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March 22, 2012

BMR Morning Market Musings…

Gold has fallen to a two-month low this morning due to a combination of factors including a stronger greenback…almost half of jewelry stores in India remain closed, which is not helping the yellow metal, as owners protest against higher taxes…as of 5:45 am Pacific, Gold is off its lows but down $12 an ounce to $1,638…barring an intra-day turnaround, which is certainly possible, a test of the $1,600 can’t be ruled out as this consolidation continues but draws closer to an end…Silver is off 34 cents to $31.83…Copper has lost 6 cents to $3.77…Crude Oil is $1.32 lower at $105.95 while the U.S. Dollar Index is up one-quarter of a point to 79.83…

Today’s Stock Markets

Asian markets were generally in positive territory overnight but European shares have retreated over 1% this morning after weak U.K. retail sales and the German “flash” manufacturing survey that showed factory activity in Europe’s biggest economy unexpectedly contracted in March…as of 5:45 am Pacific, Dow futures are off about 60 points…futures remained steady in negative territory after release of jobless claim data at 5:30 am Pacific that was better than expected…new claims for unemployment benefits dropped to a fresh four-week low last week as the U.S. jobs market recovery continues to gain traction…the TSX Venture Exchange closed up 7 points yesterday at 1578…on the daily chart, the Slow Stochastics(14) indicator is approaching levels not seen since mid-December which suggests the Index is close to an important low…

China Developments

China’ factory activity in March shrank for a fifth straight month, leaving investors fretting about the risks to global growth and anticipating fresh policy support from Beijing…the HSBC flash purchasing managers index, the earliest indicator of China’s industrial activity, fell back to 48.1 from February’s four-month high of 49.6…new orders sank to a four-month low, an expected rebound in export orders failed to emerge and new hiring slumped to a two-year low…

Meanwhile, Chinese consumer stocks saw relative strength today with the mainland’s Ministry of Commerce research institute saying that consumption would overtake investment as China’s biggest driver of economic growth in 2012 for the first time in more than a decade…China has also boosted rural credit by cutting reserve ratios for more branches of Agricultural Bank of China Ltd., the nation’s third-biggest lender by market value…this is a marginal and targeted easing aimed at encouraging more lending in rural areas and to smaller businesses…

Kirkland Lake Gold (KGI, TSX)

Below is an interesting chart of Kirkland Lake Gold (KGI, TSX) which serves as an excellent example of how so many Gold stocks are intensely oversold at the moment…take a look at the RSI(14) on this 5-month daily chart from John…KGI, which gained 41 cents yesterday to close at $13.80, fell below its 500-day moving average this week (it hit a low of $12.91 Tuesday) for the first time since this long-term SMA reversed to the upside in mid-2010…folks, when you see a chart like this you know an important bottom has been put in or is very close…

Note: John, Jon and Terry do not hold positions in KGI.

Another interesting chart (at the request of a reader), and a company which we’ve pointed out before, is Argex Mining (RGX, TSX-V) which recently transitioned from an exploration company to a near-term producer of titanium dioxide, iron and vanadium pentoxide…John’s chart below shows a very pronounced “cup” pattern though the right hand side of the cup is not yet complete…the stock is in overbought territory but potentially could climb some more before the handle starts to form…

Note: John, Jon and Terry do not hold positions in RGX.

Abcourt Mines (ABI, TSX-V)

Abcourt Mines (ABI, TSX-V) has just released drill results (5:50 am Pacific) from the western part of its Abcourt-Barvue Silver-Zinc Property near Val-d’Or, beyond any of the previous drilling…hole AB11-71 intersected 8.5 metres grading 388.45 g/t Ag and 3.02% Zn…given the location of this hole, not to mention the nice widths (true width is about 80% of core length) and grades, Abcourt is most certainly on track to discover additional resources at this property…

13 Comments

  1. It’s nice to see the short positions have been cut by over 50 % but, from what i’ve seen, a stock won’t move forward until the majority have been covered. Time will tell.

    Comment by Richard — March 22, 2012 @ 6:26 am

  2. any support for the venture around 1000?

    Comment by heath — March 22, 2012 @ 7:24 am

  3. anyyone with any comments on t.wef? chart looks good and is at the bottom of a nice dip right now…

    Comment by db — March 22, 2012 @ 7:38 am

  4. This is not a pullback anymore on the juniors. This is already bigger.

    Comment by Steve — March 22, 2012 @ 8:51 am

  5. Steve,
    That’s how the money is made…buy when you are at the end of your rope, ready to sell!
    Cheers,
    Paul

    Comment by Paul — March 22, 2012 @ 10:01 am

  6. FMS is really starting to move today. An updated chart would be really appreciated. Thanks

    Comment by pete — March 22, 2012 @ 10:15 am

  7. Bought rgc at 60 cents a few days ago up 8 percnt yesterday up 4 percent today .How can I say this the train is about to leave the station.This rocket is about to blast off .Is it to late for my fellow investors to get on board .Time will tell .Target price 3.30

    Comment by gil — March 22, 2012 @ 12:43 pm

  8. Hi BMR,
    Now it is golden oppurtinity for you guys to give us investor better recomendations because most of the small gold producers share price are between 0,90-1,70CAD. Why dont you guys write about the golden oppurtinity in Orvana, Canaco, Avion, Golden Predator, Barkerville, Aurcana etc.?

    Brgds

    Comment by Peyman — March 22, 2012 @ 2:31 pm

  9. Rainbow Samples 1.6% Copper and 24.5 G/T Silver at Rhea
    “Moose Mountain did collect a total of eight rock samples from the Rhea Property, during some initial prospecting, which averaged 4.3 g/t Ag. One sample taken from an historic trench assayed 1.6% copper and 24.5 g/t Ag. Rainbow cautions that the grab samples taken by Moose Mountain may not be representative of mineralization on the property.”

    Comment by Andrew — March 23, 2012 @ 4:38 am

  10. Another hint of a second property from RBW:
    “We are continuing to evaluate opportunities to expand our flagship Big Strike Project in the West Kootenays,” stated Johnston, “in addition to adding a potential second project in North America that would give us year-round drilling capability. We are committed to making 2012 a pivotal year for this young company, and we look forward to providing additional details on our International, Tin City and President properties prior to month-end.”

    Comment by Andrew — March 23, 2012 @ 4:43 am

  11. I think that’s the “golden nugget” in this news, Andrew…….a “second project” in North America that provides for “year-round drilling capability”…very smart strategy….what that tells me is that RBW is looking at either Mexico or perhaps Arizona or of course Nevada, to complement the Kootenay Project…….the fact they’re doing an “information session” for “market participants” next Thursday at Bob Libin’s hotel in Calgary suggests to me that something big could be coming down the pipe……this gets more interesting by the week…..

    Comment by Jon - BMR — March 23, 2012 @ 5:31 am

  12. Peyman, we have written a lot about Canaco and Golden Predator, and we have also highlighted Barkerville…..in fact, I believe we’ve mentioned every one of those companies and at least a couple of them are on our “lists”….

    Comment by Jon - BMR — March 23, 2012 @ 5:35 am

  13. Just spoke with David Johnston. Sending out a BMR eAlert shortly.

    Comment by Jon - BMR — March 23, 2012 @ 8:02 am

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