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Gold is testing a support zone between $1,440 and $1.450 today…as of 7:05 am Pacific, bullion is down $25 an ounce at $1,445…Silver is off 54 cents at $23.50…Copper has slipped 3 pennies to $3.26…Crude Oil is down 28 cents at $95.88 while the U.S. Dollar Index has fallen one-quarter of a point to 82.14…

Gold imports by China from Hong Kong more than doubled to an all-time high in March as buyers in the biggest consumer after India boosted purchases, underscoring increased bullion demand in the world’s second-largest economy…mainland buyers purchased 223.52 metric tons, including scrap, compared with 97.1 metric tons in February, according to data from the Hong Kong government today…net imports by the mainland, after deducting flows from China into Hong Kong, were 130 metric tons compared with 60.9 metric tons a month earlier, according to Bloomberg calculations…the shipments preceded Gold’s record plunge month which led to a surge in demand for jewelry, coins and bars from India and the U.S to China…separate data today showed China’s Gold consumption rose 26% in the first quarter as prices fell…“This is quite out of expectation as all these imports were done before the market slump in April,”  Bloomberg quoted Qu Mingyu, a trader at Bank of China, one of the country’s three largest bullion banks…“Judging from the explosive growth of trading volume on the Shanghai Gold Exchange in the second half of April, and anecdotes that many jewelry shops are sold out throughout the country, imports might be even more substantial in April”…

Australia Cuts Rates To Record Low

The Reserve Bank of Australia has cut its benchmark cash rate to a record low, in a renewed attempt to boost activity outside of the resource sector and soften the impact of a strong domestic currency on trade-exposed industries…in a move that surprised economists, the RBA opted to reduce its cash rate by 25 basis points to 2.75%, highlighting the persistent strength of the Australian dollar over the past 18 months and subdued demand for credit as the reasons for its move…“The Board has previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand”, RBA governor Glenn Stevens said in his post-meeting statement…

The Stupidity Of Governments

As investors, our biggest obstacle when it comes to trying to make money on our investments is government in general and the often ridiculous policies many jurisdictions implement, particularly in this era of resource nationalism and hyper-eco-activism…in Quebec, which used to be a shining example to the world in terms of how a government should structure resource development policy, the separatists and socialists now holding provincial power (thankfully the PQ only has a minority) are imposing minimum royalty payments and other higher taxes during one of the worst slumps the industry has ever witnessed…the PQ actually stated yesterday that it had to “scale down” its tax-hike plans – just imagine what will happen when commodity prices actually start taking off again if these idiots are still in power…the government estimates that the proposals announced yesterday would boost total mining taxes in 2015 by a relatively “modest” 15.6%…since when is a 15% tax increase modest?…and what other silly measures are they going to introduce as they pander to Quebec’s radical environmental movement?…exploration and resource development, while it will never die in Quebec, will begin to shift noticeably to Ontario if the Hudak Conservatives are able to gain power there, not unlike the situation in western Canada several years ago when the Alberta government (“Progressive” Conservatives) increased royalties for the oil and gas sector and neighboring Saskatchewan reaped all the benefits…capital is timid…as soon as it knows it’s not welcome in a particular jurisdiction, it quickly heads somewhere else where the welcome mat is out…

Crude Oil – Awareness Chart Update

It’s probably safe to say that a big move is coming in Crude Oil in the near future – the question is, will the move be up or down?…below is a 10-year monthly WTIC chart from John, an update to one he did recently…Crude has been trading in a 4-year symmetrical triangle and “decision time” is drawing near though it’s not necessarily imminent, as you can see from the apex…April trading tested support…now the price is close to resistance…the coming weeks and months will be interesting…global economic weakness – in particular, a continued slowdown in China – could knock Crude lower, while some unforeseen developments in the Middle East could be a trigger for a breakout to the upside…

Today’s Markets

A weak yen sent Tokyo stocks to their highest level in almost five years overnight…Japan’s benchmark Nikkei Index re-opened after a long weekend to surge past 14000 as currency moves and earnings drove momentum…the Index climbed a whopping 486 points or 3.6% to close at 14180…China’s Shanghai Composite was much more subdued, gaining just 4 points to close at 2236…European shares are modestly higher in late trading overseas…ECB chief Mario Draghi departed from a prepared speech in Rome late today to say that the central bank would watch data closely and is prepared, if necessary, to cut interest rates further, including the deposit rate which is currently at zero, on more signs of economic weakness…”We will watch all the incoming data on the euro-area economy in the next weeks and if necessary we’ll be ready to take further action,” he stated…the prospect of deposit rates in the euro area moving into negative territory pushed the euro lower today…the Dow is up 32 points through the first 30 minutes of trading to 15001…the TSX is 23 points higher at 12477 while the Venture is off a point at 966…Colorado Resources (CXO, TSX-V), after climbing 42 cents or 61% over 3 trading sessions, is off a nickel at $1.06…Victory Ventures (VVN, TSX-V) overcame important resistance at 9 cents yesterday, reaching an intra-day high of 13 cents on strong volume before closing up 2 pennies at 10.5 cents…it’s off a penny-and-a-half to 9 cents in early trading this morning…

Firesteel Resources (FTR, TSX-V)

Another company to keep an eye on in the Iskut River area is Firesteel Resources (FTR, TSX-V)…they hold a significant land position including a possible extension of Colorado’s potential North ROK deposit…the company hasn’t made any announcements since Colorado’s discovery, and they’ll need to raise some money to carry out any intended exploration, but one gets the sense they’re probably up to something based on the action in the stock since April 25…it would be foolish of them not to exploit the opportunity, and it appears they do have a good package of properties…technically, FTR is currently in a zone of strong resistance between 15 and 18 cents, so investors need to be aware of that…FTR may need to consolidate for a short period before possibly overcoming resistance…keep on a “Watch List”…

Prosper Gold (PGX.H) announced this morning that it has entered entered into a letter of intent with Firesteel to acquire an 80% interest in the Copper Creek property in northwest British Columbia…the proposed transaction would constitute Prosper’s qualifying transaction…keep an eye on Prosper…its President and CEO is Peter Bernier of Richfield Ventures‘ fame, and joining him is renowned geologist Dirk Tempelman-Kluit who was also instrumental in the Blackwater discovery and Richfield’s success…

Special Situation Update – Global Met Coal Corp. (GMZ, TSX-V)

Last week, we brought to the attention of our readers this little-known company trading between 4.5 cents and a nickel that has the potential to produce significantly more in revenue this year than its current market cap which is a paltry $2..3 million, brought down by the February-March-April weakness in the Venture…the sense of urgency with this situation has grown in recent days with the company announcing last Friday that it has arranged a $600,000 financing…this could be the last financing GMZ will have to complete for quite some time given the nature of the Black Creek met coal project in Alabama and how it should start filling the company’s coffers this summer…we don’t have to tell you how much of an advantage it is for a junior resource company in the current market environment to be able to generate consistent cash flow…what also excites us about Black Creek is the apparent simplicity of the operation – premium metallurgical coal (a vital ingredient in the steel making process) near-surface and within 20 miles of two of the largest coking facilities in the United States…Alabama is a resource-friendly state that mines nearly 20 million tons of coal annually and employs nearly 10,000 people in the industry…Global Met’s permit application with the state has successfully passed through several reviews and the final okay is expected shortly…the company has already stated that it expects to be in production within about a month after receiving the permit, which helps explain the current financing to ensure this process can flow smoothly…Chairman, CEO and President George Heard has successful previous experience in bringing situations like this into production – he has managed projects in the U.S., Canada, Mexico, Brazil, Africa and Indonesia, and he is intimately familiar with Alabama…he anticipates a predictable operating margin with Black Creek given a fixed selling price (they have a buyer lined up) while the actual mining will be contracted out at a fixed cost…GMZ closed a 4.5 cents yesterday, right at the rising 10-day moving average (SMA)…the recent breakout above resistance at 4 cents was encouraging, and the chart is starting to look a lot more favorable – consistent with the company’s prospects on the ground…as always, perform your own due diligence…we’ll have more on GMZ by early next week…

Covus Gold Inc. (KOR, TSX) Starts Drilling At North Bullfrog

Corvus Gold Inc. (KOR, TSX) has commenced a Phase 1, 20,000-metre drill program at its North Bullfrog Property in Nevada where it will try to expand the recently discovered Yellow Jacket high-grade zone…the weak Gold market has knocked Corvus down sharply from nearly $2 a share late last year…the stock closed yesterday at 63 cents, but it’s certainly one to keep on the “Watch List”…

Probe Mines Ltd. (PRB, TSX-V)

Another one for the “Watch List” is Probe Mines (PRB, TSX-V) which is currently building on a significant resource at its Borden Lake Project in northern Ontario…more drill results should be on the way shortly, as well, from an intriguing high-grade area that has excellent potential for expansion…

Discovery Ventures Inc. (DVN, TSX-V)

Discovery Ventures (DVN, TSX-V) has recently regained momentum after slipping as low as 14.5 cents in April…DVN closed at 23 cents yesterday, slightly above its 50-day moving average (SMA) which ntinues to decline but is beginning to flatten out…the “sweet spot” from an entry standpoint is just before that 50-day reverses to the upside which could be within the next month or so…below is a 2.5-year weekly chart from John…note the EMA(20) resistance at 24 cents and Fib. resistance at 27 cents…this is a critical zone for DVN to clear from a technical perspective…higher prices should follow if it’s able to clear that zone…

Note: John., Jon and Terry do not hold positions in FTR, KOR, PRB or DVN.  Jon holds share positions in VVN and GMZ.