BullMarketRun.ca

Gold is off slightly this morning after Friday’s very strong push…as of 5:40 am Pacific, the yellow metal is down $5 an ounce at $1,730…there is resistance around the $1,730 area, so this is where Gold could take a short breather before resuming its upward climb…Silver is 11 cents lower at $33.57…Copper is up another 4 pennies to $3.62…Crude Oil is down 18 cents to $96.24 while the U.S. Dollar Index has regained one-tenth of a point and is trading at 80.34…

John’s calls on Gold and Silver have been remarkably accurate, so bulls have reason to smile brightly and confidently at his latest long-term charts that show much higher levels are in the works for our favorite metals in the months ahead…

Gold

Gold has started a powerful new wave that could have three major impulses to it with the first impulse carrying bullion up to the $1,900 level, right around its all-time high, by year-end…on the four-year monthly chart below, you’ll see that the 5-wave up motive phase that started in 2009 resulted in a doubling of the Gold price in just over two years…the first wave of a new motive phase commenced in the $1,550’s, so ultimately we’re looking for Gold to go well beyond the $2,000 level…RSI(14), currently at 61%, still has plenty of room to move higher…it bottomed and found support just above 50 in May…the +DI indicator has made a significant turn higher for the first time in a year, another very bullish sign…Gold’s move of course won’t be straight up – there will be bumps and minor periods of consolidation along the way, but have faith in the primary trend…fundamentally, several catalysts could trigger this explosive new phase in Gold – aggressive central bank monetary action around the globe, U.S. Dollar weakness, Obama and Democratic success in November’s U.S. elections, geopolitical conflict (Israel-Iran, for example), inflationary pressures, investment demand and the continued strong appetite of the Chinese to grow their Gold reserves…

China’s Gold Imports From Hong Kong Up 345% In 2012

Mainland China’s Gold imports from Hong Kong rose sharply by 98.84% year-on-year to 75.84 metric tons in July this year, according to the latest export data released by Census and Statistics Department of the Hong Kong government (China doesn’t publish such data)…the country exported 38.14 metric tons of Gold to China a year earlier…it was the first rise in China’s Gold imports after three months of slightly lower imports….shipments were a record 103.64 metric tons in April…according to the government data, China’s Gold imports from Hong Kong advanced sharply by 344.87% year-on-year to 458.628 metric tons in the first seven months of this year compared to 103.09 metric tons a year earlier…China, therefore, has imported nearly as much Gold from Hong Kong in the first 210 days of 2012 as the total official holdings of the European Central Bank (502.1 tons)…so it’s rather amusing that China, through the IMF, still wants the world to believe that total Chinese official holdings are just 1040 tons (double the ECB’s) when it has imported half this amount through just the first seven months of this year…

Silver

Silver has also started a powerful new wave and readers will recall how we used this 15-year monthly chart to recently call the bottom in this market around $26…on a short-term chart, Silver is critically overbought and thus requires at least a brief rest in the very near future…however, as you can see in the 15-year monthly chart below, Silver has a lot of room to travel on the upside with a Fibonacci target of $78 (no timeline just yet)…history also shows that it can also remain overbought on the long-term chart for extended periods…quality Silver stocks – producers as well as good exploration plays – could potentially skyrocket…

Soros Tells Germany To “Lead or Leave” The Euro Zone

George Soros has issued a passionate plea to the German government to lead the euro zone out of recession by boosting growth, creating a joint fiscal authority and guaranteeing common bonds, or itself leave the currency union to save the future of Europe…“Lead or leave: this is a legitimate decision for Germany to make,” the billionaire financier and philanthropist said in an interview with the Financial Times…“Either throw in your fate with the rest of Europe, take the risk of sinking or swimming together, or leave the euro, because if you have left, the problems of the euro zone would get better,” he added…”It is entirely dependent on Germany’s attitude…if they insist on a policy of austerity, of reinforcing the current deflationary stance, and they won’t budge from that, then in fact it would even be better for them in the long run (to leave)”…Soros, a strong supporter of European integration but an outspoken critic of Germany’s euro zone crisis management since 2010, praised the latest move by the European Central Bank to return to buying euro zone government bonds as “a more powerful step than the previous ones…it will have an effect,” he said…“It could even lay the groundwork for an eventual solution…But it is a stopgap, not a solution”…

Investment Set To Decline Sharply In Peru’s Mining Industry

Peru’s mining industry will invest 33% less than previously expected next year as social unrest delays projects, according to the country’s National Society of Mining, Petroleum & Energy…miners including Aluminum Corp. of China and HudBay Minerals will invest about $4 billion next year, compared with $6 billion planned previously and down from $7.2 billion this year, according to a presentation by the industry group…“We’re worried by what’s happening,” the group’s President Pedro Martinez said…“If investment continues to be scared away, many mines will reach the end of their productive lives and there will nothing we can do about it,” he added…

Today’s Markets

Asian markets were relatively quiet overnight with China gaining 7 more points to close at 2135 after Friday’s powerful move…China’s exports grew at a slower pace than forecast last month while imports surprisingly fell, underlining weak domestic demand as the global economic outlook dims…other economic indicators released yesterday showed a general slowdown in the Chinese economy had continued into August…data pointed to falling factory output and investment, and slightly rising inflation which could narrow the scope for greater monetary stimulus if it were to become a trend…Chinese fixed asset investment grew strongly in August, underscoring the importance of infrastructure spending to economic growth…weakening trade figures are a major concern for China, where export-oriented industries employ an estimated 200 million people and the economy is already expected to expand at its slowest rate in 13 years…at the start of the year Beijing set a target of 10% growth in overall trade but with year-to-date growth of just 6.2% by the end of August, that target appears to be in jeopardy…

European shares are essentially unchanged this morning…French industrial production was much stronger than expected in July, gaining 0.2% month-on-month vs. an anticipated decline of 0.5%…it’s an important week in Europe with investors focused on Wednesday when the Dutch elections are held, officials from the group of international lenders known as the troika meet in Greece and the German Constitutional Court decides on the legality of the proposed permanent euro zone bailout, the ESM, after 37,000 Germans lodged complaints against the move…the troika have already told the Greek government that its latest budget cuts must be revised…

Stock index futures in New York as of 5:40 am Pacific are pointing toward a slightly negative open on Wall Street after the S&P 500 and the Nasdaq enjoyed their best weeks in three months last week, climbing 2.23% and 2.6% respectively…Friday’s market action, driven by a much lower-than-expected non-farm payrolls number for August, clearly showed that investors are now expecting QE3 from the Fed following this week’s FOMC meeting Wednesday and Thursday…if the past is any indication, Fed action might clear the way for the rally to keep rolling…in 2010, the Dow Jones Industrial Average rose 11% between Bernanke’s late-August hint that another bond-buying program was coming and its November 3 announcement…by the time the Fed program ended in March, 2011, stocks had gained another 11%…

The Venture Exchange has climbed for 5 straight sessions and closed Friday at its highest level in three months, 2177…the 60-day moving average (SMA) is about to reverse to the upside for only the fourth time since the end of the 2008 Crash…the previous occasions were early 2009, the late summer of 2010, and early this year which turned out to be short-lived…

Canadian Dollar Strength Bodes Well For Venture, Commodities

For the past few months we’ve been pointing out the strength in the Canadian Dollar which was telling us that commodity markets were NOT about to collapse in the second half of 2012 as some pundits were suggesting…that strength continues which is also very positive for the Venture Exchange which tends to perform well when the loonie is healthy and the greenback is weak…below is an updated Canadian Dollar chart from John…interestingly, support in 2011 and 2012 held at the 1000-day SMA (in the 95 cent area) which had flattened out but is now steadily rising again…with such a positive outlook for the Canadian Dollar, the greenback appears to be in serious trouble…

Comstock Metals (CSL, TSX-V)

As we stated recently, the key for Comstock Metals (CSL, TSX-V) to keep momentum going was to be able to launch a drill program at its QV Project in the Yukon preferably by sometime in September and that’s exactly what they’ve been able to do…CSL announced the start of drilling late during Friday’s trading session, and the stock responded by climbing 8 cents to 36.5 cents on total volume (all exchanges) of 1.7 million shares…the drilling program is designed to test strong Gold enrichment discovered in trenches at the VG zone, including 3.31 g/t Au over 95 metres from trench QVTR12-06 and 3.77 g/t Au over 45 metres in QVTR12-15…the Gold mineralization occurs within lode quartz-carbonate veins, stockworks and breccias, as well as pyrite veinlets, fractures and disseminations, within a northeast-trending zone of strongly quartz-sercite-carbonate-altered felsic schists and granitic intrusives that has been defined over a minimum strike length of 390 metres, and is open to both the east and west…additional trenching and soil sampling are also being conducted in an effort to more closely define the limits of this Gold anomaly…below is an updated CSL chart from John that shows the stock breaking out after a 3-week consolidation…the 42-cent Fibonacci level is where one can expect some resistance or another pause, but CSL is in all-time high territory and could obviously really erupt if drilling confirms the trenching discovery…this will be an interesting play to watch over the next couple of months…

John has charts on three producers this morning, two that continue to roll right along and another that is trying to emerge from a deep sell-off that was probably overdone…one reason we like New Gold Inc. (NGD, TSX) so much is that the market in our view just hasn’t yet fully caught on to the significance of its growing resources (Gold and Silver) at its Blackwater Project in central British Columbia…readers should perform their own due diligence on this and also check out two Venture plays in the Blackwater district that are also being overlooked at the moment – Parlane Resource Corp. (PPP, TSX-V) and RJK Explorations (RJX.A, TSX-V)…we’ll have more on them later in the week…

Below is an 8-year monthly chart on New Gold that shows the potential for a double from current levels based on Fibonacci analysis…NGD closed Friday at $11.10…the rising 50-day SMA around $10.40 would likely be an excellent entry point on any minor pullback…once NGD clears a resistance band between $12 and $14, look out…

Argonaut Gold (AR, TSX)

Mexico-focused Argonaut Gold (AR, TSX) has been a tremendous performer since its inception nearly three years ago, and appears to have started Wave 1 of a new bullish motive phase…be patient as AR needs to overcome resistance at the $10 level…

Richmont Mines (RIC, TSX-V) took a beating over a 5-month period this year (late February through the end of July) but the selling was overdone as the stock was driven down very close to RIC’s book value…with all the bad news likely behind it (and the news wasn’t horribly bad to begin with), RIC is now on the rebound and higher Gold prices would help this company immensely…

Note: John, Jon and Terry do not hold positions in CSL, NGD, AR or RIC…