBW, TSX-V), Nevada and other favorable jurisdictions where some hard-working companies with strong geological teams have great opportunities…as GQC has demonstrated, the potential leverage available to an investor in a good exploration play is incredible…John Kaiser made this point very well at the Vancouver Show – we could be entering a period where some hard work in recent years in the industry pays off with a series of exciting discoveries…

Cadillac Mining (CQX, TSX-V)

Cadillac Mining’s (CQX, TSX-V) GoldStrike Project in Utah has excellent potential, as we have been reporting for over a year, and this was confirmed by initial drill results in late February…accumulation has picked up again in CQX in advance of the next set of results with the stock gaining 9 cents yesterday to close at 24.5 cents…

Below is an updated CQX chart from John…

Note:  John, Jon and Terry do not hold positions in CQX.