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Gold hit a new 4.5-month low this morning of $1,571 but has recovered most of those losses..as of 8:30 am Pacific, the yellow metal is off just $5 an ounce at $1,589…Silver is now essentially unchanged at $29.02…Copper is 4 cents lower at $3.68…Crude Oil is 33 cents lower at $96.75 while the U.S. Dollar Index is down slightly at 80.16…

UBS reported that Indian buying of Gold during Wednesday’s fall below $1,600 was nearly twice the average daily volume and the “strongest since April 17″…India’s government has abolished the excise duty on Gold jewelry…this was one of the reasons for the recent jewelers’ strike which drove Gold imports down 55% in India…getting rid of the tax should encourage the restocking of Gold and bring Indian gold buyers back to the market…physical buying will be the key factor in helping to stabilize the Gold price and keep bullion at $1,500 or better…

Silver futures are now trading in Shanghai, the 28th product to be launched on China’s futures markets…

Even The Best Get Humbled

There’s nothing like getting humbled by the market, which has happened to every trader and investor at some point, but what would it feel like to lose $2 billion?…”Just because we’re stupid doesn’t mean everyone else is,” commented J.P. Morgan CEO Jamie Dimon when asked if other banks could see the same type of losses…the $2 billion trading loss reported by J.P. Morgan yesterday was the result of bad derivatives bets by its Chief Investment Office which Dimon called a :synthetic hedge” using credit default swaps…this kind of insurance contract was poorly executed and poorly monitored, according to Dimon…he said the bank has an extensive review underway and has already found “many errors” and “bad judgment”…the timing of this news was certainly not helpful in the context of the current market environment…

An Optimistic Outlook

The Financial Post reports this morning that recent weakness in equity markets due to the flareup in Europe’s debt crisis and disappointing U.S. payroll numbers reminds investors of last year’s summer sell-off…the Post’s David Pett wrote that Murray Leith at Odlum Brown says history will not likely be repeated this time around…”Given that stocks experienced corrections as the global economy slowed in 2010 and 2011, it is human nature to expect that pattern to repeat itself again this year,” he said in a note to clients…”We don’t think it will…in fact, we believe there is a reasonably good chance that the global economy will accelerate heading into summer”…Leith said that markets were upended at this time last year, not only because of Europe’s troubles and weak U.S. economic data, but also because rising commodity prices, higher interest rates and the natural disasters in Japan were also at play…that is not the case this year, he said, and there are more tailwinds than headwinds driving markets now…”Interest rates are extremely low, inflationary pressures have abated, and Japan is rebuilding,” he wrote. With U.S. and Europe faring better than expected, Leith sees better days ahead…

Today’s Markets

Markets have rebounded after opening modestly lower this morning…as of 8:30 am Pacific, the Dow and TSX are now both in positive territory…the Venture Exchange dropped as low as 1343 and is now at 1349, down 6 points for the day…

Western Copper (WRN, TSX)

It’s not only Venture stocks that have suffered over the last couple of months…Western Copper (WRN, TSX) has taken quite a beating as John’s chart shows below…it fell from a yearly high of $1.97 February 29 (interestingly, the same day as the Venture’s yearly high) to a low of 93 cents Wednesday (same day as the Venture’s yearly low to date)  just slightly above its 2010 low…a positive sign is that very intense selling pressure in WRN is starting to abate…

Greenlight Resources (GR, TSX-V) Chart Update

Spanish Mountain Gold (SPA, TSX-V) Chart Update

Note: John, Jon and Terry do not hold positions in WRN, GR or SPA.