Gold got hurt by the stronger-than-expected U.S. February jobs number this morning but has staged an important reversal…as of 7:10 am Pacific, bullion is now up $2 an ounce at $1,581 after dipping as low as $1,560…Silver fell briefly below $28.50 but is now 31 cents higher at $29.19…Copper is flat at $3.51…Crude Oil is unchanged at $91.54 while the U.S. Dollar Index has surged nearly three-quarters of a point to 82.75…
Gold Bears Growing In Number – Good Sign
Nomura is the latest bank to turn bearish on Gold, another sign the downturn in bullion is likely nearing an end…”For the first time since 2008, in our view, the investment environment for Gold is deteriorating as economic recovery, rising interest rates and still benign Western inflation (for now) will likely leave some investors rethinking their cumulative $240 billion investment in Gold over the past four years,” wrote Nomura analysts in a sector note yesterday…even more interesting were comments from Societe Generale analysts Jesper Dannesboe and Robin Bhar in a report on commodity strategy yesterday…”The Gold price is in bubble territory and the sufficient conditions for a burst are coming into place,” they warned…we’ll examine those comments in detail in the coming days…
U.S. Economy Picks Up Steam With Strong February Jobs Number
U.S. job creation broke out in February, with the economy creating a net 236,000 new jobs as the unemployment rate fell to 7.7%…economists were expecting around 160,000 new jobs in February with the unemployment rate holding steady at 7.9%…private job creation stood at a robust 246,000, finally indicating that the economy may be ready to escape the tight growth range in which it has been held since the financial crisis…service industries led the gains with 73,000 new jobs, while construction added 48,000 and health care provided 32,000…
China’s Exports Stronger Than Expected
China’s trade figures for February revealed signs of a steady recovery in the world’s second-largest economy…trade surplus and exports came in stronger than estimated forecasts but imports slumped 15% from a year earlier…looking at the first two months of 2013 compared to the same period last year, which helps smooth out distortions from the Chinese Lunar New Year holiday, export and import growth held up reasonably well…exports were up 23.6% while imports were up 5%…many analysts expect the country to improve on last year’s 7.8% growth on the back of stronger domestic investment and consumption…China is not as reliant on export growth as it used to be…
China Expresses Fresh Concerns About “Competitive Currency Depreciation”
Beijing has issued a new warning against competitive devaluations by rich countries, saying that emerging markets will pay the price for so-called currency wars…“For the global economy this year, I am worried about inflation, about competitive currency depreciation and about the negative spillover effects of excessive issuance of the main currencies,” commerce minister Chen Deming said today…he was speaking at the National People’s Congress, China’s rubber-stamp parliament…
Today’s Markets
Another day, another new record high for the Dow…as of 7:10 am Pacific, the Dow is up 21 points to 14350 (it rocketed as high as 14413 in very early trading) as investors are cheering the jobs report…the Wall Street Journal reported this morning that U.S. companies are showering investors with a record windfall in the form of dividends and share buybacks, helping to propel the stock market’s rally…companies in the S&P 500 Index are expected to pay at least $300 billion in dividends in 2013, according to S&P Dow Jones Indices, which would top last year’s $282 billion…American corporations also announced plans to buy back $117.8 billion of their own shares in February, the highest monthly total in records dating back to 1985, according to Birinyi Associates Inc. a Westport, Conn.-based market research firm…the TSX is up 10 points while the Venture is relatively unchanged at 1115 through the first 40 minutes of trading…Asian markets were mostly higher overnight with Japan’s Nikkei average hitting a new 4.5-year high, climbing 2.6% to close at 12284…China’s Shanghai Composite was off 5 points to finish the week at 2319…European shares are up significantly thanks to the strong U.S. non-farm payrolls report…Conn.-based market research firm…
High-Grade Mineralization Extended At Monster Lake
TomaGold Corp. (LOT, TSX-V) and Quinto Real Capital (QIT, TSX-V) released results from six more holes this morning at their “325 Zone” Monster Lake discovery near Chibougamau, Quebec, and drilling along two new sections (100 metres apart) shows the high-grade zone remains open along strike and at depth…highlights from holes M-13-96 to M-13-101 include 26 g/t Au over 5.7 metres in M-13-98 at a vertical depth of 280 metres; 32.6 g/t Au over 6 metres in M-13-99 at a vertical depth of 170 metres; and 48.9 g/t Au over 3.5 metres in M-13-101 at a vertical depth of 275 metres…all holes drilled to date in this phase (9 in total) have been reported with drilling resuming early next week (following Spring Break in Quebec) according to a TomaGold representative we spoke to this morning…it’ll be interesting to see how this plays out with some deeper holes – that will be the real test…promising results so far, but much more drilling is going to be required…QIT has an option to earn up to a 70% interest in the project…the stocks have responded well to the news with LOT gaining 7 cents to 38.5 cents while QIT has climbed 22 cents to 86 cents…
Additional Producer Charts
With a bottom believed to be forming in bullion, this morning we’re taking a technical look at three additional producers worthy of our readers’ due diligence at this particular time…recently, we highlighted New Gold Inc. (NGD, TSX-V) which we believe is one of the best-run companies in the industry…
Goldcorp Inc. (G, TSX)
Yamana Gold Inc. (YRI, TSX)
St. Andrew Goldfields (SAS, TSX)
Note: John, Jon and Terry do not hold positions in G, YRI or SAS.
kitco.com/reports/KitcoNews20130308JW_update.html
NICE REBOUND! LOT/NCR/QIT FLYING TODAY ON HEAVY VOLUMES…..VENTURE STABLE LAST FEW DAYS…..
Comment by STEVEN — March 8, 2013 @ 7:20 am
John/Jon: isn’t VGD in the area play??? cheap at 2 cents then? please update…
vanstarmining.com/#!vanstar-mining-project/vstc14=littlemonstermaps/vstc13=page-2/photostackergallery1=0
Comment by STEVEN — March 8, 2013 @ 7:21 am
Jon, can you explain why v.QIT goes through the roof on excellent drill results, yet v.RBW has good assay results and doesn’t even budge? Is there something QIT has that RBW does not? Is it perception, manipulation or simply fair market valuation of those results and/or company?
Comment by Steven — March 8, 2013 @ 7:27 am
Steven, good point….of course one important difference is the fact QIT/LOT released their first results and were still drilling……which leaves plenty of room for further speculation and growing interest…….the timing on Gold Viking wasn’t as good for RBW which also had just come off disappointing results from the International……RBW’s turn will come with Gold Viking as there’s an excellent opportunity for an important discovery there…….it’ll be interesting to see how QIT and LOT plan their next phase of holes which begin next week……right now the market cap for that play is pretty healthy at just under $40 million, if you add in the 10 million shares from the recent QIT 40-cent debenture…..if the mineralization extends and gets richer at depth, then Monster Lake could really heat up……will be lots of volatility……
Comment by Jon - BMR — March 8, 2013 @ 8:34 am
steve, reason is rbw released crappy results
Comment by sean — March 8, 2013 @ 10:34 am
LOT and QIT… day trade effect. For future outlook, it will go to challenge its historic high. I am holding a portfolio since Monday before trading halted. RBW, I cut loss at 12 cents with my average cost at 15 cents… GBB seems to be done also as there are intense pressure in selling. GQC appears to go/stay below 40 cents soon.
Comment by Theodore — March 8, 2013 @ 1:33 pm
Gotta love the disrespect QIT is getting from the market…7 million M/C for their 50% stake in Monster Lake. Brutal…Im sure next week will be better as many took the volume as an opportunity to take some profits…
Comment by db — March 8, 2013 @ 3:43 pm
Interesting company profiled on Smartstox yesterday.HBK .V.Anyone else happen to watch it?
Comment by Greg j — March 8, 2013 @ 4:33 pm
Venture looking to rebound? A few technical tools are indicating the Vent may start turning to the upside. The MACD (very reliable) looks like its about to turn positive; RSI (14) is at 32 and pointing up; Selling pressure is really tapering off; SSO has now turned positive. Let’s see what next week brings, but it looks like the venture may have put in a bottom….for now…
Comment by Tony T — March 9, 2013 @ 11:14 am
Theodore took a position just before the halt. Just like clock work!!! Pure comic relief, outstanding work Theodore, simply brilliant. Encore encore!!!!!!
Comment by Heath — March 9, 2013 @ 11:37 am
Also Theodore I have the post where you said on two different occasions that ur average rbw was 19 and 22 cents. I’ll cut you some slack though as I can well imagine that one has trouble keeping things straight when it’s one lie after another. That’s the problem when you put it in writing on record eh chief?
Comment by Heath — March 9, 2013 @ 11:41 am
Hi BMR,
What do you guys think about getting into RIC at these levels? Pretty much given back nearly all the gains it’s seen in the past 3 years and some more.
Do you think this should sink lower for patient investors bottom fishing? I have to think this can double in a blink of an eye once they get themselves back in order.
Thoughts please.
Comment by Calvin — March 9, 2013 @ 3:06 pm
O.K. since you provide no answer as to why the interview with Andre Audet has never been posted can you please let us know what you presently think of Everton Resources. Management said drilling would start in March at Opinaca and also in the D.R. Do you have any better information?
Comment by George — March 9, 2013 @ 6:19 pm
Calvin, interesting you brought this up as I’ve been thinking about RIC over the weekend. They’re definitely making some progress with the Island Gold Mine in terms of finding new resources there, and the grades are impressive. RIC had a horrible 2012, but I believe all the bad news is out of the way. The company has basically no debt, about $55 million in cash, a book value of $3 a share, and it’s trading for around $2.50. If you believe that the bottom for Gold is around $1,500, and that we’re going to see significantly higher gold prices over the next couple of years, then I would say RIC is a steal at current prices if you’re a long-term investor. Keep in mind it went up more than 10-fold after the Crash of 2008. It could do so again. We’ll have more on RIC in the week ahead.
Comment by Jon - BMR — March 10, 2013 @ 8:09 am
Hi George, the interview with Andre hasn’t been posted because it hasn’t occurred yet. I had arranged with Andre to do an interview with him at the Resource Show in Vancouver. Unfortunately, as often occurs during these busy shows, he got pulled in 10 different directions and at the last minute wasn’t available to do the interview. We agreed to do it later – don’t know exactly when, but at the earliest opportunity. I last spoke with Andre a few weeks ago. Not sure about their drilling plans but I’ll try to get an update on that this week.
Comment by Jon - BMR — March 10, 2013 @ 8:13 am
@Heath, you are right… but when your stock is not performing, you have to cut loss. Most people do not want to cut loss, GBB is one great example, there are so many people still holding at 50, 60 and 70 cents level. Now, it is only 6.5 cents…. with so many shares outstanding, I am sure that there will be a reverse split soon. I bought this stock at 6 cents years ago but now, it is more or less the same. I am still a loser.
Comment by Theodore — March 10, 2013 @ 12:37 pm
Thanks for the input on RIC bmr – certainly helps to keep RIC on the radar.
To be honest, I’ve seriously considered going heavy on IAMGOLD, a stock that’s gone from nearly $17 to $6 and change, some of it attributable to the general gold market and some for operational reasons. Either way, it carries a book value of a bit over $9/share, which is 40% upside from current levels. While RIC looks attractive, a giant like IAG is a much safer and doesn’t solely trade on gold price. I know these boards cover small caps and ventures, can you comment IAG that has an avg. price target in the double digits?
Do you think these stocks being intentionally set up for 4 year lows only to be picked up at these levels for massive gains in the coming year or two?
Comment by Calvin — March 10, 2013 @ 1:16 pm