Juniors struggle despite stronger gold

After spurring some much-needed investor enthusiasm by shooting over the US$400-per-oz. mark, gold dropped sharply near the end of the trading period on July 13, closing at $401.70 in New York on stronger U.S. economic data. The price of gold started out as low as US$394 per oz. and reached a 3-month high of US$408.70, on July 12.

A narrowing of the U.S trade deficit sent the greenback higher relative to the euro, against which the dollar had been sitting at a 4-month low. This had a dampening effect on dollar-priced gold for European investors.

The TSX Venture Exchange composite index ended flat, losing two points to close at 1559.45.

Silver, platinum and palladium were all higher. Silver made the most significant move upward, by a healthy 7% to around US$6.43. The metal reached highs of around US$6.50 per oz. after closing below US$6 near the beginning of the period. Platinum closed higher at around US$806 per oz., while palladium was trading at around US$221 per oz. at the period’s close.

New 52-week lows outnumbered new 52-week highs for TSX Venture Exchange-listed companies, by almost 6 to 1. There were 58 new lows and only 10 new highs.

Topping the list of companies with the highest number of shares traded was Vancouver-based Fjordland Exploration, which hit a new 52-week high of 35 on volume of more than 3.2 million shares. The company closed at 29 — an increase of 1 above the previous close. Fjordland made headlines in the previous week on the strength of encouraging results from the first hole drilled at the Woodjam property in central British Columbia. The hole returned 361 metres grading 0.84 gram gold per tonne and 0.12% copper from surface. Fjordland is earning a 60% interest in the property, which was recently expanded to 45.5 sq. km, from Wildrose Resources. Wildrose traded nearly 1.2 million shares and also reached a new 52-week high of 44 but then settled back at around 33. The companies were also being touted by John Kaiser in his Bottom Fishing Report.

Minera Andes traded more than 2.1 million shares over the period, gaining a penny to close at 39. Ongoing development of the underground workings at the Huevos Verdes vein at the San Jose project resulted in high-grade intervals of up to 263 grams gold and 12,403 grams silver per tonne over 0.42 metre. These grades occurred within 2.36 metres of mineralized vein averaging 59.7 grams gold and 3,075 grams silver per tonne.

JNR Resources gained 6, or greater than 10%, on more than 2 million shares to close at 60. The company is highly leveraged to uranium, which has been trading at about US$18.50 per lb. in recent weeks. Another active uranium player was Strathmore Minerals, in which more than 1.2 million shares exchanged hands. However, the company closed 10% lower at 69.

On a volume of 1.6 million shares, American Bonanza was active, though it reported no news regarding its Copperstone property in Arizona. The company gained a penny to close at 18.5.

Cortez area player White Knight Resources bounced back to $1.44, for a 23 gain on 1.5 million shares, after losing a bit of ground. The company has a large land position south of the Pedimont deposit along the Cortez trend in Nevada.