Gold is taking a hit today, not surprisingly, after failing to push through resistance yesterday…as of 7:45 am Pacific, the yellow metal is down $72 an ounce to $1,802…for an understanding of this, we once again refer our readers to John’s chart that was first posted Sunday in our Week In Review and again Monday in a separate article on Gold…yes, the fundamentals for Gold remain extremely bullish but technically it’s overbought at the moment and this requires a period of consolidation to set the stage for a push to $2,000 and beyond which we believe is likely to occur during the fourth quarter…
Chart Comments: The “Big Picture” of the Gold price shows there has been a lot of volatility during the past 4 weeks since it broke above the inner resistance channel line. The price reached a new resistance level, retraced and is now attempting to reach the previous high.
Over the immediate to short-term, I’m cautious with regard to the Gold price. The RSI shows Gold very overbought and the price gradient since July1 is clearly unsustainable. Last week’s volume dropped slightly and the buying pressure remained constant. The +DI component of the ADX trend indicator peaked at a very high level around 50 and has since retraced and created a divergence with price. This is very significant because +DI measures how strongly the price moves upward. The inner resistance channel line is now support, so if the expected retracement and consolidation breaks below this line the Gold price could easily retrace to the channel support line (green).
– John, Sept. 4
If indeed John’s analysis proves correct, and he has been extremely accurate regarding Gold, then the coming weeks could provide some incredible opportunities with regard to the producers in particular that have jumped significantly since mid-June…we doubt they’ll drop a lot but certainly enough to make them more attractive than ever…overall, the TSX Gold Index is looking very bullish and any move down to about 400 or so (from yesterday’s close of 440) will present a Golden buying opportunity in our view…any weakness is a gift…making big money in the market often requires having the courage to buy when others are selling (and of course vice-versa)…
Silver is off $1.20 to $40.76, Copper is up 8 pennies to $4.13, Crude Oil has added $2.37 to $88.39 while the U.S. Dollar Index is off one-tenth of a point to 75.75…the greenback has strengthened recently but certainly hasn’t broken out in any way, at least not yet…below is a quick chart update from John on the U.S. Dollar Index…
The Dow and the TSX are both higher today but the CDNX has slipped 7 points to 1783 as of 7:45 am Pacific on the drop in Gold…despite the volatile markets recently and the reluctance of many investors to embrace a lot of risk, some of the juniors continue to do extremely well which proves an important point: There is always money available looking for a home in the best plays in this very selective market…on a bad overall market day yesterday, for example, Visible Gold Mines (VGD, TSX-V) was up 2 pennies to 37.5 cents…it has some great projects on the go and will continue to do very well in our view…another one of many examples is Spanish Mountain Gold (SPA, TSX-V) which hit a new all-time high yesterday of 84 cents…we’ve been following SPA since last year and its Spanish Mountain Gold deposit in central British Columbia is low-grade but has robust economics with Gold at $1,500 or higher…the renowned Dr. Morris Beattie is leading a prefeasibility study for Spanish Mountain which is expected to be completed by the end of the first quarter of next year…if you’re a believer in higher long-term Gold prices, as we are, then Spanish Mountain should be a strong performer over the coming months…the share price has shown slow but steady progress and that trend is likely to continue, though SPA accelerated to the upside yesterday with a “breakaway gap” as it shot through resistance in the low ’70’s…as of 7:45 am Pacific, SPA is up 2 pennies at 80 cents…John updates the chart below based on yesterday’s 78-cent close…
Goldex Resources (GDX, TSX-V) has pulled back 2 pennies to 8.5 cents after releasing results from the remaining five holes of its 12-hole Phase 1 drill program at its El Pato Gold Property in Guatemala…each hole intersected zones of mineralization including an average grade of 15 g/t Au over 4.5 metres in hole #16…nothing spectacular in this morning’s results but the 12-hole program is a good start to proving up historical non-compliant resources at El Pato and potentially increasing them significantly…drilling starts at GDX’s El Arco Property in Mexico, a Gold-Silver target, next month…GDX remains an interesting play for the long-term and its market cap of $8.25 million is quite modest…Adventure Gold (AGE, TSX-V) is up 3 pennies to 54 cents, putting it slightly above its 100-day SMA for the first time since early July…we’re expecting news from two of AGE’s projects in the near future – Pascalis-Colombiere and Dubuisson…Pascalis is our favorite and we’re looking forward to reviewing it in more detail when we’re in northwest Quebec next week…Gold Bullion Development (GBB, TSX-V) is unchanged at 38 cents…what we suggest watching out for technically with GBB is a reversal in both the 50 and 100-day moving averages- that hasn’t occurred yet but it could be getting close (within a few weeks)…Colossus Minerals (CSI, TSX) reported outstanding results this morning from its 75%-owned Serra Pelada Property in Para, a province in northern Brazil, but the market was anticipating good numbers…SPD-113 intersected several ultra high-grade subzones within a continuously mineralized intercept of 74.40 metres at 31.17 g/t Gold, 3.02 g/t platinum and 6.78 g/t palladium in the central mineralized zone (“CMZ”)…these results confirm the continuity of and extend the high-grade CMZ in the first area to be underground bulk sampled in 2012…in addition, SPD-115 returned 11.65 metres grading 57.28 g/t Au, 6.58 g/t platinum and 7.66 g/t palladium…a detailed geochemical program is nearing completion on the entire concession package and new targets have been generated…more assay results are pending…CSI is fighting some technical weakness and went into retreat after touching $6.80 this morning (it has declining 50 and 100-day moving averages just above $7.00)…it’s currently down 3 pennies at $6.39 but this is a stock to keep on one’s radar screen for the long-term as we’ve mentioned before…
And on it goes….. GDX releases the remainder of the holes, and stock is down 20% NO SURPRISE there… I saw this coming yesterday with the rise and volume. GDX is now moving on to Mexico, but WHERE will the money come from to continue drilling in Guatemala? Is another financing in the works soon? Do they have money to drill a reasonable amount of holes in Mexico? Will BMR stay silent on GDX now that they have come up with nothing spectacular? I will say this about GDX, it will be a great trading stock for 2 weeks IF you can get it at .075 or less. It is amazing how BMR’s research keeps turning out duds! Oh ya but they are still hopeful on SD.v a 2 cents stock with home run potential!!!! How long has BMR been pumping GBB, and the ” Long Bars zone” only for it to not be able get over .40 cents.
Comment by john — September 7, 2011 @ 7:26 am
John (above comment 1) Can you please send us the link to your newsletter or website? I would like to see your portfolio of picks and compare.
Comment by P — September 7, 2011 @ 8:51 am
The GDX results were good without being spectacular. El Pato will be a high grade near surface mine and the company can now get to work on a 43-101. The very exciting El Arco project in Mexico is next to be drilled. I am up 25% on GDX and have no intention of selling for some time. On the other hand I am down 40% on the mighty VGN who seem to do absolutely nothing. John you would be better off giving your good buddy Tony a ring to see when he is actually going to get off his backside and earn his hefty salary rather than slating BMR. If I am right there will be a year end rally which will move all of these companies to hopefully fairly dizzy heights. And that definitely includes GBB who have the goods in the right place at the right time. Patience.
Comment by Patrick — September 7, 2011 @ 10:08 am
Patrick
agreed patience is the key
Comment by GREG H — September 7, 2011 @ 11:52 am
Above, john says: ” I saw this coming yesterday with the rise and volume” – since when are these bad things,please explain?
Comment by george — September 7, 2011 @ 1:14 pm
Hey John where’s the stock increase or better still the late breaking news in VGN.Tremendous amount of stock trading on VGN!
Oh I forgot you sunken all your money in SD.
At least 99% of the companies that BMR talks about have trading volume.Even if you had 10,000 shares of VGN and you wanted to dump at $.10 you wouldn’t get a taker,not even Tony.
Why don’t you tout VGN anymore?
Comment by John — September 7, 2011 @ 1:23 pm
GBB has another quiet trading with no changes – closed at 38 cents. My sixth sense prediction of this one will be mid 40s very very soon… BER has gone up 2.5 cents with low volume. Their recent private placement at 10 cents for 10 million shares + warrants seems to be low. They may have their own reasons… Anyways, we need to see volume in order to move this one up. TYP dropped 4 cents to 81 cents and it is getting close to 79 cents – my low buy price. GDX as I predicted earlier last week, buying point 8.5 cents and it touched that point. My sixth sense tells me that it can go back to 11 -12 cents if the volume continue to support that. GDX closed at 9 cents and I do not see that negative as most the placement shares have been cashed. A new group of players at a higher price. VGD as I mentioned last week – no worries, it will go above 40 and today just closed at 40.5 cents. It is not over yet and it has momentum to move up. NAR finally have some transactions and closed at 17 cents – up one cent. SD – still will not look at it if price is over 2 cents. SFF is not performed well recently and may go further down to 21 cents level.
Comment by Theodore — September 7, 2011 @ 1:51 pm
Good morning Bert, you’ve probably seen it but if not there is an excellent news release from DVV this morning to start your day! FTSE 100 & DAX green so far, VGD back into the 40’s and currently up +8% in Frankfurt! Have a good day. 🙂
Comment by Andrew — September 8, 2011 @ 3:43 am
What a piece of crap that GDX turned out to be!!! Shoulda paid att. to the CMF I guess,WOW!!!
Comment by dave — September 8, 2011 @ 7:17 am
I think the key with GDX is to be patient with it. It has been under a lot of selling pressure the last few months despite the climb from a nickel to 12 cents, but that’s got a lot to do with the 5-cent PP as we’ve indicated. Buying pressure does need to increase as John pointed out and there is obvious resistance at 12 cents. As far as the fundamentals go, they’ve got a good project in Guatemala and an interesting Gold-Silver play in Mexico which they will start drilling in October. The market cap is quite modest. So it should hold support and ultimately could do very well. It is more speculative than some other situations we’ve been highlighting recently such as AGE and VGD which have more advanced projects and more cash.
Comment by Jon - BMR — September 8, 2011 @ 8:10 am