Western markets beset by summer doldrums

Weakening junior market volume, coupled with a slight pull back in gold toward the session’s end, led to further softening of the TSX Venture Exchange Index. The index fell more than 32 points to close at 1527.14 during the trading period July 14-20.

Gold closed out the period at US$401.40 per oz. in New York, close to where it began the week but off more than US$6 an ounce from the session’s high.

Bullion’s retreat is attributed to market anticipation of positive U.S. economic news by Federal Reserve Chairman Alan Greenspan. Short-term interest rates were raised a quarter of a point for the first time in four years in late June, a trend that is anticipated to continue in the near term. In his report to the U.S. Senate Banking Committee, the American Methuselah of monetary policy vowed to stay the course by tightening rates in reaction to slowly rising inflation, which has been spurred by rising energy costs.

Other metals had a generally positive week, with silver gaining 17 to close near a 3-month high US$6.60 per oz. Platinum and palladium showed strength, closing at US$837 and US$230 per oz., respectively. Platinum is approaching 60-day highs, possibly related to supply concerns following a strike-induced work stoppage at the Stillwater mine in Montana. Copper showed a slight gain by rising a few cents to close at US$1.28 per lb. The decline in the 30- and 60-day stocks of the red metal is showing signs of flattening. Meanwhile, a tight supply of nickel helped boost that metal’s price back over the US$7-per-lb. level, though stocks continue to show increases over recent weeks.

A pair of companies jointly exploring the Rice Lake gold project in eastern Manitoba proved to be the most active of the juniors. Gold City Industries and San Gold Resources traded 3.8 million and 3.2 million shares, respectively. Both have arranged financings of more than $1 million apiece. The duo acquired the assets of Harmony Gold in early 2004 — specifically the Bissett gold mine and infrastructure.

Fjordland Exploration reappeared on the list of volume leaders, this time in third position, trading almost 2.7 million shares. The company is garnering the attention of investors for its 361-metre gold and copper intercept at the Woodjam project in central British Columbia. The porphyry explorer also arranged a half-million-dollar financing with Imperial Metals, which is restarting the nearby Mount Polley mine. Fjordland moved up 9 to close at 38.

Northern diamond explorer Dunsmuir Ventures joined the most-actives and percentage-gainers with just under 2 million shares in volume, closing up 43% at 26.5. The company recently closed a $1-million financing and arranged a merger with Peregrine Diamonds, a private explorer with exclusive use of 40,000 line km of BHP-Billiton’s Falcon gravity system.

True North Gems led all value gainers in the period and was a percentage leader, up 47%, or 28, to close at 88 on a volume of more than 300,000 shares. The gem hunter has found emerald mineralization at its Regal Ridge project in the Yukon.

Despite a buoyant silver market, Silver Standard Resources topped the list of value -decliners, off 84 to close at $16.88 per share.