Gold prices fell back towards $1230 an ounce Thursday morning in London, having ticked higher in earlier Asian trading, as stocks and commodities were little changed on the day and the Dollar was also flat after showing little reaction to yesterday’s downward revision for US economic growth. 

Gold in Euros traded as low as €940 an ounce this morning, with gold in Sterling dipping as low as £802 an ounce. Silver meantime was trading around $18.71 an ounce by lunchtime in London.

“[Bullion] markets are still susceptible to the downside, but all in all, I feel that for the moment we have done enough,” says David Govett, head of precious metals at broker Marex Spectron.

Gold in Dollars has lost 23% during the current quarter, which ends tomorrow. Going by London Fix prices, gold is on course for the biggest quarterly loss since at least 1968, the year that the London Gold Pool collapsed.

“For investors to come back in droves, we will need to see some consolidation in prices and a return to an upward trending market,” one Hong Kong-based trader told newswire Reuters this morning. “Investor sentiment is still quite sour right now.”

Dutch bank ABN Amro cut its year end gold price forecast to $1100 an ounce Thursday, a cut of 15%.

“There is no reason to hold precious metals,” reckons the bank’s FX and commodity analyst Georgette Boele. “The outlook for capital gains [is] dim and they pay no income.”

Over in India, the biggest source of private gold demand worldwide, premiums on physical gold – calculated as the amount buyers pay over and above the spot price – jumped Wednesday as the gold price fell, local dealers report.

“We are unable to supply, though there is demand,” says Harshad Ajmera at wholesaler JJ Gold House in Kolkata.

Other Asian dealers however report that the recent price drop has not been met with the kind of surge in physical demand that was seen in April.

The US economy meantime grew at an estimated 1.8% annualized rate in the first three months of 2013, official figures published Wednesday show. US gross domestic product growth was revised lower from the previous estimate of 2.4%.

“The revision should imply that the Federal Reserve will likely delay the rollback of its bond buying program, a variable that should be theoretically bullish for gold,” says INTL FCStone metals analyst Ed Meir. “Instead, the release fell flat in terms of impact [on the gold price].”

In contrast with gold, US stock markets rallied yesterday following the downward revision.

“Whenever there is good news out of the US it will cause selling because people see it as a confirmation for Fed tapering [i.e. slowing the pace of asset purchases],” says Daiwa Securities economist Tobias Blattner. “If we have something more disappointing like yesterday people will say, ‘Well OK, it won’t happen yet’…that, unfortunately, is the kind of volatility that is going to continue for the next couple of months.”

Across the Atlantic, the estimate for annualized UK GDP growth for the first quarter was also revised lower, figures published Thursday by the Office for National Statistics show.

Sterling fell to a three-week low against the Dollar following the announcement, dropping below $1.53.

“Some people were expecting an upward revision and that didn’t happen,” says Jane Foley, senior currency strategist at Rabobank in London.

NEWS RELEASE. 

June 25, 2013: Montreal, Quebec – Stornoway Diamond Corporation (Stock Profile – TSX:SWY) confirms that strike action taken by the Alliance of Unionized Construction Workers of Québec has been settled with respect to construction activities related to civil and earth works in the province. The limited interruption that this strike action caused to construction activities on the Renard Mine Road is now over, and its impact on Stornoway’s overall development schedule is expected to be negligible. The Renard Mine Road continues to progress on schedule and within budget.

About the Renard Diamond Project

The Renard Diamond Project is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Québec. In November 2011, Stornoway released the results of a Feasibility Study at Renard, followed by an Optimization Study in January 2013, which highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life.

Probable Mineral Reserves as defined under National Instrument (“NI”) 43-101 stand at 17.9 million carats, with a further 17.5 million carats classified as Inferred Mineral Resources, and 23.5 to 48.5 million carats classified as non-resource exploration upside. All kimberlites remain open at depth. Pre-production capital cost stands at an estimated C$752 million, with a life of mine operating cost of C$57.63/tonne giving a 67% operating margin over an initial 11 year mine life.

To learn more about Stornoway Diamonds – CLICK HERE.

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NEWS RELEASE.

June 25, 2013: Vancouver, B.C. – Golden Arrow Resources Corp. (Stock Profile – TSXV:GRG) announces that, at its Annual General Meeting of Shareholders held on Tuesday, June 25, 2013, incumbent directors Joseph Grosso, Nikolaos Cacos, David Terry, and John Gammon were re-elected to the Board of Directors of the Company, and Mr. Louis Salley was elected as a new director. At the Meeting, Shareholders also approved the number of directors, approved and ratified the Company’s new fixed stock option plan, amended the Articles of the Company, and appointed PricewaterhouseCoopers LLP, as auditor of the Company.

Mr. Grosso stated, “I am extremely pleased to have Louis Salley join the board of directors. His experience and knowledge will be instrumental in assisting the Company. As Executive Chairman, I feel confident that Golden Arrow has a strong, experienced and knowledgeable board as the Company embarks on a new phase of growth and development.”

“On behalf of the board and myself, I would like to thank Messrs. David Horton, Len Harris and Chad Williams for their contributions to Golden Arrow. They provided invaluable advice and wisdom” stated Mr. Joseph Grosso.

Mr. Salley has over 30 years of Canadian and international experience as a corporate securities lawyer specializing in corporate finance matters for small cap companies, and has served as a director with a number of public companies. Mr. Salley is a founding partner of Salley Bowes Harwardt LLP, a Vancouver law firm, focusing on resource companies and has extensive experience with all aspects of prospectus financings, private placements, mergers and acquisitions in the public markets. Mr. Salley holds a Bachelor of Arts degree and a Bachelor of Laws degree from the University of Alberta.

For more information on Golden Arrow Resources – CLICK HERE.

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NEWS RELEASE.

June 25, 2013: Montreal, Quebec – Stornoway Diamond Corporation (Stock Profile – TSX:SWY) announces the appointment of Orin Baranowsky, CFA, to the role of Director, Investor Relations. Orin will be based in Toronto alongside Stornoway’s President and CEO Matt Manson, and will be responsible for Stornoway’s shareholder communications and equity market relationships.

Orin joins Stornoway with more than 15 years of experience in capital markets, during which he held appointments in the junior gold sector and as a sell-side analyst with Bank of Montreal. Orin can be contacted at tel: 416-304-1026 x103 and email: obaranowsky@stornowaydiamonds.com.

To learn more about Stornoway Diamonds – CLICK HERE.

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Winston Churchill is famously known for having said, “The further back you look, the further ahead you can see,” and indeed, historical precedent is one of the few tools we have at our disposal when studying major market trends, and in today’s case, the trend in gold.

The period most widely referenced and compared to today’s bull market, is the late 1970s. During this decade, gold moved from $35 an ounce, to an intraday peak of over $900 an ounce in January 1980, for a total move of roughly 26x.

When we look at today’s bull market in gold, which has moved from a bottom of $250 an ounce, to where it stands today, at $1400 an ounce—we see a 5.5x total move—a fraction of the 26x move witnessed during the 1970s.

But why is it that today’s bull run seems so much more challenging than its 1970s predecessor? Why is there so much more volatility? Why is there so much more “manipulation”, “panic”, and every other nasty thing involved, that wasn’t present back then? The answer is: there isn’t.

Today’s bull market in gold is tame, quiet, and moving along just as one would expect it too. It only feels emotional because you’re living through it.

Furthermore, today’s ongoing and two-year consolidation in gold is nothing when compared to the mid-cycle correction displayed during the 1970s.

As previously mentioned, yesteryear’s bull market unleashed gold from its pen in 1970 at $35 an ounce. It barreled forward to $180 an ounce by 1974, achieving a 500% total move, before taking a short pause.

It was then on August 14, 1974 that an interesting event occurred; standing President Gerald Ford signed a bill lifting the previously observed “Executive Order 6102”, which banned gold ownership by U.S. citizens, scheduled for effect on December 31st, 1974.

For the first time in a generation, Americans were allowed physical ownership of gold bullion coins and bars. In anticipation of gold’s liberation day, a blow-off “peak” up to $195 an ounce took place, no doubt allowing the inside holders (banks and governments) to rotate out of positions purchased at $35 an ounce—in effect, dumping them out into the public at new all-time highs.

Following its December liberation day, gold collapsed by 48% over the next year and a half, from a high of $195 an ounce, to a bottom of $100 an ounce in August, 1976.

Panicked sellers were softly coddled by mainstream financial firms in their decision to sell, no doubt representing the perfect re-entry point for smart money to buy back previously sold gold to the American public in the ensuing run up.

Within days of a bottom being struck at $100 an ounce, Citibank issued a statement indicating that, “The economic recovery that is now under way in most countries will likely continue for the next year, gold will lose some of its allure as an investment…[and] with inflation on the wane…[we] foresee the possibility of a price as low as $60 an ounce.”

That statement marked “the end” of the gold bull market for most, and indeed, the great majority washed their hands clean of yet another failed investment scheme delivered to the public, backed by the full faith of the U.S. Government and banking powers.

However, for a select few, the true story of power and excitement began in that $100 bottom in 1976, for the preceding 48% collapse in the price of gold represented a “mid-cycle” shakeout—a point in which the bull shook off all but the toughest and most convicted holders of the metal. It was then, in the ensuing four years from 1976 to 1980, that gold soared from $100 an ounce—to over $920 an ounce.

In looking at this price action of the 1970s, we can be certain that horrific corrections are part-in-parcel of bull markets. Additionally, whether it be by reflection of popular opinion, or by the device of smart-money to re-enter positions—mainstream voices will attack the market, in a most ferocious way, at or very near exact market bottoms.

Furthermore, in the context of this historical market data, it appears the current correction in gold is tame in comparison to the 76′ shakeout, when measured in percentage terms:

To be of equal proportion to the 76′ correction, gold would need to drop down another 35%, to the $900 level. If in fact it did so, it would still remain within its long term bull market given the fundamentals.

For those looking for a bottom at today’s levels, it’s most certainly a possibility when looking at headlines coming from mainstream financial firms as an indicator. For example:

April 23rd, 2013 – Goldman Sachs: “Expect further declines…as conviction in holding gold continues to wane…[and] reacceleration in the US growth [occurs] later this year.”

May 16th, 2013 – Credit Suisse: “[Expect] $1,000 in five years…as inflation fails to accelerate and with the worst risks to the global economy waning.”

It should be noted however, that bearish gold commentary has been emanating from the mainstream press all throughout the last two years, with every piece of which further validated as gold continues to its drop.

As a final visual comparative on gold—when we look at a chart of the total cumulative gain of today’s bull market (5.5x) versus the 1970s (24x+), we see just how much today’s market pales in comparison.

Bottom Line: The emotional challenge of remaining positioned in today’s gold bull market is no easy feat. Adding to that challenge, is continued clamoring by mainstream financial news sources, repeatedly calling an end to the bull market.

If history is to be our guide however, we must understand that bearish calls are part of the journey, as well as the steep and frightening declines.

Aided with history, these times need not be emotional—they are in fact quite normal, and gold is moving along as expected.

Most importantly, is you’re response to the variables of today’s market. Your actions will determine whether or not this is just another failed investment scheme, or the resumption of a powerful and profitable journey.

NEWS RELEASE.

June 20, 2013: Vancouver, B.C. – Golden Arrow Resources Corp. (Stock Profile – TSXV:GRG) has received and filed on SEDAR the independent National Instrument 43-101 technical report regarding the mineral resource estimate for the Chinchillas silver-lead-zinc project in Argentina, as described in the company’s news release dated May 9, 2013.

The Report, dated June 20 2013, was prepared according to NI 43-101 guidelines and in accordance with CIM Standards on Mineral Resources and Reserves, under the supervision of independent qualified persons, Bruce Davis, Ph.D. FAusIMM, and Kyle Howie, B.Sc., MAIG.

Highlights from the Report include:

-Indicated resources of 7.2 million tonnes grading 119 g/t silver, 0.57% lead and 0.48% zinc (32.6 million ounces silver equivalent (“Ag Eq”) at 141 g/t Ag Eq; 50g/t Ag Eq cut-off).

-Inferred resources of 21 million tonnes grading 78 g/t Ag, 0.69% Pb and 0.62% Zn (72.2 million ounces Ag Eq at 107 g/t Ag Eq grade; 50 g/t Ag Eq cut-off) .

-The main mineralized zones at Chinchillas have yet to be closed off by drilling and there are several exploratory drill holes with significant mineralization outside the current resource model.

-A proposed 7,000 meter of additional drilling is recommended to increase the resource size and confidence. In addition, preliminary engineering studies are proposed, as well as environmental and social impact assessments, to advance the Chinchillas Project. The total budget for the suggested programs is $2.3 million.

Qualified Persons:

The resource estimate and associated information in this news release was prepared under the supervision of, and approved by, independent consultants to the Company, Bruce Davis, Ph.D. FAusIMM, of BD Resource Consulting Inc., and Kyle Howie, B.Sc., MAIG. The contents of the news release have been reviewed and approved by Brian McEwen, P.Geol., VP Exploration and Development to the Company. Dr. Davis, Mr. Howie, and Mr. McEwen are Qualified Persons as defined in National Instrument 43-101.

A copy of the report will also be made available on the Company’s website, www.goldenarrowresources.com.

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NEWS RELEASE.

June 19, 2013: Montreal, Quebec – Stornoway Diamond Corporation (Stock Profile – TSX:SWY) provided an update on the status of construction activity on the Renard Mine Road, following the announcement on June 17th from the Alliance of Unionized Construction Workers of Québec of strike action. This strike action covers all unionized construction workers in Québec, and has resulted in a limited interruption of construction activities on the 97km segment of the Renard Mine Road currently under development by Stornoway.

At the present time, we do not anticipate a material impact on the overall development schedule or budget for the Renard Mine Road, and we will continue to monitor the situation closely.

To learn more about the Renard Diamond Project – CLICK HERE.

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The price of gold hovered just below $1380 an ounce Wednesday morning in London, with silver trading around $21.80, after the metals failed to break through $1380 and $22 respectively.

European stock markets ticked higher by lunchtime – with the exception of Germany’s DAX – regaining some of yesterday’s losses, which were followed by sell offs in the US and Asia.

Commodities ticked higher this morning while US Treasury bond prices fell ahead of an auction of 10-year debt later today.

“The gold price is unable to recover despite a weaker US Dollar and falling equity markets,” says this morning commodities note from Commerzbank. “The dominant subject on the gold market continues to be the possibility of a premature withdrawal of bond purchases by the US Federal Reserve…in our view, the figures available so far do not constitute any reason to scale back QE3 in the near future.”

“There’s a tug of war between investors putting money into gold and taking it out,” adds Bernard Sin, head of currency and metal trading at Swiss refiner MKS, who also cited concerns among investors “worried about is if there’s no more quantitative easing”.

“With the Chinese out [on holiday] until Thursday,” adds a note from ANZ, “the [gold] market is lacking a key stabilizing factor.”

Since falling sharply in April, gold has swung either side of $1400 an ounce, with the gold price falling as low as $1337 and as high as $1478. Silver has also oscillated, while stock markets have retreated after hitting multi-year, or in some cases record, highs last month, with Japan’s Nikkei especially hard hit.

“We think the recent volatility can be mostly traced to [Fed] Chairman Bernanke’s rather unconvincing testimony in front of Congress a few weeks ago when he failed to clarify exactly when the Federal Reserve’s bond buying program will be pared back,” says a note from INTL FCStone metals analyst Ed Meir. “Markets have been on edge ever since, with the global bond market in particular getting hammered.”

An auction of 10-year US Treasury bonds later today is set to see benchmark yields above the inflation rate for the first time in 18 months, the Financial Times reports.

The market yield on 10-year Treasuries has risen from 1.6% at the start of last month to nearly 2.3% yesterday. Treasury Inflation Protected Securities (Tips), the price of which is linked to inflation, have also seen yields rise sharply in recent weeks. Bond yields move inversely to bond prices, with rising yields indicating investor selling.

“We have known for some time that Tips were overvalued, and the reversal has happened very quickly,” James Evans, senior vice president at Brown Brothers Harriman, tells the FT. “Rightly or wrongly, the bond market has pulled forward the end of QE and rate hikes coming as early as 2014. It does seem premature.”

“The bond market seems to be missing the point that the Fed’s policy of tapering [i.e. slowing the pace of QE asset purchases] depends on the tone of economic data,” adds Barclays interest rate strategist Michael Pond. “The market has moved from pricing in less bond buying [by the Fed] to a full-on tightening cycle and we believe that is a different story than what the Fed is trying to communicate.”

“Recent weeks suggest that transparency [from the Fed] doesn’t mean clarity,” says Jim O’Neill, former chairman at Goldman Sachs Asset Management, in a column for Bloomberg View. “The Fed can talk about ‘tapering’ QE all it likes; it can’t change the basic laws of economics and valuation. A rise in the benchmark yield to 4% would represent normality even if inflation expectations stayed well controlled.”

NEWS RELEASE.

June 7, 2013: Vancouver, B.C. – North American Tungsten Ltd. (Stock Profile – TSXV:NTC) board has appointed Kurt Heikkila, current chairman of the board, as interim chief executive officer and president. He will hold these positions on an interim basis to lead the company while the board conducts a search for a successor to Stephen Leahy, who stepped down as chief executive officer, president and as a member of the board of directors to facilitate the next stage of the company’s development. The company also announces the appointment of Dennis Lindahl as interim chief financial officer succeeding Harold Schwenk, who will undertake other duties with the company.

Mr. Leahy, as the founder of North American Tungsten, has made important contributions throughout his period of leadership. He arranged the acquisition of the MacTung deposit and the CanTung mine. The current CanTung mine operations and the advanced state of permitting of MacTung are his legacy. He also contributed to the tungsten industry as a whole through his dedicated efforts to the International Tungsten Industry Association.

Mr. Heikkila has served as a director on North American Tungsten’s board since 2009. He is an experienced business innovator and industrial problem solver, successfully leading in both enterprise environments and entrepreneurships. He has held management positions in large companies, including DuPont de Nemours & Company and Andersen Corp. He has founded several companies, including Wild River Consulting and Tundra Companies, where he currently serves as president and CEO.

“We would like to thank Steve for his years of service to North American Tungsten and the industry, and wish him well in future endeavours,” Mr. Heikkila said. “I have full confidence in our strong CanTung operating group, who drives the important priorities of the company. The board remains committed to making CanTung a long-term operating mine and developing MacTung.”

To learn more about North American Tungsten – CLICK HERE.

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Similar to the colorless diamond we all know so well, natural fancy colored diamonds are just as authentic and incredibly impressive. In fact, they are mined in the very same fashion from many of the same diamond mines around the world. Only, natural colored diamonds only represent approximately 0.1% of all the colorless diamonds mined each year.

Within the World of Color there are 12 different main colors, over 90 secondary hues, 9 intensity levels, and over 230 color combinations. However, as a result of the rarity of these stones the supply is low, and considering the addition of the increasing market demand, the value is often considered much higher than that of a colorless stone with similar characteristics.

Well Established Goods.

Diamonds have been collected by royalty, the rich, and the most famous dating back to almost 3,000 years ago in India. They are publically acknowledged for the significance of wealth and importance. They were, and still remain commonly traded international goods and managed to retain their value over time. They do not lose value once owned and they never lose their color or shine.

Impressive History of Price Performance.

The prices paid over the past 10-15 years in both the public auction houses as well as the private companies have steadily increased in an almost consistent pattern. Since fancy colored diamonds are such as private asset, prices are not publically posted or kept on diamond lists like we see with colorless goods. The prices are defined according to public auction results, supply and demand, and obviously competition.

Even during the global financial crisis of 2008, because they are a tangible asset which one can take into his position, they managed to retain their value without taking a loss.

Portability.

Fancy colored diamonds have adopted the description of being the most concentrated form of wealth on earth. Since the diamond material is among the most durable natural substances on the planet, they are extremely resilient to any danger such as fire, flood, or any other natural disaster. Still, they are a precious gemstone which is susceptible to bodily harm and should be well kept so they are not lost or scratched. Needless to say, it would be considered wise to insure the investment because it is so small.

Outlook on the Diamond Future.

At least in the near future, things are only looking positive for the colored diamond investor. Among the most valuable and highly recommended investment stones today is the Argyle Pink Diamond. The Argyle diamond mine, located in Australia, currently belongs to the Rio Tinto group (Stock Profile – ASX:RIO), which is the third largest diamond miner in the world.

Rio Tinto has already publically announced the upcoming end to the Argyle mine which is famous for the production of the finest pink diamonds in the market. The company has been trying to sell the Argyle mine for almost a year now in the hope that someone else would take over the remaining seven years of the mines life, but has been unsuccessful. As reported recently by Sky News, the company is now trying to raise hundreds of millions of pounds through a separate listing of the unit in order to float the business.

The Argyle diamond mine produces over 90% of the pink diamonds in today’s market and there is no other mine with capabilities to do the same. Even if another mine was found today, it would take close to ten years before they were up and running to full capacity.

The international diamond market seems to constantly be on the move. Petra Diamonds Ltd. (Stock Profile – LSE:PDL), which owns eight mines in South Africa and Tanzania and an exploration program in Botswana, has a clear focus on mass production. They are aiming to be the largest producers in Africa, and already hold fame to the ownership of five of the twenty-four most productive mines in the world. In fact, they recently announced the discovery of a 25.5 carat blue diamond from one of their most successful mines, the Cullinan mine in South Africa.

Concluding Results.

Even with the current financial troubles the world shares, the diamond market appears to be on the rise. Especially is Asia, more specifically China, Singapore, and India, demand for high quality investment worthy diamonds has dramatically increased. US consumers as well are recovering their confidence. The industry has not seen any major discoveries of diamond fields for about two decades, which keeps supply low while demand is high.

At the moment, diamonds in general, and fancy colored diamonds more specifically, are shining bright in the eyes of the investor.

John Peterson, Guest Contributor to MiningFeeds.com

About the author: John Peterson works with Leibish & Co., colored diamond experts based in Israel.

NEWS RELEASE.

June 3, 2013: Montreal, Quebec – Stornoway Diamond Corporation (Stock Profile – TSX:SWY) provided an update on progress at the Renard Diamond Project, Stornoway’s 100% owned diamond development project located in north-central Québec. Stornoway’s principal focus at this time is the timely completion of project financing on a schedule defined by the development of the Renard Mine Road, which is currently in construction under Stornoway’s management. Stornoway’s development team is also engaged in detailed mine engineering work, the completion of all outstanding permitting, and an update to the project’s NI 43-101 Mineral Resource estimate following the completion of the recent bulk sample at the Renard 65 kimberlite.

Matt Manson, Stornoway’s President and CEO, stated: “We are pleased to report continued good progress on the construction of the Renard Mine Road, where we are forecasting completion on schedule and within budget. We are also encouraged by the progress made to date on project financing. Stornoway is pursuing a financing strategy based on a combination of debt, equity and the forward sale of diamonds. Despite challenging market conditions, the project has been well received by potential financing partners based on, among other things, its scale of resource, accessibility, strong social acceptability, and long potential mine life. Our aim is the completion of this financing on a schedule that allows us to utilize the Renard Mine Road for mine construction as soon as it becomes available for all-season traffic later in the year. This schedule offers Stornoway the opportunity to develop the Renard Project over a period when the diamond market is expected to strengthen markedly, and when the global mining sector has entered a period of cost stabilization and contractor availability.”

To view the complete news release on the Renard Project – CLICK HERE.

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