August gold futures are trading $1772 as I type these words. Meanwhile, a weekly close above $1775 would all but give final confirmation that gold is breaking higher from its recent two month trading range ($1675-$1775):
A MACD bull cross and Daily-RSI(14) turning higher from the median line offer strong clues that this gold breakout could be a powerful one. In addition, we saw a broad rally across the gold mining sector yesterday with the GDXJ up roughly 5% and many individual junior mining stocks up double-digit percentages on the trading session.
I must say that it feels like this breakout is the real deal. If gold thrives on macro uncertainty and volatile environments then the current macro backdrop couldn’t be a more positive one for gold. Everything is lined up both fundamentally and technically for gold to blast higher as the summer officially begins.
Turning to the junior mining sector we continue to receive a steady dose of news flow as companies get their summer exploration programs underway and other companies report results from drilling that has already been underway:
Canada Nickel – Canada Nickel Drills .42% Nickel Over 306 Meters
A significant infill hole drilled at Canada Nickel’s Crawford Project near Timmins, Ontario. Crawford continues to get better and better as CNC continues to drill this resource out.These early results highlight the potential of the higher-grade core in the Main Zone at Crawford. I couldn’t be more pleased with how fast this company is moving ahead. Expect an updated resource by the end of July followed by a maiden PEA by the end of 2020.
Ero delivers one of the best copper drill intercepts i’ve ever seen. Ero continues to have success in demonstrating high-grade continuity and wide-open potential at depth within the ‘Superpod’ discovery below the known extent of the Pilar Mine.
Skyharbour continues to discover new high grade uranium mineralization in the underlying basement rock at the Maverick corridor while significantly expanding the Maverick East Zone. Planning is currently underway for a 2,500 meter summer diamond drilling program to commence later in the summer. The program is fully funded and permitted.
Victoria Gold is picking up right where it left off last season as it continues to define the high-grade Raven target. The 2020 Raven drill program will extend drill coverage across a broad, more than 1.5 square kilometer coincident gold, arsenic and bismuth-in-soils anomaly that was first defined from 2018 soils geochemical sampling and then expanded (by over 500 m2) from 2019 soils surveys.
Finally, I think it’s worth pointing out the widespread divergence in year-to-date US equity market performance:
Nasdaq 100: +16%
S&P 500: -3%
Dow Industrials: -9%
NYSE Composite: -14%
Russell 2000: -14%
Dow Transports: -17%
Simply stated, without mega-cap tech this stock market would look a heckuva lot worse than it does. With industrials and transports displaying a wide negative divergence relative to tech, I can hear famed Dow theorist Richard Russell (R.I.P) shouting from the rooftops that we have a Dow Theory sell-signal.
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