BullMarketRun.ca

Gold has traded between $1,233 and $1,249 so far today…as of 5:30 am Pacific, the yellow metal is down $7 an ounce at $1,237…Silver is up a nickel at $19.73…Copper is off 2 pennies at $3.18…Crude Oil has gained 34 cents a barrel to $93.06 while the U.S. Dollar Index is up one-fifth of a point to 80.89…

With a drop of 5.4%, Gold suffered its worst monthly tumble in November in 35 years, continuing the precious metal’s steady decline in 2013…a better month is likely in the works but not after some more nervous nellies likely throw in the towel…what followed after that horrible November 1978, by the way, was an immediate climb that intensified throughout 1979 and eventually resulted in a quadrupling of the Gold price over a period of just 14 months…that’s not to say Gold is headed toward $5,000 an ounce by early 2015 with a repeat performance, but bullion is oversold and in our view has either already found a bottom ($1,180) or is within 10-15% of its ultimate low…the Chinese, who eagerly have been soaking up supply from western investors dumping their bullion holdings and chasing the flavor of the day the last couple of years, are in the position of being able to revalue Gold in the years ahead…the implications of that cannot be understated…

The much touted ETF liquidations that have been instrumental in driving Gold prices lower this year have been absorbed entirely by China as bullion holdings continue to shift from weak western hands into stronger eastern hands…refineries in Switzerland have been busy converting the 400-ounce bullion bars, typically owned by ETFs, into one kilogram bars preferred by Chinese jewelry makers and Gold investors…

A pick-up in Asian physical demand allowed Gold to reverse last week from a low of $1,226…a slew of economic data coming out of the U.S. this week, highlighted by Friday’s non-farm payrolls report, will certainly influence Gold prices in the coming days…economists expect the U.S. economy to have created 185,000 jobs in November, down from 204,000 jobs in October, according to a Reuters’ survey, with the unemployment rate dipping to 7.2% from 7.3%…Barclays’ economists expect payroll gains of 200,000 to help push unemployment lower to a post-crisis low of 7.1%…

The Venture Is Flashing Important Signals

Investors who have allowed themselves to fall into the trap of a negative mind-set regarding the junior exploration market right now could be making a huge mistake – the same mistake they made but in reverse in late 2010/early 2011 when virtually everyone was caught up in the euphoria of sharply rising share prices and the talk of even more riches to come…

This is not a time to be “depressed” about current market conditions – just the opposite in fact…so many investors (including company management personnel) are lost in a fog of negativity at the moment, they can’t even see what’s actually unfolding right in front of their eyes…they are about to be caught asleep at the switch and flat-footed…so take a few minutes and examine our latest three-year weekly Venture chart from John…we’ll walk you through it…

Breakout Above The Long-Term Downtrend Line

Something very significant occurred with the Venture from a technical perspective in late October…that’s when this market finally climbed above a long-term downtrend line that had been in place since 2011 following the high of 2465…over the last six weeks, the downtrend line has acted as support which is what one would hope for and expect…the Index got beaten down a little bit when it couldn’t overcome resistance in the 970’s in the final week of October, but powerful technical support in the low 900’s has been built into this market since the early summer…that kind of foundation is what’s required in order to lay the groundwork for a sustained move at a later point…a rising 100-day moving average (SMA) – the first time we’ve seen this all year – is giving additional support to the Venture at the moment…

RSI(14) Rising Trendline, Out-Performance vs. Gold

Look at the rising RSI(14) trendline on John’s three-year weekly CDNX chart…this is unquestionably IMPRESSIVE, and it has occurred despite a $200 drop in Gold from its August high…accumulation has been strong, and the Venture is now even showing out-performance against Gold for the first time since 2011…positive signs?…absolutely…

The next couple of weeks are an ideal time for accumulation of good quality juniors, in our view, that could really start to take off at some point this month – certainly immediately after Christmas…remember December 2008?…virtually everyone had thrown in the towel but it was the best time ever to be scooping up bargains…the Venture soared about 30% over six trading sessions between the end of December and the first few days of January in a move that ushered in a fresh bull market…there could be some choppy seas during the first half of this month, as usual given the time of the year, but expect 2013 to finish on a very encouraging note…

Selectivity is critical as a rising tide will not lift all boats (many companies are on life support right now and some simply won’t survive which will actually be a good thing)…stick with those companies that possess the following attributes…

1. Strong cash positions

2. Active exploration programs (drilling) with solid properties in safe jurisdictions

3. Superior management (avoid “lifestyle” companies like the plague)

4. Attractive share structures

Within this relatively small universe, we see a very exciting market shaping up…investors don’t plan to fail…they just fail to plan…prepare now for what we see as better days ahead, very soon…

U.S. Dollar Index Weekly Chart

With Friday’s job report and an important Fed meeting up in mid-December, the U.S. Dollar Index is fast approaching a critical juncture…keep in mind, the Venture often moves in the opposite direction of the greenback, so we need to keep a close eye on the Dollar Index for additional clues that the Venture could be gearing up for an important breakout by month-end…there are several problems with the Dollar Index just from a technical perspective (forget the Fed’s never-ending money printing and their plan to keep interest rates at rock-bottom for as long as the eye can see)…the Dollar Index broke below a two-year uptrend line in September which now provides resistance along with a 200-day moving average (SMA) that has flattened out at 82 and is threatening to reverse to the downside by January…recently, the Index has been trading between strong support at 79 and resistance at 81…right now, it’s looking weak and vulnerable, and it’s interesting that it appears to have topped out at the end of June when both Gold and the Venture hit multi-year lows…

While there are still many dollar bulls out there, a potential scenario we see unfolding is a break below critical support at 79 during the first quarter of next year (the first 2014 surprise development?)…such an event would be hugely bullish for both Gold and the Venture…we’ll see what happens…we’ll be watching the Dollar Index like a hawk…