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Gold is down $6 an ounce at $1,314 as of 7:30 am Pacific…Silver has retreated 24 cents to $21.91 (see updated Silver charts below)…Copper is up a penny at $3.24…Crude Oil is 61 cents lower at $103.45 while the U.S. Dollar Index is relatively unchanged at 80.25…

Gold producers will return to net hedging for the first time since 2011 this year, GFMS analysts at Thomson Reuters said Friday, after Polyus Gold – Russia’s largest producer – announced last week a two-year program to sell Gold forward…the company said that it had entered into financing contracts to sell 310,000 ounces of Gold over two years to boost the certainty in its cash flow and operating margins.  “The Polyus announcement means that net hedging for 2014 is now a foregone conclusion,” William Tankard, manager of precious metals mining at GFMS Research & Forecasts, said. “There is no scope in my view to see the activity announced outweighed by the ongoing run rate of hedging coming off.”

The Global Hedge Book Analysis released by Societe Generale and Thomson Reuters GFMS Friday showed Gold producers increased their hedged positions for the first time since 2012 in the first quarter…as of March 31, the hedge book volume stood at 87 tonnes, the report said, up 9 tonnes or 11% from the previous quarter…the hedge book peaked at over 3,000 tonnes in the third quarter of 1999, according to GFMS, the last year of net hedging before 2011…

Economists at HSBC are once again lowering their global growth forecast for 2014 as the world adjusts to new economic realities in the face of massive uncertainty…in a research note released July 4, and based on their report published June 28, the firm pointed out that economists have stuck to the old adage that growth will eventually return to its long-term trend as inflation hits central banks’ targets; however that has not been the case as economic growth has “been persistently lower than expected,” the economists said in the note, adding, “Either the post-crisis financial hangover is longer lasting than expected or the world economy has succumbed to a lower structural rate of growth.”  The international financial institution now expects global growth to hit 2.4% in 2014, down from their previous forecast of 2.6% and well short of the pre-crisis range of 3.5% to 4.0%.

Copper Updated Chart

Despite ongoing concerns among various analysts regarding the prospects for world economic growth, Dr. Copper and Dr. Venture are both suggesting the global economy is healthy enough to perhaps surprise to the upside during the second half of 2014 with plenty of demand for commodities…most central banks will be happy to see some inflation kick in, though they need to be careful about what they wish for…

On Saturday, we gave the latest “Big Picture” view of the Venture which is unequivocally bullish…below is an updated Copper chart…the metal is looking more bullish and has moved from a low of $2.88 in mid-March through resistance at $3.20…over the near-term, it’ll be interesting to see if Copper can form a base just above $3.20…a strong band of resistance exists between $3.30 and $3.40…

Today’s Equity Markets

Asia

Asian markets were quiet overnight…China’s Shanghai Composite gained half a point to 2060 while Japan’s Nikkei average slipped 58 points to 15379…

Europe

European markets are down modestly in late trading overseas…disappointing industrial output data from Germany for the month of May – the country’s industrial production index for May showed output fell 1.8% month-on-month…

North America

The Dow, which topped 17000 for the first time last Thursday, is down 42 points through the first hour of trading…the TSX has fallen 68 points while the Venture is off 1 points at 1037…

Venture-Gold 5-Year Weekly Comparative Chart

This 5-year Venture–Gold comparative chart shows how the Venture broke above its long-term downtrend line ahead of Gold late last year…as we’ve previously noted, the Venture’s out-performance vs. Gold over the last year has been a significant pattern change and historically has been a precursor to rising bullion prices…

What’s particularly impressive is the Venture’s RSI(14) uptrend – this market clearly bottomed in oversold conditions in the second quarter of last year, and a bullish new cycle is now firmly entrenched with a potential sharp acceleration of the uptrend possible over the next couple of months…

Garibaldi Resources Corp. (GGI, TSX-V) Update

Garibaldi Resources (GGI, TSX-V) has momentum and many other factors in its favor at the moment, and on Friday the stock hit a nearly 3-year closing high of 27 cents…this morning’s long-term GGI chart from John suggests the potential for a spectacular summer – certainly the fundamentals are lined up for that given developments on the ground in Mexico and what could unfold in the emerging world class Sheslay Cu-Au porphyry district…the Sheslay area should heat up again soon as more results start flowing in from several companies, including GGI, and activity ramps up further…

Importantly, GGI appears to be on the verge of a significant Silver discovery in Mexico, based on the most recent news (high-grade, near-surface, and potential scale at Rodadero North)…furthermore, GGI continues to exhibit the perfect combination of characteristics that are found only in a small percentage of publicly traded junior resource companies:

• Superb management and geological group with focus and determination
• Outstanding properties/”blue sky” potential
• Proven record of success
• Financial strength
• Highly favorable share structure with virtually no dilution in five years
• Market awareness and the ability to communicate

Yes, all of the above qualities are rarely found in a junior exploration company…these features separate the wheat from the chaff in this business, and investors who understand that point can build incredible wealth by selecting the right company…this sector is littered with junk – weak management, share structures that have been obliterated, etc. – but there are nonetheless exceptional opportunities at the moment…GGI is one of them in our view…its success on the ground is accelerating…the company has also developed a brand and is delivering on that brand…

When so many companies were running scared last year, GGI kept its feet moving forward and pounced on opportunities that have helped build shareholder value with tremendous growth potential still ahead…this company is being rewarded in the market for its forward thinking and its strategic and cost-effective use of technology to quickly and accurately pinpoint potential new discoveries…

We see an explosive third quarter unfolding for the Venture which is now undeniably in a bullish new phase…certain companies – Garibaldi being one of them – will be leaders in this environment and will significantly out-perform the market as they simply have all the right ingredients, the special characteristics described above…

Keep in mind, Garibaldi has no “cheap paper” holding it down…no significant financing has been carried out in over five years – essentially no dilution since early 2009 when GGI hit a home run and sold the Temoris option (a Silver discovery) to Paramount Gold & Silver…we see a strong possibility of more home runs for GGI in both Mexico and northwest B.C. that could translate into mind-boggling gains for investors…

Updated GGI Chart

GGI has staged a confirmed breakout above Fib. resistance at 25 cents and John outlines the next measured Fib. resistance levels to keep an eye on (those aren’t price targets, just theoretical levels based on Fib. and technical analysis)…this is a powerful-looking chart, and the bullish trend is intensifying as demonstrated by the ADX indicator…

Interestingly (this is not shown on the chart), GGI’s 1,000-day moving average (SMA) is now reversing to the upside after a decline that started in late 2008…history shows, with other stocks, that that’s a huge technical development…it’s a signal that something very big could be in store for GGI as 2014 progresses…this train is on the move and gaining speed…

Highbank Resources Ltd. (HBK, TSX-V) Update

Highbank Resources (HBK, TSX-V) is an excellent position to take advantage of the potential boom in LNG projects in British Columbia (though Asian prices for liquefied natural gas have fallen to their lowest levels since April 2011) in addition to the current expansion of the Port of Prince Rupert as seen in the picture below…

We initially brought HBK to our readers ‘ attention in the spring when it was broke out above 15 cents, and it has gained nearly 50% since then after Friday’s 23-cent close…the company is moving closer to the production stage at its Swamp Point North aggregate project along tidewater near Stewart…

Technically, new support exists at 20 cents where there was previous Fib. resistance…this 10-year monthly chart shows two critical long-term resistance levels – 15 cents, which HBK overcame, and 35 cents…as always, perform your own due diligence…

HBK is unchanged at 23 cents as of 7:30 am Pacific…

Contact Exploration Inc. (CEX, TSX-V) Updated Chart

Calgary-based Contact Exploration (CEX, TSX-V) has been a stellar performer this year and remains one of our favorite junior oil and gas plays…CEX’s 50-day SMA – currently at 41 cents – has been a close supporting moving average since September of last year, so the low 40’s area is clearly attractive…a breakout has occurred above measured Fib. resistance at 38 cents, with the next Fib. resistance at 54 cents…

CEX is off 2 pennies at 44 cents as of 7:30 am Pacific…

Silver Short-Term Chart

This 6-month daily chart shows how extreme RSI(2) conditions persisted over nearly two weeks in June…RSI(2) is currently at a more moderate 66% but will likely need to unwind a little more…SS is also very overbought at 91.84…hence a mild pullback in Silver should be expected before the next major push higher…this view is also consistent with a recent sharp increase in commercial short positions…John has outlined three Fib. retracement levels – $20.33, $20.08 and $19.82…

Silver 3-Year Weekly Chart

Silver’s support band between $17.50 and $19.50 is like the 970 support area for the Venture – it will hold, and Silver has now boldly pushed above that support band…the $19.50 area should hold on any near-term pullback to cleanse temporarily overbought technical conditions…the $22 area is important resistance on this chart…

Early this year, Silver broke above a downtrend line in place since late 2012 on this 3-year weekly chart…similar to the Venture pattern during the fourth quarter of last year, Silver has found support at the top of this downtrend line…overall sell pressure has been in decline since early 2013…slowly but surely, the metal is on its way higher but expect the pattern to be a couple of steps forward, one step back…

Silver Long-Term Chart

This 11-year monthly chart confirms that the metal has exceptional support in the high teens…note that there are two downtrend lines on this chart – Silver has closed above one of those downtrend lines, but barely…expect more activity in the immediate vicinity of that downtrend line (now new support) before a decisive move above it at some point during Q3…

If and when Silver clears stiff resistance at $26, watch out – you’ll want to back up the truck and load up…

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