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November 5, 2013

BMR Morning Market Musings…

Gold slipped as low as $1,309 overnight but is now trading near its high of the day, up $3 an ounce at $1,318 as of 5:00 am Pacific…Silver is up 4 pennies at $21.70…Copper is flat at $3.24…Crude Oil is off 20 cents at $94.42…WTIC is near a 4-month low amid speculation that U.S. inventories increased for a 7th straight week…the U.S. Dollar Index, meanwhile, is essentially unchanged at 80.58…

Bullion has fallen for the past 5 trading sessions and a 6th consecutive daily drop would be the longest losing run since May…physical demand from 2 key players – China and India – has been soft in recent days, according to reports…

Holdings in Gold-backed ETP’s fell 0.3 metric tons to 1,875 tons yesterday, remaining at the lowest since April, 2010, according to data compiled by Bloomberg…

“Jim Sinclair’s $50,000 Gold Call – Let’s Hope It Doesn’t Happen” – interesting article yesterday by Lawrence Williams at www.mineweb.com…Sinclair’s current shorter-term predictions are that Gold will hit $1,650 this year, rise to $2,400, fall back and then move up to between $3,200 and $3,500 by the end of 2016…if only we all had a crystal ball…Sinclair says he also sees unprecedented manipulation of prices in the precious metals markets which has been causing distortion, with huge amounts of paper Gold so far being successful in keeping the Gold price down…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite overcame early weakness to close 8 points higher at 2157…trading in Japan resumed after a public holiday yesterday, and the Nikkei average climbed 24 points to finish at 14225…Japan’s monetary base grew 45.8% in October from a year earlier to 186.87 trillion yen, hitting a record high for the 8th straight month as the Bank of Japan kept pumping money into the financial system to beat deflation under its ultra-loose monetary policy, the central bank said yesterday…eventually, how can this not have important ramifications?…

European equities came under moderate pressure today after the European Union’s Commission released a relatively subdued outlook for the economy in its Autumn forecast…

Stock index futures in New York as of 5:00 am Pacific are pointing toward a slightly lower open on Wall Street…

Signs Of More Structural Reform In China

A report from Associated Press says Chinese leaders have ordered local officials to stop expanding industries such as steel and cement in which supply outstrips demand, a cabinet statement says, in a sign previous orders to cut overcapacity were ignored…Beijing has been trying since 2009 to cut excess production capacity, which has triggered price-cutting wars that threaten the financial health of some industries…but lower-level leaders whose promotions depend on economic development have continued to support local industries…in a video conference yesterday, planning officials warned local leaders to stop ignoring orders to reduce overcapacity in industries including steel, cement, aluminium and glass…“Those who still violate discipline will be heavily punished,” said the deputy director of the cabinet planning agency, the National Development and Reform Commission, Hu Zucai, according to the government newspaper China Daily…

Many Americans Already Perceive China As World’s Dominant Economic Power

More than one quarter of Americans currently perceive China as the world’s dominant economic power, according to a new survey (GfK North America with TheStreet), a reflection of the changing global order…while China’s economic strength has been on the rise, particularly over the last decade, the size of the mainland economy at $8.23 trillion is just over half that of the U.S. at $15.68 trillion, according to 2012 GDP data…however, China is seen overtaking the U.S. as the world’s largest economy by 2030, according to the National Intelligence Council, an analytical arm of the U.S. government’s Office of the Director of National Intelligence…

U.S. Dollar Index Updated Chart

The direction of the U.S. Dollar Index is critical to both Gold and the Venture Exchange…recently, the Index found support as expected at 79 before rebounding and challenging resistance at 81 yesterday…it may challenge that resistance again in the coming days…the major pattern remains bearish, however, in particular due to the breakdown in September of the 2.5-year uptrend on the weekly chart…a bearish downsloping channel has now developed, and that’s likely to keep the Dollar Index under pressure…this suggests the Fed will likely maintain the pace of its current bond buying program well into 2014, longer than most pundits are now predicting…

Venture – U.S. Dollar Index Comparative Chart

The very close correlation between the Venture and the U.S. Dollar Index means investors in the junior exploration sector must keep a close eye on the direction of the greenback…below is a 15-year monthly CDNX-U.S. Dollar Index comparative chart…any major weakness in the Dollar Index (i.e., a break below strong support at 79) would give the Venture a much-needed boost…

Fission Uranium Corp. (FCU, TSX-V) Update

Fission Uranium (FCU, TSX-V) announced yesterday the discovery of a 6th mineralized zone at PLS, a significant step-out (525 metres) west of the initial discovery zone…PLS has been expanding rapidly eastwards, so hole PLS13-118 (21.5 m total composite mineralization) to the west is an important development in terms of the potential scale of this project…additional drilling will focus on this new zone…

FCU gained 6 cents yesterday on the news to close at $1.09…volume was nearly 1 million shares (all exchanges)…technically, FCU has been under some pressure in recent weeks but very strong support exists from 96 cents…yesterday, the stock climbed back above its still-rising 100-day moving average (SMA) at $1.07…

Investor patience with FCU should be rewarded…this is a very strong play in every respect…below is a 6-month daily chart from John…

Azincourt Uranium Inc. (AAZ, TSX-V) Update

Azincourt Uranium (AAZ, TSX-V), which has joint-ventured PLS North with Fission, continues to perform well…yesterday, AAZ broke above resistance at 33 cents, closing at 34 cents…this breakout requires confirmation today…for short-term traders, the time to accumulate aggressively was when this was in the low-to-mid 20’s, as John’s charts were showing…the low-to-mid 30’s could become new support…

Probe Mines Ltd. (PRB, TSX-V) Update

Probe Mines (PRB, TSX-V) has consistently out-performed Gold and the TSX Gold Index since the late spring, and we see no reason why that trend won’t continue as the company’s promising Borden Lake deposit continues to evolve…at some point before year-end, it seems likely that PRB will push through resistance around $2.20 and start a fresh move higher…fundamentally and technically, this is another strong play…PRB closed yesterday at $2.16…


Note: John, Terry and Jon do not hold share positions in FCU, AAZ or PRB.

15 Comments

  1. An RBW director has recently purchased 134,000 shares on the open market.

    Comment by Alexandre — November 5, 2013 @ 7:16 am

  2. Jon,AAZ is having a nice pullback this morning.What do you think, would this be an opportunity to buy some shares under 30 cents before it takes off again? Have a feeling this pullback will be temporary with the large amount of shares being accumulated the past few weeks.Don’t want to miss out on another possible Alpha like company as I believe AAZ has that potential ( low share count,joint partnership with FCU, etc )Thanks
    Roger

    Comment by Roger — November 5, 2013 @ 8:19 am

  3. here is one that should be on your watch ACN video

    ASHER RESOURCES PROPERTY TOUR

    In the YouTube link below you will find the property tour I did of the Asher King property.

    I invested considerable travel time and subsequent editing to bring this to you. Currently there are 52 subject marks and ¼ of those people posting. If you like what you see compliment my efforts by recommending this post and joining the conversation. This is for your benefit and you don’t have to be part of some secret society to view it.

    I am an arm chair rock hound at best and tried to view and shoot in this video in my own personal style while trying to figure out the puzzle and keeping you entertained with quick interesting progression.

    I’m very impressed with this property and the indicators that show for gold and copper. I am looking forward to Ashers results as they work to figure out this system and track down a potential discovery.

    Enjoy

    Comment by Heinz44 — November 5, 2013 @ 9:31 am

  4. Bert, not sure if you’ve seen the latest with Rob Ford, but he just announced that he smoked crack, but he’s not an addict! Lol

    Comment by Paul — November 5, 2013 @ 10:23 am

  5. Paul

    I hope i have shown, over the period of time that
    i have been with BMR., that i have tried to be an
    honest poster, now i will tell an honest story. I
    was at a trappers meeting, with approximately 12
    in attendance. Someone had some marijuana & passed
    it around, so that everyone could have a puff, but
    would you believe, that i was the only one, who refused
    the take a puff, now ,are the folks, who tried it for
    the first time, to be considered addicts ? i don’t think
    so.. Anyway, back to Mayor Ford, if he tried it once &
    that is a true statement, he should not be considered
    an addict, but he is a liar, because he claimed he never
    ever tried crack. R !

    Comment by Bert — November 5, 2013 @ 11:06 am

  6. True Bert, but there is a huge a difference between taking a puff of marihuana and crack. There is no such thing as a casual user of crack and if anyone has ever told you that, then they’re not being honest.

    Comment by Paul — November 5, 2013 @ 11:39 am

  7. Paul

    I was not comparing marihuana with crack, my point was, if you do it
    once, you are not an addict. You say there is no such thing as a casual
    user of crack, there you go, i have no idea. I don’t swear, smoke or
    drink, ##xxo##xo##, i believe i left my pipe at the tavern. R !

    Comment by Bert — November 5, 2013 @ 1:11 pm

  8. bert… thx for your comments re JAG mining… appreciated.. have been disengaged for a few days… just makes no sense to me.. i will report what I find.:)

    Comment by Jeremy — November 5, 2013 @ 1:32 pm

  9. A short video from RBW

    “Rainbow Resources Inc. – Gold, Silver, Graphite Exploration in British Columbia and Nevada”

    Comment by Sylvain — November 5, 2013 @ 5:25 pm

  10. Thankyou, Sylvain!! I heard the word”survive”,…hope they do.

    Comment by Greg J. — November 5, 2013 @ 6:13 pm

  11. Thanks Sylvain.
    The three of them sure look tired. They say that they will do some drilling and some sampling on their graphite property. They also claim that they will survive as an entity.

    Comment by Alexandre — November 5, 2013 @ 6:37 pm

  12. Hi Jon, any comments on RBW video. Thanks

    Comment by Alexandre — November 5, 2013 @ 7:59 pm

  13. Lol , thanks for the laugh Bert.

    Comment by Paul — November 5, 2013 @ 8:07 pm

  14. PGX has really bombed hasn’t it?

    Comment by OldManWinter — November 6, 2013 @ 3:59 am

  15. Dirk delivered a fantastic presentation on the Sheslay yesterday at the Geological Survey of Canada office, mainly to a geological audience (few investors in attendance at this presentation, but they are working on lining up presentations for investors/brokers). We recorded yesterday’s event. Based on a large amount of evidence presented, from the PGX drill hole data to historical drill holes, and the soil, airborne and IP work that PGX carried out this summer, they are well on their way to defining a major deposit at the Sheslay comparable to others in the Stikine Arch, in our view and in the view of geologists in attendance yesterday. In terms of grade, Sheslay is looking even better than Schaft Creek. Geochem and other data are showing continuity from the Star to other targets at the Sheslay, which is important as that is what will build tonnage. Hopefully a few more people will part with their shares at these prices over the next few days. We’ll review Dirk’s presentation at BMR Monday. I love the fact the stock is sitting where it is right now. Enough said.

    Comment by Jon - BMR — November 6, 2013 @ 4:27 am

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