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Gold has traded between $1,403 and $1,418 so far today…as of 7:15 am Pacific, bullion is down $9 an ounce at $1,409…expect some more bouncing around, and we’ll see how strong the $1,400 level in terms of potential new support…Silver is off 33 cents at $24.07…Copper is down 4 pennies at $3.24…Crude Oil has slipped 81 cents to $109.29 as it continues to flirt with the important $110 resistance level, while the U.S. Dollar Index has gained half a point to 81.92…

Bullion is headed for a 2nd straight monthly gain (it closed July at $1,323) thanks to a variety of factors including some weaker-than-expected U.S. economic data, higher Oil prices, geopolitical tensions, a drying up of ETP selling, strong Asian demand, and fresh technical strength…the next major resistance area, according to John’s latest chart (3-year weekly), is $1,475 – followed by the previous support band between $1,550 and $1,600…September is traditionally Gold’s strongest month of the year, so it’ll be interesting to see what unfolds in the coming weeks especially with many economists still expecting the Fed to begin scaling back its asset purchases at its meeting September 17-18…we believe that’s much less likely to occur given recent economic data as well as the political dynamics in Washington (debt ceiling debate coming up)…the prospect of Fed tapering has also been hurting several emerging markets due to an outflow of foreign capital as U.S. long-term interest rates rise…Brazil and Indonesia, alongside India, Turkey and South Africa, have been the hardest hit countries in a brutal sell-off triggered by expectations for an unwinding of the U.S. monetary stimulus that has provided global markets with ample liquidity in recent years…

Gold hit an all-time high against the Indian rupee yesterday…National Bank mining and metals equity research analyst Paolo Lostritto pointed out that consumers throughout India have been hoarding Gold the last few months in anticipation and fear that the country’s currency would be devalued…“Even though their cost of buying Gold has gone up by 10%, on a net basis, because their currency has fallen so much, they are still up,” he said (source: Kitco). “It has actually reinforced people’s thinking and psychology towards Gold.”

Today’s Markets

Asian markets were mixed overnight…Japan’s Nikkei average gained 121 points to close at 13460 while China’s Shanghai Composite slipped 4 points to 2097…European shares are generally moderately higher in late trading overseas…

The Dow is up 43 points through the first 45 minutes of trading…the U.S. economy accelerated more quickly than expected in the 2nd quarter to a 2.5% annual rate, according to the Commerce Department…the government had initially estimated that GDP expanded at a 1.7% clip in the 2nd quarter…meanwhile, weekly jobless claims declined 6,000 to a seasonally adjusted 331,000, according to numbers released this morning by the Labor Department…the TSX is up 59 points while the Venture has climbed 6 points to 939 as of 7:15 am Pacific…

Venture Exchange Updated Chart

Some investors have been a little unnerved about the drop in the Venture over the last couple of days (down 18 points Tuesday, 3 points yesterday) but the Index has strong support around current levels…these type of minor pullbacks should be viewed as an opportunity as they’re completely normal in the context of a bullish broader picture, which is what we see…below is an updated chart from John to illustrate our point…the Index closed yesterday at 933, finding support at its rising 20-day moving average (SMA) and the 100-day SMA which previously was strong resistance…RSI(14) has unwound to 53 and is now resting at support…the Index, it appears, is gearing up for an assault on critical resistance at 970, and a move through that area on strong volume would constitute a very significant breakout…the Venture’s 50-day SMA has reversed to the upside which gives the bullish scenario greater credibility…

Venture 9-Month Daily Chart

Colorado Resources (CXO, TSX-V) Update

Investors often over-react, to the upside or the downside, and an over-reaction in our view is exactly what occurred yesterday as Colorado Resources (CXO, TSX-V) tumbled nearly 40% to close at 43 cents following the release of 9 additional drill hole results from North ROK…investors looking for a “hot” headline number were disappointed as the best result (NR13-013) was an interval of 402.2 metres grading 0.28% Cu and 0.27 g/t Au (0.45% CuEq)…that’s still a very respectable intersection for this type of porphyry system, however, and it was also a 400-metre step-out to the southeast from the original discovery hole (333 metres grading 0.51% Cu and 0.67 g/t Au as reported April 25)…a few other holes were quite decent while some were disappointing, especially considering this round of drilling has been focused on a continuous and strong magnetic high core…keep in mind a few things, though…these are still the very early stages for North ROK…drilling continues, and the company has also just been permitted for an additional 40 holes…the potential deposit, which could still be very large, remains open along strike in both directions and at depth…nailing down the geometry, size and grade of this system is a major challenge for Colorado but they have the technical team to figure it out…1800 metres of mineralized intersections at North ROK to date have averaged 0.30% Cu and 0.37 g/t Au…the very economically robust Red Chris deposit to the southeast has a measured and indicated resource of 936 million tonnes grading 0.37% Cu and 0.38 g/t Au…investors also are forgetting that Imperial Metals (III, TSX) missed on 25% of the numerous holes it drilled at the Red Chris in 2011 and 2012…that’s exactly the percentage CXO has missed on so far…ultimately, many, more more holes are going to have to be drilled into North ROK…for sure, some will be “dusters” (probably 25%), many will be very average while some additional stellar hits like the original hole can also be expected…CXO will be volatile and smart money will see value in the bigger picture and jump in aggressively on technically oversold conditions…

CXO tumbled through an important support area in the mid-to-upper 60’s yesterday and that certainly didn’t help matters, contributing to the selling pressure…the good news is, as you can see on John’s 3-year monthly chart, there’s a long-term support band between 40 and 43 cents…this includes the rising 300-day SMA, with the rising 500-day SMA directly below in the high 30’s…the stock has firmed up this morning on good volume with CXO climbing a nickel to 48 cents as of 7:15 am Pacific…

Manitou Gold Inc. (MTU, TSX-V)

Bottom fishers may wish to perform their due diligence on Manitou Gold (MTU, TSX-V) and keep it on their radar screens…MTU appeared to bottom out at 2 cents in mid-July, and that all-time low was followed soon after by a considerable jump in volume…nearly 2 million shares traded July 30 when MTU climbed 2 cents to close at 7.5 cents…since then, it has traded between a nickel and 7.5 cents on lighter volume…MTU was originally listed on the Venture in 2010 and zoomed from the low ’40’s to over $1 per share in early 2011 when it hit some high-grade intersections at its Kenwest Property, part of a large package (nearly 200 sq. km) of very prospective holdings in the historical Gold Rock district of northwestern Ontario…in early June, MTU commenced exploration programs (geochemical surveys, mechanical trenching, structural mapping and channel sampling) on the Kenwest, Elora and Canamerica projects…this is expected to be followed up by drilling…as of June 30, MTU had nearly $2 million in its treasury…the company has 54 million shares outstanding…another high-grade discovery, very possible given the ground they are exploring, would give the stock another major lift…the overall bearish trend is weakening, as shown in John’s 2.5-year weekly chart, and a recovery appears to be well underway…as always, perform your own DD…

Radius Gold (RDU, TSX-V)

We brought Simon Ridgway’s Radius Gold (RDU, TSX-V) to our readers’ attention recently, given its very strong working capital position and various promising projects in Mexico, Nicaragua and Guatemala, some of them under JV with B2Gold Corp. (BTO, TSX) and Fortuna Silver Mines Inc. (FVI, TSX)…we’ll be digging more into these properties in the weeks ahead…it’s clear to us on the chart that RDU put in an important bottom at 6 cents this year in late June, in conjunction with lows in the Venture and Gold, and a recovery is underway…at yesterday’s close of 12 cents, RDU is still trading below its working capital position…sell pressure in the stock, dominant for much of the past 2.5 years as you can see in John’s weekly chart, has reversed into buy pressure, and that’s always an encouraging sign…current resistance is at 15 cents while the rising 20-day SMA is providing support at 12 cents…as always, perform your own DD…

Note: John, Terry and Jon do not hold share positions in RDU or MTU.  Jon holds a share position in CXO.