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Gold has traded in a narrow range so far today between $1,687 and $1,695 an ounce…as of 6:00 am Pacific, the yellow metal is down $3 an ounce at $1,693…Silver is off 6 cents to $32.30…Copper is up slightly at $3.47…Crude Oil is up 25 cents at $95.55 while the U.S. Dollar Index has fallen one-third of a point to 81.17…

In a significant shift, Dennis Gartman has turned bullish on Gold in U.S. dollar terms, he told CNBC yesterday…“Gold’s going up in all currency terms at this point…Gold seems to be the dominant currency – it doesn’t really matter at this point,” the editor of The Gartman Letter said on “Fast Money”…Gold is gaining in euro, yen and dollar terms, he added…

GFMS Predicts $1,800+ Gold Before Year-End

Gold prices could rise above $1,800 an ounce before the end of 2012, as more quantitative easing and other monetary stimulus is expected by central banks, Thomas Reuters GFMS stated yesterday in its Gold Survey 2012 Update 1…“I think we’re on pretty safe ground saying that we’ve already seen the lows for the year and that firmer prices, particularly towards year-end, are (in) the cards, but we’re also expecting a bumpy ride looking ahead – any intensification of the eurozone crisis or dashing of hopes for further easing by the Fed and you could easily see the rally derailed for a while,” said Philip Klapwijk, global head of metals analytics at GFMS…the consultancy does not see Gold taking out the 2011 highs of just over $1,900, however…the firm also noted that world investment in Gold in the second half of 2012 is expected to reach a record in terms of tonnage, forecast at more than 970 metric tons, and value, at $53 billion…central banks are expected to continue to buy Gold in the second half of the year, following the 270 tons bought in the first six months…the consultancy said central banks could purchase 220 tons between now and year’s end…

Mining Costs Continue To Rise

While global Gold mine production was at best flat in the first half of 2012, average total cash costs jumped 19% to a new high of $727 per ounce according to the Thomson Reuters GFMS’s Gold Survey 2012 Update 1…some of the reasons behind the hiatus in production are declining grades across the industry, construction and commissioning delays and slower than expected ramp-ups of output at a number of properties…added to this, the group said, were exogenous factors like geotechnical problems, extreme weather and labour strikes…but, the consultancy says, “These are not the only headwinds producers have to face…the relative stagnation of the Gold price, coupled with further rises in production costs, has seen producers’ cash margins eroded by 16% over the past nine months, while upward revisions to capital expenditure forecasts will place additional pressure on free cash flow going forward”…continued cost inflation and falling prices also meant that average cash margins have fallen sharply from above $1,000/oz in Q3 2011 to just below $900/oz in the second quarter of 2012…if one adds to this the 6% jump in depreciation and amortization costs to $203/oz, then GFMS’s proprietary “all-in cost” metric which is designed to reflect the full marginal cost of mine production rose to $1,050/oz during the period…

Euro Zone Business Activity Slides At Accelerated Pace In August

The euro zone is likely to have slipped back into recession in the current quarter, according to a survey published on Wednesday that showed a seventh month of contraction for the bloc’s private sector as new orders dwindled…the Purchasing Managers’ Index (PMI), published by Markit, showed the economic rot that began in smaller periphery members of the 17-nation bloc is now taking hold even in Germany, the region’s largest and strongest economy…August’s composite PMI, which measures manufacturing and services together, fell to 46.3, revised down from a flash reading of 46.6 and below July’s 46.5…

U.S. Becoming Less Competitive

The United States has slipped further down a global ranking of the world’s most competitive economies, according to a World Economic Forum (WEF) survey released today…the world’s largest economy, which was placed 5th last year, fell two positions to the 7th spot – marking its fourth year of decline….a lack of macroeconomic stability, the business community’s continued mistrust of the government and concerns over its fiscal health were some of the reasons for the downgrade, according to the annual survey…

U.S. Manufacturing Sector Contracts For Third Straight Month

The U.S. manufacturing sector contracted for the third straight month in August, the longest slide since the recession ended, in line with recent data showing a pullback in business spending…the Institute for Supply Management said its manufacturing index declined to 49.6, the lowest level since July 2009…that followed readings of 49.8 in July and 49.7 in June and came in below expectations of 50…a reading below 50 indicates contraction…there have not been three straight readings below this contraction line since May-July 2009…ISM surveys more than 300 manufacturing companies on employment, production, new orders, supplier deliveries and inventories…“The data continue to show a significant loss of momentum in manufacturing in recent months, although the overall index is still well above the low 40s levels typically associated with recession,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics…the index averaged 55.2 in 2011 compared with 53.6 in the first five months of 2012…

Democratic Convention

With social issues topping the agenda, we’re not hearing much talk about economics, growth and the debt at the Democratic Convention which opened last night in North Carolina…President Obama makes his pitch tomorrow night for four more years and it’ll be very interesting to see how he tires to spin that…

PQ Held To Minority In Quebec

The fact the Parti Quebecois was held to a minority in last night’s Quebec’s election (only 54 of 125 seats) was a blessing as the separatist/socialist/bigoted party should be prevented from implementing many of its most destructive policies including increased social spending through tax hikes on high earners and mining companies…Quebecers are already the most burdened taxpayers in North America, and what do they have to show for a bloated government? – a wobbly economy and the highest debt ($200 billion or 55% of GDP) of any province in the country…Quebec has become the Greece of Canada and things are only going to get worse given the current political leadership…

Today’s Markets

Asian markets were weaker overnight with China’s Shanghai Composite Index falling another 5 points to 2038…European shares are mixed this morning with investors cautious ahead of tomorrow’s ECB meeting at which bank president Mario Draghi is expected to announce a bond-buying program to help countries such as Spain and Italy lower their borrowing costs…stock index futures in New York, meanwhile, as of 6:00 am Pacific, are pointing toward a flat to slightly negative open on Wall Street…

Venture Exchange

The Venture Exchange was down most of the day yesterday but recovered to finish up 2 points at 1243…this market will pick up fresh momentum once it’s able to plow through resistance at 1250…the 50-day moving average (SMA) has reversed to the upside which has always signaled higher prices…

A comparison between the CDNX and the CRB Index over the last few years shows an interesting pattern at the moment that bears some resemblance to that seen in the summer of 2010, just prior to the start of a powerful advance by the CDNX…you’ll notice in John’s chart below that there was a divergence beginning in June, 2010, as the CRB Index started moving higher while the CDNX was still struggling…within a couple of months the CDNX was in full flight…since June of this year we’ve seen another significant divergence, and the Venture definitely has some catching up to do which we expect will start shortly…what we’re looking for is a breakout in the CDNX relative to the CRB…

New Gold Inc. (NGD, TSX)

As we mentioned recently, keep a close eye on New Gold Inc. (NGD, TSX) which is getting very close to a significant technical breakout above a down trendline…the market has not fully taken into account, in our view, the success New Gold is enjoying in the Blackwater district of central British Columbia where it’s aggressively expanding its Gold-Silver resource with nearly 20 drill rigs in operation (two Venture-listed companies – Parlane Resource Corp. (PPP, TSX-V) and RJK Explorations (RJX.A, TSX-V) – are currently very active with strategic land packages in the area and could make a lot of noise in the coming weeks and months)…New Gold is a very well-run company that could have been picked up for just over $7 a share when the market bottomed in May…it closed yesterday at $11.14 but still has to be considered attractive just based on developments at Blackwater…

Corvus Gold (KOR, TSX)

Corvus Gold (KOR, TSX) has enjoyed a very strong 2012 thanks in large part to continued success at its North Bullfrog Project in Nevada…note that it’s currently trading near the lower end of an upsloping channel in place since the beginning of the year…

Orko Silver (OK, TSX-V)

We’ve mentioned Orko Silver (OK, TSX-V) on several occasions, and John also recently posted a chart warning of a possible breakout…a long period of selling pressure has abated, and the stock has formed a bullish “cup with handle” pattern…below is an updated chart that shows the next major resistance at the $2 level…

Note: John, Jon and Terry do not hold positions in NGD, KOR or OK.