Positive gains for Gold, Platinum & Palladium | Carpathian Gold is Stock of the Week
Gold, Platinum and Palladium all posted positive gains for the second straight week while Silver continued to be the weakest of the group. $1300 and $20 continue to be walls of resistance for gold and silver, respectively. Until these are broken it remains difficult to be bullish for more than just a short-term trade. Next week, we will look for gold to break through $1300 and test upper resistance targets at $1321, $1337 and $1350. Noteworthy is the 50-day moving average at $1341.69.
Gold Yearly Chart 2013
Platinum also has an interesting setup closing just below the 50-day moving average of $1434.04. Resistance is at $1450, but upon clearing that it is relatively smooth sailing through to upper resistance targets of $1505 and $1528.
Platinum Yearly Chart 2013
The TSX-Venture showed impressive strength this week and hit our target of 920 from last week’s Weekly Trends. The RSI is at 58.97, which is the highest it has been since January 23rd 2013, while On-Balance-Volume continues to build and is trying to break its downtrend since the beginning of the year. Next week is quiet on the economic data front, which should eliminate useless daily headlines regarding potential QE tapering.
The Gold Bugs Index ($HUI) has made a series of higher lows on the daily chart and its first hurdle will be the 50-day moving average of 247.67. The 50-day moving average has not been broken this year so a move above this level would be extremely bullish.
This week we take a look at an emerging gold producer in Brazil called Carpathian Gold (CPN.T). The stock is trading at a 52-week low and we are bottom fishing here as production is expected to commence by the end of Q3. When up and running the mine is expected to produce 100,000 ounces per year. Construction was 80% complete at the end of May. Carpathian was fortunate to hedge over 216,000 ounces of future production at $1600/oz.
Carpathian also owns the Rovina Valley Project (RVP) in Romania, which should have a pre-feasibility study released this year. The project contains a resource of 7.2 million ounces of gold and 1.4 billion pounds of copper. The goal is to generate cash flow from their mine in Brazil and then start construction of the RVP project. Carpathian hopes to grow to become a mid-tier gold producer of over 500,000 ounces a year by 2018.
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