Weekly Trends: June 22, 2013

Gold Update, Market Commentary, and Barkerville Gold

Commodity Talk

Investors scrambled for the exits late Wednesday and all day Thursday after the US Federal Reserve indicated that as economic conditions continue to improve they would begin to slow central bank stimulus. Gold in particular was extremely volatile falling nearly $100/oz as inflation and economic worries faded. The $1320 low from April failed to provide any support as gold accelerated through $1300, closing at $1280.The next area of major support is the old breakout from September, 2010 at $1250. A floor could occur in the $1250 area for reasons other than just price action. $1250 represents a rough level for gold miner production costs.

Gold prices plummet following QE tapering rumours
Gold prices plummet following QE tapering rumours


The mining intensive TSX Venture that has been bleeding lower for weeks was crushed on Thursday, breaking below 900 points for the first time since 2009. Volume has been on the light side for months now and Thursday’s action was not accompanied by capitulatory volume. Unfortunately, this means more selling is likely on the way heading into summer and Q2 earnings season. Very few miners will be able to show strong profit margins selling gold at $1400, never mind $1250. The 2008 low at 680-700 points remains our downside target.

TSX Venture hits 52-week low

TSX Venture hits 52-week low


barkerville-goldBarkerville Gold is back in the spotlight this week after finally releasing an updated resource estimate on the Cow Mountain project. Barkerville shocked the market last year on June 28th of last year with the headline: Barkerville Announces a NI 43-101 Compliant Indicated Resource of 10,626,100 oz’s Gold on Cow Mtn with a NI 43-101 Compliant Geological Potential of 65 – 90 Million oz’s Gold in an Area Encompassing Approximately 10% of its Cariboo Gold Project. This immediately caught the attention of the British Columbia Securities Commission and the stock has been suspended from trading for the last year. The revised estimate shows a resource of 4.98 million measured, indicated, and inferred ounces. Barkerville stock remains halted as the BCSC overlooks the technical filing.

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