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Gold has been under some mild pressure today, thanks in part to a continued strong greenback…as of 6:45 am Pacific, bullion is off $2 an ounce at $1,586 after dipping as low as $1,576…Silver is also trying to rebound and is currently down 17 cents at $28.75…Copper is up a penny at $3.52…Crude Oil is up slightly at $92.60 while the U.S. Dollar Index hit a fresh 7-month high this morning…it’s currently up one-tenth of a point to 82.99…

U.S. Probes Metals Pricing By Banks

The top U.S. derivatives regulator has started internal discussions on whether the daily setting of Gold and Silver prices in London is open to manipulation, the Wall Street Journal reported this morning, citing people familiar with the situation…the Commodity Futures Trading Commission (CFTC) has not launched a formal investigation into the matter, but it is examining various aspects of price fixings, including whether they are sufficiently transparent, the paper said in its online edition…those discussions come after the Libor rigging scandal that exposed widespread manipulation by British banks, including Barclays, of the interest rate setting benchmark and has increased scrutiny by global regulators of other money market benchmarks…Gold prices are set twice daily by five banks via teleconference, while three banks set silver prices…those fixings are used to determine spot prices for the billions of dollars of the two precious metals traded each day, impacting everything from jewelry prices world-wide to how much mining companies earn selling raw metals to refineries…it also helps determine the value of derivatives whose prices are tied to the metals…

Today’s Equity Markets

Asian markets were mixed overnight but Japan and China both saw gains with the Nikkei average climbing by over 1% to close at 12381 while the Shanghai Composite added 6 points to finish at 2270…European shares hit 4.5-year highs today as EU heads of states get set for a summit in Brussels to discuss the region’s mounting social problems…Germany has ignored calls from its euro zone partners for more economic stimulus by tabling plans to cut spending and balance its budget ahead of schedule on the eve of the EU summit dedicated to growth…the Dow, powered by stronger-than-expected economic numbers in the United States and an energy boom in several states, has advanced for 9 consecutive sessions for the first time since November of 1996…that streak in ’96 was immediately followed by a 5% pullback, so a near-term correction in the Dow should certainly be expected to help unwind overbought conditions…the Dow has also posted 10 consecutive weekly gains…unlike the Dow, the S&P 500 has yet to hit a new record high but is edging closer…it closed yesterday at 1554, 22 points below its all-time intra-day high from 2007…Apple Inc. shares shares have dropped 39% since topping above $700 in September…the iPhone and iPad maker was such a big driver of the S&P 500’s rally off the March 2009 lows but has quickly turned into a thorn in the side of the Index…as of 6:55 am Pacific, U.S. markets continue to charge higher with the S&P up 6 points while the Dow has gained another 51 points to 14506…the TSX is up 22 points while the Venture Exchange is down 2 points to 1113…

Canadian Dollar Chart Update

Canadian equity markets perform best when the loonie is strong, and weakness in the Canadian dollar since the fourth quarter of last year helps explain why the Venture Exchange has been struggling in recent weeks and months…the dollar’s massive rally from early 2009 into 2011 (77 cents to $1.06) corresponded with the Venture’s powerful run, while consolidation by the dollar since then has contributed to the weakness in the Venture…it’s therefore critical to keep a close eye on the direction of the loonie…at the moment, RSI(14) is in a strong support zone as shown in John’s 3-year weekly chart below, while price support is very evident between 95 and 97 cents…the start of a sustained new uptrend in the dollar (too early to predict at this point) would be a very positive sign for the Venture…

CRB Index Chart Update

Important support has been holding at 290 on the CRB Index, and another encouraging technical sign for a potential rebound in the commodity sector is a Slow Stochastics crossover as shown in John’s 2.5-year weekly chart below…the CRB has been trading in a horizontal channel between 290 and 306 since October…

Discovery Ventures (DVN, TSX-V) Chart Update

Discovery Ventures (DVN, TSX-V) was one of the top performers on the Venture during the fourth quarter of 2012 and also completed a financing in excess of $2 million while closing its Willa Property acquisition…a normal retracement may have run its course this week with the stock hitting an intra-day low of 20 cents Tuesday….yesterday, DVN climbed a nickel to close at 27.5 cents, though volume was light…below is a 2.5-year weekly chart from John…as always, perform your own due diligence…

Note: John, Jon and Terry do not hold share positions in DVN.