The Daily Chart

The daily chart gives us an indication of just where the price can wind up without any significant buying in the market, based solely on the technicals. Normally a corrective phase will see the 200 day MA. The snap back rally still has virtually no accumulation or money flow into the stock. It has yet to come, but I expect that we'll see the 45¢ level even as we are still below the 300 day MA.

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stockcharts.com

$IRX

The discount rate has been stabilizing in the 0.005% area, or dipping into negative interest rates. This is probably the most important fundamental going forward, as gold itself has no interest rate and will not cause an obligation to pay for holding it.

Moreover, a negative interest rate will make price arbitrage in mining stocks like GBN.V impractical. The decimal point in the chart is misplaced one over to the right, but should read: 0.005%, not 0.05%.

If the arbitrageurs in the venture exchange index are no longer able to lower prices in gold mining stocks, and no longer able to parry their gains in a rising stock market, then they are obliged to settle every last share they sold without owning them.

This is all done by computer, but the discrepancies between base metals stocks and gold stocks will become apparent, and the commercial banking sector will have to throw aside the assumptions used in computer trading, roll up their sleeves and deal with each stock on an individual basis.

One thing the sell side broker will not be able to conjure up is a justification for flying in the face of the fundamentals any longer and double down their deranged bet against gold mining stocks as they had in the new year.

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Gold/Silver ratio

What should become apparent, then, is some differentiation of GBN.V stock with the venture exchange index, that it should perform more along the lines of gold mining ideces appreciating against the gold price.

The gold/silver ratio has been oversold as well, so some advance of the gold price vs. silver should be in the cards.

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Rumour

When there aren't any good rumours going around, you may as well start one. Zerohedge reports that Sprott will be adding more gold to their physical gold closed end fund. Now, Sprott had engaged in a gold based financing scheme for the startup of the Roy Lloyd mine, it would not be a far stretch to say that Sprott may be the backer for a pending mine expansion in La Ronge. They have to get the gold delivered, there is probably no recourse except to buy gold out of the mines.

Zerohedge

Technicals On The Canadian Dollar

Overparity of the Canadian dollar, much in the same way the Swiss Franc is nearing parity with the Euro suggests that Americans wary of the collapse of their own purchasing power may be seeking an investment in a stronger currency than their own.

Action Forex

Production Numbers From San Gold

stockwatch

Permitting Issues

The news media is presenting gold juniors being only a valid investment case should they be a target for takeovers, not whether the mining prospect makes a good investment. This has set up the market for very damaging pricing that favours takeovers.

Permitting issues are key to the GBN.V story, and at this time Environment Canada is blockading any progress on the La Ronge gold project and not answering any queries as to when they will be moving forwards on their broken promises.

http://business.financialpost.com/2011/07/12/european-goldfields-an-ma-target-after-permit-award/

ENGOs involved in the consultation process on the Mallard TIA:

http://www.cen-rce.org/eng/consultations/consultations_in_progress/08_04_MMER.html

Gushing News Media On Gold

http://www.thestar.com/business/article/1024480--gold-on-a-record-breaking-roll

Frank McGhee, BNN.ca

http://watch.bnn.ca/#clip499950

John Ing, BNN.ca

http://watch.bnn.ca/#clip501235

-F6