BullMarketRun.com

Gold has pushed solidly through $1,300 to begin the new week after finding resistance at that level last week…as of 6:10 am Pacific, bullion is up $25 an ounce at $1,322…Silver has added 75 cents to $20.28…Copper is up 4 pennies to $3.17…Crude Oil is up another 71 cents to $108.76, climbing to a premium against Brent for the first time since 2010…the U.S. Dollar Index has slid one-tenth of a point to 82.37…

Rising Oil prices, short-covering and continued robust demand for Gold from Asia have combined to send Gold prices to a 1-month high today, impressive follow-through after bullion posted its biggest 32-week gain since November, 2011…Tanaka Kikinzoku Kogyo K.K., Japan’s biggest Gold retailer, has reported that its sales tripled in the second quarter from the previous 3 months… imports by India may climb to more than 900 metric tons in 2013 from 860 tons last year, and China’s purchases may top 1,000 tons, up from 817 tons, the London-based World Gold Council said July 17…although peak demand for physical Gold may have slipped back from the huge surge seen particularly in April when the price fell so sharply, it still remains very strong compared with prior years according to the WGC…Gold premiums in both India and China remain at high levels at a seasonally weak period of the calendar for Gold…

“We are seeing some support for Gold as Bernanke’s statements tell us that the Fed wants to see a visible improvement in economic conditions before they begin tapering,” said Michael Cuggino who manages $12 billion of assets at Permanent Portfolio (PRPFX) Familyof Funds Inc. in San Franciswco…(source: Bloomberg)… “The longer-term reasons for owning Gold, like capital preservation, remain as easy money will continue to flow into the system”…Gold ETP holdings fell 2.9 metric tons to 1,976 tons last Friday, the lowest since May, 2010, according to data compiled by Bloomberg…but the 10.2 tons sold last week was the least since May…

As John’s charts have shown, Gold has a resistance band between $1,320 and $1,350…this will be bullion’s next key hurdle to overcome…it’ll also be interesting to see if there’s any significant producer hedging above $1,300 an ounce…

Today’s Markets

Asian markets were modestly higher overnight after Japanese Prime Minister Shinzo Abe’s landslide victory in Sunday’s upper house elections signaled a green light for future monetary stimulus…Japan’s Nikkei average climbed 68 points to close at 14658…China’s Shanghai Composite, meanwhile, erased early losses to close 12 points higher at 2005…late Friday, China offered its strongest signal yet of worry over slowing growth and its commitment to financial reform as it loosened a key control over its banks…over the weekend, China’s central bank scrapped controls on lending rates and started to let financial institutions price loans by themselves…the move could let some borrowers tap cheaper loans at a time when China’s economy threatens to slow to a 20-year low and as corporate and local government borrowers struggle with a growing burden of interest payments…

European shares are mixed in late trading overseas…in New York, stock index futures as of 6:10 am Pacific are pointing toward a slightly lower open on Wall Street…economists now believe the U.S. economy grew at an annualized rate of just 1.5% in the second quarter, according to The Wall Street Journal’s latest survey of forecasters…the economists have become markedly more pessimistic since June, when they estimated a 1.9% pace for second-quarter growth, and several forecasters now believe the growth rate fell below 1% for the second time in the past 3 quarters…economists do expect modestly faster growth in the 2nd half of the year: at a 2.4% annual rate in the third quarter and 2.7% in the fourth, according to the Journal survey…but even if those projections hold up, that would suggest another year of anemic growth around 2%, not enough to bring down unemployment quickly – hence the reason for Bernanke’s more cautious tone last week with regard to when the Fed may start to reign in its bond-buying…meanwhile, President Obama will begin laying the groundwork for a new battle with Republicans over the budget, including a raising of the debt ceiling, with a series of speeches on the economy beginning Wednesday in Illinois…

With Gold prices busting through $1,300, expect a solid day for the Venture Exchange which should be able to push above its 50-day moving average (SMA) for the first time in more than 6 months…volume improved last week but given the time of the year, it’s still on the sluggish side…

Powerful Dynamics At Work In Garibaldi Resources (GGI, TSX-V)

Garibaldi Resources‘ (GGI, TSX-V) sound stewardship, geological expertise, persistence and good luck have all combined to create an historic and immediate opportunity for the company and investors as the Venture shows signs of staging a strong rebound during this 3rd quarter…with nearly $5 million in working capital as reported in its most recent financials (April 30), Garibaldi is one of the few Venture-listed companies that remarkably has NOT had to do a financing during the last 4 years, thereby creating a clear runway for the share price as some important “trigger” events unfold…

Garibaldi has made excellent progress in Mexico where it holds 3 district-scale projects in robust mining areas, one of which is showing strong potential for hosting a large Gold-Copper porphyry system…Agnico-Eagle, Coeur d’Alene, AuRico Gold and Paramount Gold and Silver have each purchased proprietary Hyperspectral remote sensing data from Garibaldi which has been able to use this proven, low-cost reconnaissance exploration tool to effectively map the alteration minerals associated with epithermal and porphyry type deposits throughout the Sierra Madre…Garibaldi has 100% ownership of more than 1,000 sq. km in this prolific area of Mexico, and they’ve already demonstrated their ability to create value there through development of the Temoris Concessions and the sale of that option in 2009 to Paramount…GGI has immense potential just with its Mexican assets…

But Garibaldi’s best-kept secret at the moment, and an immediate catalyst, is its 170 sq. km Grizzly Property that adjoins the western and southern boundaries of the newly-named Sheslay Porphyry Project in northwest British Columbia…we cannot emphasize enough the importance of the Grizzly, strategically and geologically, now that Pete Bernier and his Prosper Gold (PGX.H, TSX-V) team have selected this area as the next chapter in their incredible story that began with Blackwater…Dirk Tempelman-Kluit is one of Canada’s premier geologists, and it was his expertise that allowed Richfield Ventures to make one of Canada’s biggest-ever Gold discoveries west of Ontario a few years ago…Richfield went from pennies to more than $10 a share as it was acquired for half a billion dollars by New Gold Inc. (NGD, TSX) in 2011…the level of execution displayed by Bernier’s Richfield team over such a short period at Blackwater was phenomenal, and we know because we followed that story closely from the beginning…they created immense value and also turned Blackwater into a very significant area play…there’s a good chance they’ll repeat that success at Sheslay which they’ve optioned from Firesteel Resources (FTR, TSX-V)…the implications for Garibaldi – trading at merely 8 cents a share, its working capital – could be profound…

As Bernier explained in Prosper Gold’s news release last Thursday: “Since the sale of our last company, Richfield Ventures in 2011, it has taken us two years to identify a multiple bulk-tonnage Copper-Gold target area, with historical drill confirmed discoveries that met our exploration criteria for Prosper Gold.  The Sheslay project area is close to infrastructure, drill permitted and drill ready. We look forward to advancing the project in the near term.”

Bernier is not wasting any time…a field exploration program has already started, and a 5,000-metre Phase 1 drill program is slated to begin by early next month…rest assured, he and his team will move at lightening speed with amazing efficiency and precision…Tempelman-Kluit is a genius at data compilation and interpretation, and he has plenty of historical data to guide him on this project…they will drill deeper than Firesteel ever did and they will also drill right through the winter if they see fit…they have strong financial resources, personally and through their network that made fortunes on Richfield…

We’ll have much more on the potential of the Sheslay Project this week, but the fact that Bernier’s Brigade is descending on the area has suddenly made the Grizzly one of the most valuable pieces of real estate in this most northerly part of B.C.’s infamous “Golden Triangle”…largely due to its easier access, Sheslay is much more advanced from an exploration standpoint…but there’s an intimate connection between the Sheslay and the Grizzly, and the “blue sky” potential of the latter is very evident based on airborne magnetic surveys, other data, and common sense…particularly intriguing is the northwest corner of the Grizzly which features the Kaketsa Pluton, an elliptical, north-trending intrusion approximately 4 x 5.6 km in size and interpreted by geologists as an important “heat engine” driving mineralizing fluids – at both the Grizzly and the Sheslay…

A Picture Tells A Thousand Words

Follow this closely…below is a map from a 2012 Grizzly technical report, showing the entire 170 sq. km Grizzly Property and the 68 sq. km Sheslay Project…4 of the 5 porphyry bodies identified to date at the Sheslay (more will likely be discovered) are clustered within a 12 sq. km target area (Star)…the Pyrrhotite Creek porphyry, according to Prosper Gold, appears to be located in a second distinct multiple target area to the southwest near the Sheslay-Grizzly boundary…meanwhile, note the 4 known alkalic porphyry Cu-Au showings (Grizzly, Kid, Ho and West Kaketsa) discovered historically through intermittent exploration within the NW corner of the Garibaldi claims…keep in mind, this entire area of the Grizzly is still very under-explored…what we do know from historical reports is that the mineralization observed at West Kaketsa (highly altered and sheared volcanic and intrusive rocks containing disseminated and fracture controlled chalcopyrite over exposed widths of at least 24 metres) resembles that at Pyrrhotite Creek…only 3 shallow holes have ever been drilled at the Grizzly – more than 3 decades ago, and in the NW corner of the property…each hole reportedly intersected potassic alteration and Copper mineralization, though no values are available and apparently none of the holes was assayed for Gold…

Imagine for a moment that you’re Pete Bernier or Dirk Tempelman-Kluit standing in the middle of the Sheslay Project…you’re thinking big, and everywhere you look to the west and the south you see a Grizzly, pardon the pun…Garibaldi is in a very enviable position, holding important pieces of this huge geological puzzle covering 240 sq. km…meanwhile, a major (Teck Resources, TCK.B, TSX) has staked a large parcel of ground right up to the southern border of the Grizzly…this whole area is right on trend with massive deposits to the south…the potential scale of this is truly immense, especially considering the players involved…Garibaldi President and CEO Steve Regoci has his hands full, first with quality assets in Mexico and now also with the Grizzly…he understands how recent events have made the Grizzly a “game changer” for GGI, and this very capable leader plans to take full advantage of the opportunity…he has also agreed to an interview in the very near future with BMR, so we look forward to exploring all dimensions of this fascinating story in the days and weeks ahead as drilling commences at Sheslay…

While Colorado Resources (CXO, TSX-V) continues to make impressive progress 60 miles to the east at its North ROK Property, investors will soon realize that there are two major plays in this part of northwestern British Columbia…as prospective as North ROK is, the Sheslay and the Grizzly are about to command some major attention…

Garibaldi Updated Chart

If a company’s fundamentals are changing for the better, as they clearly are for Garibaldi, then this should be reflected technically in the behavior of the stock…indeed, that’s what we’re seeing…there are several recent key developments in the GGI chart…

1. RSI(14) has broken above long-term resistance;

2. The 50 and 100-day moving averages (SMA’s) have each reversed to the upside;

3. The share price has broken above a 6-month horizontal channel;

4. Buying pressure has replaced selling pressure, dominant since September of last year.

As always, perform your own due diligence…a combination of fundamental and technical factors has us convinced that Garibaldi’s current strength is just the beginning of a major move…

Zenyatta Ventures Ltd. (ZEN, TSX-V)

Zenyatta Ventures Ltd. (ZEN, TSX-V) has been an excellent example of tremendous execution both on the ground and in the market, reminiscent of Bernier’s success with Richfield though of course Zenyatta is developing a hydrothermal graphite deposit…we remain bullish on Zenyatta’s prospects but investors must keep in mind there will be pullbacks on profit-taking which will also help to unwind temporarily overbought conditions…below is a 2.5-year weekly chart from John that shows an interesting upsloping wedge…last week, ZEN hit the top of the upsloping wedge ($4.17) before giving up about 10% to close the week at $3.72…it’s possible ZEN could re-test the the top of that upsloping wedge in the coming days…but the chart clearly suggests that at least a short period of consolidation is likely after a 50% jump in the share price over the last month…if past experience with ZEN is any guide, the 20-day moving average (SMA) – currently just below $3.45 – should provide strong technical support…there is huge support at $2.50, but a retracement of that magnitude doesn’t seem likely…

Updated Short-Term Silver Chart

Important support for Silver has held in the band between $17.50 and $19.50…up momentum is slowly increasing, and the technical case is certainly strong for higher prices during this 3rd quarter…

Long-Term Silver Chart

What’s bullish about this 11-year monthly chart is the RSI(2) which remains at an extreme 1.04%…this kind of low reading simply cannot last much longer…a strong case can be made that we could see a 30% jump in Silver prices during this 2nd half of 2013 with a test of the $26 area – previous strong support that is now important resistance…

Note: John and Jon both hold share positions in GGI.