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Gold continues to trade in a narrow range in the vicinity of $1,700 (support band is between $1,675 and $1,700) and that pattern can be expected to continue through Christmas…as of 7:40 am Pacific, the yellow metal is down $5 an ounce at $1,692…Silver is 3 cents lower at $32.25…Copper is off 2 pennies at $3.62…Crude Oil is up 49 cents at $87.69 while the U.S. Dollar Index is off more than one-tenth of a point at 79.43…

Due to the upcoming Christmas holidays, we’re on an abbreviated schedule at BMR from today through December 31…we’ll have postings each market day as usual, but they’ll be shorter…

Insider Sentiment Improves In Precious Metals Stocks

Insider sentiment in the sector has been trending higher in recent weeks and there are now more than three stocks in the group with key insider buying for every one with selling, according to INK Research which monitors trading activity by executives and directors within their own businesses…INK Research’s indicator for the group now stands at 321 per cent, up 110 points since November 15…since mid-November, the TSX Gold Index is down about 2%..for the year, it’s down about 18% and is one of the worst performing sectors on the TSX…insiders are betting the stocks may be undervalued or are at least likely to rise in coming months…insider sentiment within sectors tends to best foreshadow market moves over a 12-to 18-month time frame…

Today’s Markets

Asian markets were generally higher overnight with China’s Shanghai Composite closing up 2 points at 2162, 2 points above a down trendline in place since April, 2011…we should certainly get confirmation of a major breakout in this market over the next 2 to 3 weeks…meanwhile, Japan’s Nikkei average hit an 8.5-month high…investors will be keenly watching the Bank of Japan this week as it begins a policy meeting today…Shinzo Abe, Japan’s next Prime Minister, piled pressure on the central bank on Monday, calling for more aggressive monetary easing, after his party’s landslide election victory Sunday…it’ll be interesting to see how the situation in Japan works itself out over the coming months and what impact it may have on a global scale…the yen recently surpassed the euro as the most shorted major currency for the first time in three years…

North American markets continue their upward momentum amid optimism that a “fiscal cliff” deal will be reached by year-end…the Dow is up 53 points as of 7:40 am Pacific while the TSX has gained 33 points…the Venture Exchange now appears to be out of danger after falling within a point of critical support last Thursday…tax-loss selling pressures are quickly abating and the Index has likely started a year-end rally that should intensify in the days ahead…the Venture is currently down 2 points at 1183…

Below is a long-term weekly Venture chart from John going back to 2001 which shows the Wave 2 correction from 2465 to the June 2012 low of 1154…the solid blue line is the 1000-day moving average (SMA) which has recently reversed to the upside after a four-year decline…the pattern we’ve seen over the last 6 months, including a successful re-test of the June low, is highly encouraging entering 2013…

Rainbow Resources (RBW, TSX-V) Update

Below is Part 2 of our recent interview with RBW President David Johnston:

BMR: David, Rainbow has had a very active second half of 2012, drilling three properties and carrying out prospecting on others.  What’s the focus going forward?

Johnston: You’re right, we’ve been testing our Big Strike Project in the Kootenays and besides the International, the Gold Viking, Referendum and Whitewater properties look the most interesting at the moment.  With Gold Viking, I suggest investors carefully review our last news on December 4.  A lot of information was jammed in there  including preliminary results from the second hole where we had two samples that came back with greater than 100 grams per tonne Silver in a 4.6-metre interval near-surface.  These samples were over-limit.  Basically, this particular analysis could not detect how much greater than 100 grams these samples were.  So they were sent back for fire assaying which will give us precise numbers.  There was some Gold in there as well, less than a gram over 4.6 metres but it showed we could be on the trail of something.  This hole was drilled south of Springer Creek where historical reports have stated there’s good potential for a Gold-Silver system.  The fact we hit this intersection in only the second hole ever drilled at Gold Viking is interesting to say the least.  We’re cautiously optimistic regarding other holes in this area based on visual analysis.  We’re looking forward to getting the re-checks back and assay results from additional holes very soon.

BMR: If you got some breakthrough results, is it possible to go back to Gold Viking for some follow-up drilling over the winter?

Johnston: Logistically, this shouldn’t be a problem.  There’s not nearly as much snow at Gold Viking over the winter as the International.  Gold Viking is further south and at a much lower elevation.

BMR: A little bit to the north of Gold Viking, about 8 miles, is Discovery Ventures’ Willa deposit.  Discovery Ventures has grabbed a lot of attention by announcing they intend to put the Willa into production.  Was the Willa something that Rainbow ever considered?

Johnston: Our strategy is to discover deposits and deliver value to our shareholders by doing so.  Discovery Ventures is doing something quite different but we’re delighted to see that they’re enjoying success so far.  It’s positive for the whole area.  And if we do make a discovery at Gold Viking, perhaps there’s a way to work together with that group to both companies’ mutual benefit.  So I couldn’t be happier to see what they’re doing.  What that also demonstrates is the geological merit of the district.  It’s a great area to be searching for Gold and Silver, very under-explored despite considerable historical production.   Gold Viking itself is right next to the Slocan Valley’s #1 Silver producer from the 1900’s, the Ottawa Mines which is part of our Ottawa Property.  The grades were astounding.

BMR: It seems you still have some sorting out to do in the Kootenays to determine exactly what your flagship property is in that area with 8 properties in total.  Overall, is Jewel Ridge the go-to project at the moment?

Johnston: It’s certainly the most advanced, and we’re thrilled at what we’ve seen there so far.  We have a real opportunity in the year ahead to outline a significant deposit at Jewel Ridge.  That’s what our focus will be.  Access is easy and all the required infrastructure is nearby.  You couldn’t ask for a better jurisdiction to operate in.  The historical data we have is invaluable and should save us an enormous amount of time and money as we put the numbers together and carefully target important areas to drill.  There’s no question, we have a lot of work to do with this property.  The mineralization going north-south appears to be continuous for 4 kilometres.  We have a lot of data coming in between now and the end of the month, so we’ll have a major update on this project in January for sure.

BMR: Thanks, David, have a Merry Christmas and good luck in 2013.

Johnston: Thank you very much.  And I’d like to take this opportunity to also thank our shareholders for their loyal support and wish them a Merry Christmas, too.   There are still a couple of weeks left in 2012, and when we look back at this year I’m confident we’re going to be able to say it has been a year of great achievement for Rainbow.

Cadillac Mining (CQX, TSX-V)

Cadillac Mining (CQX, TSX-V) has a tendency to make major moves very quickly…for the past couple of months, CQX has been hovering between 8 and 10 cents where there is strong technical support…the company made impressive strides with its Gold-Silver project in Utah this year and is currently looking to secure financing to carry out additional work…

Castle Resources (CRI, TSX-V)

Another company to keep an eye on is Castle Resources (CRI, TSX-V) which continues to advance its Granduc Copper Project near Stewart, British Columbia…we suggest investors perform their due diligence on CRI if they haven’t already…technically, it has a strong support band between 18 and 20 cents as John shows in this 2.5-year weekly chart…

Note: John and Jon both hold share positions in RBW.  John, Jon and Terry do not hold positions in CQX or CRI.