Gold has traded between $1,317 and $1,330 so far today?as of 7:15 am Pacific, bullion is off $3 an ounce as $1,324 as the 2-day FMOC meeting begins?observers do not expect Fed action as soon as tomorrow but the market will be scrutinizing the Fed statement for any change in language that offers a clue on when policymakers may decide to start scaling back the $85 billion per month bond-buying program?Silver is 7 cents lower at $19.78?Copper is off 6 cents at $3.05 after data showed that first-half expansions in most provinces in China missed targets, reinforcing concern about demand growth in the world?s largest consumer?Crude Oil is down $1 a barrel to $103.54 while the U.S. Dollar Index is up one-tenth of a point to 81.83?
The Commodity Futures Trading Commission weekly commitment of traders report (COT) for the week ended July 23 shows speculators continued to not only cover previously sold positions, but also established new bullish positions in Gold ? not surprising given bullion?s jump last week?after reaching a record high earlier this month, HSBC noted that Gold gross speculative short positions fell for a 2nd week to 16.5 million ounces from 17 million a week earlier??Further short covering for Gold speculative positions may help boost prices in the short term, in our view,? they said?managed-money accounts boosted exposure to Gold futures and options, increasing their net long position to 70,067 contracts, the highest since mid-March?commercials lightly added to their net short position?bulls need to conquer the $1,350 resistance level in Gold and it?s possible that a series of events, from the Fed meeting to Friday?s jobs report, could allow for that?since late June, a series of higher daily highs and lows have unfolded in the Gold chart?the upsloping channel remains intact with strong support at $1,320?check out this interesting 2-month daily chart from John?
Gold 2-Month Daily Chart
Will India?s Abusive Government & RBI Gold Policies Backfire?
India?s Finance Minister said yesterday the government would continue with its restrictions on Gold imports, following another recent surge in inward shipments of the metal?though imports were low in June, the tide appears to have turned again in July, Finance Minister Chidambaram told journalists yesterday?after moderating in the previous month, he said the high imports in July would force the hand of the government?some market participants believe that the demand for physical Gold in India is so powerful, that these abusive policies by the finance ministry and the RBI will simply not work as multiple legal (and in some cases illegal) alternatives are being discovered to circumvent these policies?when a government attempts to ban something or put curbs on it, especially in this case when the product (Gold) is not harmful to people and so deeply rooted in the culture of Indians, such efforts can often backfire?
Russia Pulls Out Of Potash Cartel
In an unexpected move that could transform the landscape of the fertilizer industry, Russia?s Uralkali is dismantling one of the world?s largest potash marketing groups by striking out on its own?Uralkali said it expects the move will result in the fall of global prices by 25%, and this is hurting potash producers and exploration plays in that sector as well this morning?the break-up of the Belarus Potash Company (BPC) leaves North America?s Canpotex as the ruling potash export venture?BPC and Canpotex had accounted for 70% of global trade in potash, an important ingredient for fertilizer, and the duopoly had set identical prices in key markets such as China and India?Uralkali said it was pulling out after reaching ?deadlock? over sales and would export all potash via its Swiss-based Uralkali Trading?reports say the decision may lead to a fall in the global potash price to below $300 per ton in the 2nd half of 2013, from the current $400 per ton?lower fertilizer prices could result in rising demand from price-sensitive farmers in Asia, however?
Copper Theft Like ?An Epidemic? Sweeping U.S.
CNBC reported this morning that Copper is such a hot commodity that thieves are going after the metal anywhere they can find it: electrical power stations, middle-class homes, construction sites ? you name it?on a Utah highway construction site recently, crooks managed to abscond with 6 miles of Copper wire?Copper theft has become at least a $1 billion business in the U.S., and it?s a growing problem in Canada as well??There?s no question the theft has gotten much, much worse,? said Mike Adelizzi, president of the American Supply Association, a nonprofit group representing distributors and suppliers in the plumbing, heating, cooling and industrial pipe industries??There was a perception that Copper theft slowed down after the recession, and the rise in commodity prices seemed to ease off,? he said??But that?s not the case?The theft has only been growing??
Today?s Markets
Asian stocks rebounded overnight after China?s central bank injected funds into money markets for the first time in nearly half a year, while the Japanese yen weakened ahead of key global central bank meetings this week?China?s Shanghai Composite climbed 14 points to close at 1990 (key support is around 1950)?seeking to stave off a repeat of the cash crunch that blighted the economy in June?the People?s Bank of China pumped $2.8 billion U.S. into the money market via 7-day reverse repurchase agreements today, the first time it has conducted that kind of liquidity injection since February 7?the amount was relatively small but its intent to prevent cash rates from drifting too high was clear, and the impact was immediate?the 7-day bond repurchase rate, a key gauge of short-term liquidity in China, fell 14 basis points to 4.98%?Japan?s Nikkei average jumped 209 points or 1.5% to finish at 13870?
European shares are modestly higher in late trading overseas after a mixed bag of earnings reports and fresh economic data released from the euro zone?economic sentiment data showed a rise to 92.5 in July from 91.3 in June, in numbers released by the European Commission that were essentially in line with expectations?German consumer confidence has risen to its highest level in nearly 6 years?a cover story in Barron?s last week reported on the economic turnaround that?s underway in the euro zone?
In North America, the Dow is up 41 points as of 7:15 am Pacific?the TSX, thanks in parts to weakness on the potash front, is down 104 points?the Venture, meanwhile, has retreated 4 points to 921?Pacific Potash Corp. (PP, TSX-V), which has been such a great performer since early this summer, is off 2.5 cents to 15 cents?Encanto Potash Corp. (EPO, TSX-V) is also hurting, down a nickel at 20 cents?blame the Russians?it?s not a regime that can be trusted?
Zenyatta Ventures (ZEN, TSX-V) Updated Chart
Red-hot Zenyatta Ventures (ZEN, TSX-V) has cooled off and fell as low as $4.05 in early trading today?it has recovered to $4.36 (down 29 cents) as of 7:15 am Pacific?its 10-day moving average (currently just below $4.50) has provided superb support over the past month?below is an updated 2-month daily chart from John?the $4.50 Fib. target was obviously exceeded (ZEN hit an all-time intra-day high of $5 last Friday) and the stock closed yesterday at $4.75 before plunging this morning?a negative divergence between price and RSI may have been a cause for concern among some investors who closely monitor the technicals, and the ADX indicator has shown some weakening of the bullish trend?but there?s a lot of firepower behind ZEN given the apparent strength of its graphite project, the highly effective branding of this play and the very positive perception of ZEN in the market given the company?s ability to execute in all areas?the 10-day SMA (referred to earlier but not shown in this chart) and the up trendline (currently $4.22 as you can see in the chart) both provide excellent support on a closing basis?$3.75 is another very strong support area?
Macro Enterprises Inc. (MCR, TSX-V)
A company with some ?ZEN-like? qualities we?ve been following quite closely over the past couple of months (it?s up nearly 40% since we introduced it to our readers) is Macro Enterprises (MCR, TSX-V) which is one of the few Venture companies making a profit?MCR hit another fresh all-time high yesterday of $4.39?MCR, which is headquartered in Fort St. John, B.C., and provides construction and maintenance services to the energy and resource industries, reported Q1 earnings May 22 of 40 cents per share?so it?s not hard to understand why there has been heavy accumulation of this stock going back to last summer actually, but many speculative investors in the junior exploration space have overlooked this particular opportunity with a simple story?perhaps it?s just because the idea of a Venture company actually making money is so foreign to most of us?below is an updated MCR chart from John?note the Fib. level ? not a price target, just a theoretical level based on Fibonacci and technical analysis?as always, perform your own due diligence?
Teuton Resources Corp. (TUO, TSX-V)
Back now to the speculative exploration side which we all so enjoy?an overlooked situation that?s certainly worthy of being on our readers? radar screens is Teuton Resources (TUO, TSX-V) TSX-V) which has been around since the days of Billy The Kid?we?ll be following Teuton closely this summer given the increased interest in Gold/Copper opportunities in British Columbia?while it doesn?t have a position in the critical Sheslay River area, where Prosper Gold (PGX.H, TSX-V) and Garibaldi Resources (GGI, TSX-V) are dominant (more on that tomorrow), Teuton is nonetheless a huge landholder in northwest B.C. with about 300,000 acres?this includes the Yellow Chris claims a few kilometres northeast of Colorado Resources? (CXO, TSX-V) North ROK discovery?Teuton recently cut a deal with Red Hill Resources Corp. (RHR, TSX-V), giving Red Hill an option to acquire up to a 60% interest in one of Teuton?s several claim blocks at Yellow Chris?
What we?d particularly like to draw our readers? attention to is the fact that Teuton has commenced fieldwork at its Stewart-area mineral properties?that news was announced last Wednesday?Teuton has started a program of prospecting and rock sampling has begun on the King Tut zone, located at the northern end of its High property, approximately 50 km north of Stewart in the famous Golden Triangle region?the King Tut lies 150 metres south of the border between the High property and Pretium Resources? (PVG, TSX) Brucejack-Snowfield Property, the latter featuring the exceptionally high-grade Valley of the Kings zone?in case you missed it, Pretium announced July 23 the discovery of another high-grade structure (Cleopatra Vein) from which 1 drill intersection returned 5.8 metres (19 feet) grading an incredible 2,567 g/t Au (75 opt)?the Valley of the Kings hosts huge high-grade reserves (15.1 million tonnes grading 13.6 g/t Au, 6.6 million ounces)?
In 2012, Teuton drilled a hole running 0.88 g/t Au over 222 metres on its High Property which it has held onto for 27 years?recently, ?climate change? (whatever you want to call it) has begun to melt permanent ice and snowfields, exposing virgin ground?the 2012 appearance of one such exposure led to the discovery of Teuton?s new King Tut zone, so there?s plenty of potential here?it?s right on geological strike of course with Pretium?s Brucejack-Snowfield as you can see on the map?
Technically, TUO is currently in a horizontal channel, establishing a base between 8 cents and 12 cents?below is a 5-year monthly chart from John?sell pressure has been dominant since April, but that doesn?t concern us as that can often be the best time to start accumulating?RSI(14) is near long-term support and has flattened out?TUO closed yesterday up a penny at 9 cents on light volume?
Dynasty Gold (DYG, TSX-V) Update
Dynasty Gold (DYG, TSX-V) perked up yesterday, climbing half a penny to close at 2 cents?Dynasty has a very interesting property (the ?Strike?, acquired last year) about 20 km north of Stewart and the company is gearing up for a summer drill program to test some promising structures?Dynasty has spent the last several months compiling some of the historical drill data into cross-sections and 3-D views?this effort, along with geological maps, geophysics reports and other information, has highlighted some major areas of interest, especially over the northern part of the property where very limited historical drilling has occurred?the volcanics at depth have never been adequately tested anywhere on this property, and that?s what Dynasty plans on doing this summer?check out the company?s news release from November 21 last year for more details on their field program that returned some highly encouraging results?
Below is a 2.5-year weekly chart?RSI(14) is trending higher and the stock has mostly been under accumulation since last October in a range between 1.5 cents and 4 cents?
Note: John and Jon both hold share positions in DYG and GGI. Jon also holds a share position in TUO.
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