August 5, 2010
Gold is slightly weaker this morning, down $3 an ounce to $1,193 as of 8:20 am Pacific…the CDNX, which has been up 10 of the last 11 sessions, is off 2 points to 1452…a slight pullback to around 1425 to test the 50-day moving average is certainly possible, but this is a strong market that should only get stronger in the weeks ahead…the overhead resistance at 1500 and slightly above is significant but the market should be able to overcome this by sometime in September if not a little sooner…we’re so bullish on the CDNX based on a number of technical and fundamental factors, and the 2010 chart is so strikingly similar to that of 2004 when the CDNX also bottomed in July and moved 25% higher by year-end…Gold Bullion Development (GBB, TSX-V) is up a penny to 58 cents…the shares from the April financing that officially become free trading Monday are not a big concern for us…the market soaked up the 7 cent private placement stock from December like a sponge in April and May with little downside effect…realistically, some investors will certainly sell their 21.5 cent stock (some may have done so already through a short selling technique) and “ride” the 30-cent warrant…but there will be plenty of buyers around with assays from the eastern zone expected soon…we have every reason to believe, as pointed out yesterday, that Gold Bullion may indeed pull out a few “monster holes” in the east that will take this very compelling geological story to a whole new level…those who are trading their positions need to understand the possibility exists that they could wake up one morning soon to a halted stock and a serious gap-up if GBB indeed hits a “sweet spot” in the east…out of 27 holes in the east that were described in general terms in the last news release, there’s a strong chance that at least some of them are outstanding based on the visuals and what we know so far about the geology in that area…
