TSX Venture Exchange, May 13-17

The S&P/TSX Venture Composite Index dropped 3.3% — or 32.05 points during the period — with falling precious metal prices and a weaker Canadian dollar weighing on the market. Upbeat signs from the U.S. provided a late boost despite uncertainty in China, where factory output and investment were softer than expected in April.

Statistics Canada revealed that cheaper gasoline and cars drove Canada’s annual inflation rate downward in April to 0.4%, which marks the lowest point since October 2009. The Bank of Canada previously said it did not expect inflation to return to its 2% target until mid-2015. 

The Canadian dollar briefly touched a quarterly low at US97.8¢ during the week, after representatives from the U.S. Federal Reserve said the central bank could slow down monthly bond buying while the labour market strengthens. The U.S. outlook brightened late in the week after Thomson Reuters and the University of Michigan revealed that a preliminary reading on their Consumer Sentiment Index for May came in at 83.7, compared to the final April reading of 76.4. The jump places the index at its highest point since July 2007.

Meanwhile, in quotes released mid-week by China’s state-owned media, Premier Li Keqiang was quoted saying that the country would not likely turn to government spending and policy stimulus to boost its economy. Markets had anticipated the Chinese government would act in the face of weakening manufacturing data in recent months, but Keqiang said policy-driven measures would only create new problems and risks.

Commodities trended predominantly downward during the week, with gold bullion dropping 5.5%, or US$78.90, en route to a US$1,357.75 per oz. close. Copper fared a bit better, falling 1.5% — or US5¢ — before closing out the week at US$3.32 per lb., while crude oil snuck out a modest gain of 0.4%, or US35¢ per barrel, en route to a US$95.91 weekly close.

B.C.-focused Colorado Resources registered the largest gain and was the most active on the Venture during the week, with 14.6 million shares trading hands, as Colorado jumped 49¢ per share before closing at $1.48. The company is riding momentum from a discovery hole released in April that cut 242 metres of 0.63% copper and 0.85 gram gold per tonne at its North ROK property, 190 km north of Stewart, B.C.

On May 16 Colorado announced it had completed another two diamond drill holes at North ROK to cap off an inaugural four-hole program at North ROK. Hole 3 was negative-80 degrees collared at the same location as the company’s discovery hole, while hole 4 was negative-45 degrees collared 100 metres southeast of hole 1.

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