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Gold has weakened with this morning’s U.S. jobs report…as of 7:30 am Pacific, bullion is down $28 an ounce at $1,386…Silver is off 52 cents at $22.07…Copper is off 3 pennies at $3.29…Crude Oil is up 81 cents at $95.57 while the U.S. Dollar Index has reversed and is now up one-tenth of a point to 81.69…

Holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, fell 0.3%  to 1,007.74 tonnes yesterday, as outflows resumed after holding steady for nearly a week…holdings are at 4-year lows…weekly sales of Gold held through ETP’s, however, are poised for the second-lowest level since March after the value of holdings slumped by about $45 billion this year…

19 analysts surveyed by Bloomberg expect Gold prices to rise next week, with eight bearish and six neutral, the largest proportion of bulls since March 22…global stocks that rose to the highest since June, 2008, on May 22 reached a 6-week low yesterday amid mounting speculation about whether the Federal Reserve will taper stimulus…the U.S. Dollar Index, a measure against 6 currencies, slipped to its lowest level in 3 months…

The Reserve Bank of India, in its continuing effort to curb Gold imports to address the country’s current account deficit, has banned the import of Gold by domestic consumers through bank credit and has made overseas purchase of the precious metal a cash and carry business…the move is aimed at sharply curtailing the retail jewellery trade in the country…the central bank has also barred Gold importers from using letters of credit from banks for Gold import…how much of an affect these measures will ultimately have on Gold demand from India, after a couple of very robust months, remains to be seen…

U.S. Jobs Report Meets Expectations

The U.S. economy continued to create jobs at a relatively strong pace in May, adding 175,000 positions – though the unemployment rate ticked higher to 7.6%…economists surveyed by Reuters expected 170,000 new non-farm jobs in May, down slightly from the initially reported 165,000 in April, while the unemployment was forecast to hold steady at 7.5%…it’s going to take many months of 200,000+ job growth in order to put a serious dent into the unemployment rate, so it’s hard to imagine the Fed scaling back on its stimulus anytime soon as many are predicting…

Canadian Job Growth Surprises To Upside

The Canadian economy churned out 95,000 jobs last month, much more than expected and mostly in full-time positions in the private sector…the country’s jobless rate also fell to 7.1% in May from 7.2% a month earlier, Statistics Canada said this morning…economists had been expecting about 10,000 new jobs last month…

U.S. Wealth Lost In Recession Returns

The net worth of U.S. households and non-profit organizations – the value of homes, stocks and other assets minus debts and other liabilities – jumped 4.5%, or about $3 trillion, in the first three months of 2013 to $70.349 trillion…that is the highest in nominal terms (tempered of course by inflation) since records began in 1945, according to a Federal Reserve report released yesterday…for the past 5 years, U.S. consumers have struggled to fix their balance sheets from the damage inflicted by the housing crash and recession, which ran from December 2007 through June 2009…now the data suggest that recent stock market gains and a revival in the U.S. housing sector are boosting Americans’ wealth – a trend that over time could make them more inclined to borrow and spend, providing a lift for the overall economy…

Today’s Markets

The Dow is racing higher this morning on the jobs report…through the first hour of trading, the Dow is up 163 points at 15203…the TSX is down 37 points while the Venture Exchange has backed off 2 points to 950…Japan’s Nikkei average closed below the 13000 level for the first time since April, falling 26 points to finish at 12888…the Index hit an intra-day low of 12548 and rallied very late in the session after Japan’s Government Pension Investment Fund (GPIF) announced that it would raise its weighting of domestic stocks to 12% from the current 11% and lower its weighting of Japanese government bonds to 60% form 67%…for the week, the Nikkei was off 6.5%…China’s Shanghai Composite slipped for the 6th consecutive session, falling 31 points to close at 2211…it was off 4% for the week…China will be issuing a slew of economic data over the weekend including inflation, producer prices, fixed-asset investment and industrial output for the month of May…financial markets will be closed, however, from Monday to Wednesday as China celebrates the “Dragon Boat” holiday…European markets are up about 1% in late trading overseas…

U.S. Dollar Index Chart

Currency volatility has been significant this week with the Dollar Index now at a four-week low…resistance is obviously around 84 while strong support exists between 79 and 81 (it reversed just above 81 this morning)…the Index closed sharply lower yesterday at 81.52…it’s important to note that there was a critical trend reversal in the U.S. dollar relative to Gold in October of 2011 (see the bottom of John’s chart) and that trend does remain intact though it has weakened slightly recently…

Colorado Resources (CXO, TSX-V) Update

Yesterday’s plunge in Colorado Resources (CXO, TSX-V) was an over-reaction in our view to drill results that were not spectacular but still very good, and other information included in yesterday’s release points to the clear potential for a very large mineralized system at North ROK…we’ll have more on that Monday…in the meantime, for some quick perspective regarding CXO’s drill results, we thought it would be useful to highlight the best holes for the Red Chris deposit delivered by Imperial Metals (III, TSX) during 2011 and 2012…keep in mind that the Red Chris, which is going into production next year, has very robust economics and reserves of more than 300 million tonnes grading 0.359% Cu and 0.274 g/t Au…III reported a total of 19 holes during 2011 and 2012 with 5 of them or 26% not returning any significant mineralization (same percentage for CXO so far)…below is a chart showing the BEST 7 Red Chris holes out of 19…

Colorado has hit on 3 of its first 4 holes with results as follows (they haven’t gone as deep yet as III):

NR13-001 333 metres at  0.51% Cu and 0.67 g/t Au

NR13-003 152 metres at 0.21% Cu and 0.55 g/t Au

NR13-004 205 metres at 0.40% Cu and 0.50 g/t Au – 100 metre step-out to the southeast of discovery hole NR13-001.

In addition, recently completed surface geological mapping indicates that the monzonite intrusion at North ROK is 2000 metres x 2500 metres in size and similar to the Red Stock which hosts the Red Chris Mine…over much of this strike length, the North ROK intrusion has also been extensively altered by magnetite-potassium feldspar and quartz sericite pyrite mineral assemblages and appears similar to hydrothermal alteration assemblages spatially associated with Copper and Gold mineralization at the Red Chris mine…geophysical work has also outlined a 1200 m x 1200 m chargeability feature open to the south which has only been tested on its northernmost end by the 3-hole drill program over a 100-metre area…a second 500 x 1000 metre chargeability feature has also been discovered 1 km to the north of the drill area…less than 5% of the area of these geophysical anomalies has been tested by drilling…

What’s emerging at North ROK, therefore, is hugely significant and after yesterday’s 80-cent close, CXO’s market cap is a very modest $39.6 million…the company has no need to do a financing for the rest of this year, and if they do we suspect it could be a strategic financing with another company – possibly a major – and at a premium to the current share price…it’s going to be an interesting summer at Iskut River…

Updated CXO Chart

Let’s now take a look at the Colorado chart…clearly, there is exceptionally strong technical support in the mid-to-upper 60’s which is why the drop below 70 cents intra-day yesterday was such a smart buying opportunity…the 50-day moving average (SMA) at 80 cents also provides good support, and that’s where the stock closed at yesterday…CXO gapped up slightly this morning and is 7 cents higher at 87 cents as of 7:30 am Pacific…

Victory Ventures (VVN, TSX-V) Bucks The Trend

Victory Ventures (VVN, TSX-V) was the only Iskut River play that didn’t drop yesterday, and there’s a reason why – it’s the only company in the area other than Colorado with an active drill program at the moment…Victory is also drilling into a large anomaly of its own at Copau, a property that interestingly lies at the intersection of 2 major regional faults…Victory should be completing its first hole any day now, so the potential exists for some sort of news next week…with a tight share structure and a market cap of only $2.75 million, Victory could run in a hurry if there’s any indication they’ve hit something…VVN spent more than a year defining its drill targets, so they do have a strong degree of confidence they’re on track to find mineralization in the first few holes…

VVN continues to trade in a bullish upsloping channel as shown in John’s 2-month daily chart below…

GoldQuest Mining (GQC, TSX-V)

As we’ve been mentioning, one of the best exploration stories in the entire world right now is in the Dominican Republic where GoldQuest Mining (GQC, TSX-V) is hunting for a third significant discovery at its Las Tres Palmas Project…drilling continues along the newly-identified and very promising Guama Trend immediately to the west of Romero, and yesterday GoldQuest came to life as it jumped 11.5 cents to close at 50 cents…this puts GoldQuest above its 100-day moving average (SMA) for the first time since last October…GQC has had considerable difficulty pushing through a major resistance band between 40 and 48 cents, so yesterday’s move was certainly an eye-opener from a technical perspective…what John would like to see today is confirmation of this move, so another close above that resistance band is what traders/investors need to look for today…below is an updated chart…as of 7:30 am Pacific, GQC is looking strong with the gain of another nickel to 55 cents…

Note: John and Jon both hold share positions in VVN.  Jon holds share positions in CXO and GQC.