A Happy Thanksgiving to our American readers…U.S. equity markets of course are closed today, and as a result this is an abbreviated edition of Morning Musings…Gold has traded between $1,236 and $1,246 so far today…as of 7:30 am Pacific, bullion is up $6 an ounce at $1,244…Silver has added a penny to $19.68…Copper is flat at $3.18…Crude Oil is unchanged at $92.22 while the U.S. Dollar Index has fallen more than one-tenth of a point to 80.57…
As a gauge of investor sentiment, holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, fell 5.7 tonnes to 843.21 tonnes yesterday to their lowest since early 2009…the fund has seen outflows of more than 450 tonnes this year with investors switching into rallying equities…the outflows from ETFs have been the biggest factor in Gold prices dropping more than 25% this year…on a positive note, selling of Gold by North American investors has been soaked up by investors in eastern countries, especially China, and they tend to be longer-term players…the shift in Gold holdings from west to east has been an important theme this year as we’ve pointed out on numerous occasions…
China, which unquestionably has now overtaken India as the world’s biggest consumer of the metal, has seen a pick-up in demand this week due to lower prices…traded volumes of 99.99% purity Gold (the “four nines”) on the Shanghai Gold Exchange hit 18.3 tonnes today, the highest volume in nearly two months according to Reuters data…China’s net Gold imports from Hong Kong climbed to their second highest on record in October as it bought more than 100 tonnes of Gold for a sixth straight month to meet unprecedented demand…
Today’s Markets
Canadian markets will be quiet today with the U.S. holiday…the TSX is up 34 points as of 7:30 am Pacific while the Venture is flat at 930…volumes are low…
Asian markets were strong overnight with China’s Shanghai Composite pushing 18 points higher to finish at a one-month high of 2219…the market was aided by news that Chinese industrial profits rose at annual rate of 15.1% in October…a close above 2200 for the week would be bullish from a technical perspective…Japan’s Nikkei average, meanwhile, jumped 277 points or 1.8% to close at 15727, its highest level since December, 2007, as the dollar-yen rose above the 102 mark to a fresh six-month peak…
European shares were up slightly today…morale in businesses across the euro zone increased again this month, boosting hopes that firms could spur on the euro zone’s bumpy economic recovery…the European Commission’s monthly business and consumer survey, published today, revealed that economic sentiment increased to 98.5 in November – up from 97.7 in October…the figure slightly exceeded expectations…
The European Central Bank yesterday issued a stark warning over the threat posed by the scaling back of U.S. monetary stimulus, calling on euro zone policy makers to do more to prepare for potential market shocks from Federal Reserve ātaperingā…in its latest financial stability report, the ECB said the risks to the euro zone’s financial system from outside the currency bloc had grown since May due to the Fed’s talk of scaling back its monthly bond purchases – despite a general improvement in market conditions…
Fed Has Created A “Massive Bubble” – David Stockman
The actions of the Federal Reserve have created a massive bubble not just in U.S. stock prices, but in a variety of assets all across the world, contends David Stockman, who served as the director of the Office of Management and Budget under President Ronald Reagan…Stockman didn’t mince words during an interview on CNBC yesterday…“The Fed is exporting this lunatic policy worldwide,” Stockman said, referring to the Fed’sĀ asset-purchasing program. “Central banks all over the world have been massively expanding their balance sheets, and as a result of that there are bubbles in everything in the world, asset values are exaggerated everywhere.” The issue, says Stockman, is that central banks around the world have followed the Fed’s dovish lead “for either good reasons of defending their own currency and their trade and their exchange rate, or because they’re replicating the Fed’s erroneous policies.” Either way, “Central banks have been massively expanding their balance sheets,” which has reduced interest rates on government bonds, and increased the amount of money chasing a fixed set of assets…Stockman, who is the recent author of The Great Deformation: The Corruption of Capitalism in America, says that it takes little digging to discover that assets are overextended…
S&P 500, Nasdaq Charts
U.S. equity markets are showing little sign of slowing down – so if there is a bubble, as Stockman contends, it’s likely about to become even bigger…
Below is a 20-year monthly S&P 500 chart from John…the trend since the Crash of 2008 has been remarkable indeed…the S&P closed yesterday at another record high of 1807, and the next Fib. target level is 1918…it’s reasonable to expect a correction to the long-term uptrend line, or close to it, at some point next year…in the meantime, the party continues…
S&P 500 20-Year Monthly Chart
Nasdaq 20-Year Monthly Chart
The Nasdaq hit a 13-year high yesterday, closing at 4045, and the next main resistance levels are 4250, 4728 and 5133 as shown in this chart from John…
LX Ventures Inc. (LXV, TSX-V) Updated Chart
Social media darling LX Ventures has closed its $3.04 million private placement – not hard to do when your stock is trading nearly three times higher than the PP price (in this case, 35 cents)…the Fib. target of 89 cents remains resistance until a breakout above this level is confirmed as per John’s 2.5-year weekly chart…technically overbought conditions clearly exist in LXV, which investors need to be cognizant of, but the stock does have powerful momentum on its side which means these overbought conditions could persist for a while yet…as of 7:30 am Pacific, LXV is up 2 pennies at 91 cents…don’t forget this wise market saying, though – be fearful when others are greedy, be greedy when others are fearful…
Contact Exploration Inc. (CEX, TSX-V) Update
We’ve mentioned Contact Exploration (CEX, TSX-V) on several occasions in recent months as it’s certainly a company worthy of our readers’ due diligence…CEX, which had production of 330 BOE/d for the quarter ended September 30, continues to successfully extend its East Kakwa Montney program westward…the company is completing wells at or below industry leading levels, laying the foundation for future success…
Technically, CEX has been trading in a horizontal channel between 18 and 28 cents for the last year…as the company’s fundamentals continue to improve, a breakout above that channel seems highly likely…patient investors should do well with this one in 2014…below is a 2.5-year weekly chart from John…CEX is off a penny at 26 cents through the first hour of trading…
Note: John, Terry and Jon do not hold share positions in LXV or CEX.
GCO- INsider exercised 1.1 million in 14c warrants and another bought 40k shares on open market yesterday
Comment by db — November 28, 2013 @ 7:42 am
Heavy volume and price increase in BG. News must be coming. Either that, they hit visible copper at depth. Drilling right into the center of the deposit (potassic core) 1400 meters deep. Could be an even bigger whopper Jon?
Comment by Dan — November 28, 2013 @ 10:58 am
The “sweet zone” for accumulation on BG as we said was between 15 and 20 cents on the retrace – this is looking very good. We’ll have an updated chart tomorrow. Shows you what can happen when a company dares to go deeper. I suspect there are more excellent results to come as they have yet to hit the core of this system. Interestingly, the first 100-metre or so mineralized section of that hole, near-surface, returned exactly the same grades and length as GGI’s MAR-13-02 at Tonichi where they hit a supergene zone, and are continuing to drill. The richer stuff is often at depth.
Comment by Jon - BMR — November 28, 2013 @ 11:12 am
Yeah, I own GGI shares as well. The only problem with the current drill that GGI has, it can only go between 250 and 300 meters deep. But I suppose if they hit higher grade mineralization they could bring in another drill. Interesting though they are still drilling at Locust. They are either drilling another hole by now, or are going deeper with a different drill.
Comment by Dan — November 28, 2013 @ 11:23 am
Rainbow released some nice sampling results looks like they have drill targets if this gold bull can ever get going again.
Comment by Justin — November 28, 2013 @ 2:12 pm
Dan, sorry, I have to correct you on something. You’ve missed a very important fact with regard to GGI’s current drilling at Tonichi. MAR-13-02 was drilled from a topographically high area. MAR-13-03 is being drilled from the bottom of the valley floor, to access this system more at depth with the same rig. So they started from deeper down. Great strategy. You’re correct in stating the GGI rig can drill about a 300-metre length hole, but in this case it’s where the hole was collared that has to be taken into account in terms of how deep they’re penetrating the system.
Comment by Jon - BMR — November 28, 2013 @ 3:23 pm
Jon
Let’s see if i can figure this out. They drill down 300-metres on top
of the hill, collar the hole, then move down to the valley, to gain
more depth, that is, the difference between the height of the valley
& the hill, but suppose they miss the system in the valley, they are
then left with a hole in the hill, that goes down 300 metres. They
can’t call it a hole in one for sure, because of the second hole
in the valley, and it gives me less than an optimistic feeling, when
charting their movements, a decline from the hill top, way down to
the valley, a black candlestick for sure. R !
Comment by Bert — November 28, 2013 @ 4:04 pm
Jon, yes i understand they are drilling from the valley floor and if they have a good idea where the system is located then it has a high chance of success. But don’t you think hole 3 would be done by now? If the average was 25 meters per day, 12 days would put them at 300 meters. GGI was already drilling Nov 7th so the hole should have been completed by Nov 19th. The company already stated that drilling continues, so either they have another rig that can go deeper, or they are drilling another hole at a different location or possibly different direction from the same collar. That was my point. Either way, it would be nice if GGI gave investors a more detailed update than just say the drill is still turning. I have been extremely patient I believe, but it annoys me a little that they are not more forthcoming. There is a reason the share price is still at 9 cents.
Comment by Dan — November 28, 2013 @ 4:46 pm
Realistically, Dan, it’s a little soon to expect news from any company just 3 weeks after starting drilling. Rather than putting out fluff, I’d rather see a company provide investors with something that has some meat and context to it, especially in these markets. GGI is drilling and that’s what matters to me, because that’s how discoveries are made and how share prices can really take off. Barisan is a good recent example. I’m sure we’ll be hearing from GGI soon. And keep in mind, they’re bouncing more than one ball. Lots going on.
Comment by Jon - BMR — November 28, 2013 @ 5:11 pm
V.GGI 12.50%
V.HBK 20.00%
T.SAM -13.51%
V.IO -16.67%
V.TGK -33.33%
V.GTA -6.25%
V.KWG 0.00%
V.RBW -37.50%
V.FMS -8.82%
V.PGX -18.84%
V.GBB -12.50%
V.GMZ -12.50%
120.32 107.54 -12.78 -10.62%
bmr members stock picks
Comment by gil — November 28, 2013 @ 5:26 pm
It is obvious that Dan is not quite satisfied, feeling that
GGI is not forthcoming enough, tonight, it is obvious that i
am not quite satisfied, considering the stock price has fallen
from a recent high of 0.145 to 0.09, especially since they are
drilling. I have stated on this board before, beware when the
market turns it’s back on a stock price, there is always
something not just right, whether it be not forthcoming
enough or ??? Sorry ! but that’s how i feel tonight.
Whoops ! I want to tell you about BG before i retire for
the night. I had a very small position of 5K shares.
Yesterday, i decided to sell, but only managed to get
rid of 3500, i was disappointed, because of another
commission for the 1500, although i only pay 9.95, but
every penny counts. Today i was pleasantly surprised, i
managed to sell the other 1500 at 0.31 & would you believe,
i profited more from the 1500 than i did the 3500, so one
never knows what tomorrow will bring. Good night ! R !
Comment by Bert — November 28, 2013 @ 7:40 pm
Dan, Bert. Which is exactly why it is,imo, better to invest in companies that are aiming for growth and not strictly dependent on one or two glory holes. Have a look at Dynacore Gold. T.DNG. They reached a low of 90 cents a few months ago and recently hit a new high of 1.90ish all while gold has taken a beating. WHy? they are focused on organic growth. Which is why, and yes here comes the pump, I am invested in Inca One (v.io). They are following Dynacore’s model and by this time next year, they will be processing at 100tpd and you can still buy. It may take a little bit for the s/p to climb, but it is reassuring to know they are more focused on becoming cash flow positive and growing the business rather than rolling the dice and hoping to hit something….anything….GLTA
Comment by Tony T. — November 29, 2013 @ 2:15 am
Good morning Tony. I frequent this board because i want to believe in
the messenger & the messenger has been very very positive on GGI. In
this case, i got an impression that he knows more than us, thus i took
a position. Today i am not willing to blame the messenger, instead am
trying to figure out why the company is lacking. Although they held
a couple of teleconferences, they are not making an impression on the
market. They have dropped approximately 40% from their recent high &
although we have a bad market, it is my opinion, the price should have
held at around 0.15. They seem to have everything going for them for
a small company, but there is something i can’t put my finger on, maybe
it’s not about what they have, it’s about what they should be saying
about what they have, or something like that. R !
Comment by Bert — November 29, 2013 @ 4:10 am
Bert, GGI has a lot of things on the go at the moment as one can discern from recent news. Just be a little patient and I’m convinced we’ll all be pleasantly surprised sooner rather than later. And from a technical perspective, the stock has been acting in a very normal and healthy way, holding nicely at its rising long-term moving averages (few Venture stocks even have rising long-term SMA’s right now). You make a good point – “It’s about what they should be saying about what they have”. This is a very solid group of people who know what they’re doing. They’ve been systematically ramping things up over the last 2-3 months and I suspect this is all leading to something more impactful rather imminently.
Comment by Jon - BMR — November 29, 2013 @ 4:27 am
Tony
Read post # 14 & you will get my drift. I suppose my
chances with GGI is much better than a lotto ticket,
so here i am, hoping the messenger knows what he is
talking about. Have a good day. R !
Comment by Bert — November 29, 2013 @ 4:41 am
Re GGI, to elaborate a little further, i got cranky
with RBW & we all know what happened there. I realize
that in this market, those stocks are a step up from
nothing, but it’s fun when they strike something
exciting to the market. BG is a good example, in one
of my less favorite countries, but nevertheless, it
gets a positive re-action from the market, whose
participants seem to have a very short memory, they
seem to have forgotten already about the guy, who
jumped from an helicopter. R !
Comment by Bert — November 29, 2013 @ 5:31 am