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Gold has traded between $1,321 and $1,333 so far today, hitting a three-month high…as of 8:30 am Pacific, bullion is up $3 an ounce at $1,329…Silver has jumped 24 cents to $21.21…Copper, which hit a 4-month high yesterday, has added another 4 cents to $3.22 (resistance at $3.20, so watch for a potential confirmed breakout above this level)…investors are focusing on a rebound in manufacturing worldwide, which they expect will boost Copper demand broadly…increasing consumption by factories may offset any decline in the use of Copper as collateral for bank loans as a result of a probe in China (some analysts estimate at least one-third of China’s Copper imports are used as collateral)….Copper is also playing catch-up to other industrial metals which have soared in recent months on expectations of stronger demand from the world’s largest economies…Copper still is down about 5% this year, compared with a 6% gain for Zinc and a 4% increase in Aluminum prices…

Crude Oil is off 9 cents to $105.25…U.S. consumers will see the most expensive July 4th gasoline prices in six years, according to analysts at www.GasBuddy.com…in Canada, Alberta has the cheapest average gas price at $1.25 a liter while B.C. is the most expensive province for filling up the tank with an average price per liter of $1.45…

The U.S. Dollar Index has added more than one-tenth of a point to 79.97 (see updated chart below)…

Physical demand is providing some support for Gold as reflected by U.S. Mint sales and Turkey’s Gold imports, according to HSBC…the bank cites U.S. Mint data showing June Gold coin sales totaled 64,500 ounces, up 34% from 48,000 in May, although down 13% from 74,000 in June 2013…the bank also cites data from the Istanbul Gold Exchange saying Turkish Gold imports doubled to 24.3 metric tons in June, the highest since December, from 11.8 tons in May, while Silver imports rose to 34.5 tons in June from 17.3 tons in May…

SPDR Gold Trust, the world’s largest Gold-backed ETF, said its holdings rose 5.69 tonnes yesterday to 796.39 tonnes…

Today’s Equity Markets

Asia

China’s Shanghai Composite gained 9 points overnight to close at a two-week high of 2059…Japan’s Nikkei average was up slightly to 15370…

Europe

European markets were mostly slightly higher today…no change in ECB monetary policy is expected tomorrow when the central bank holds its monthly policy meeting…

North America

The Dow and S&P 500 rallied to fresh highs yesterday, kicking off the second half of the year on a bullish note…yesterday’s move took the Dow just shy of 17000, which would be the next milestone in a more than five-year rally for stocks following the 2008 Crash…yesterday’s close marked the 12th record for the Dow this year, and it left the blue chips up 2.3% for 2014…the S&P 500 added 13 points to 1973, with the widely followed benchmark chalking up its 23rd record close of the year…the broader S&P has fared better than the Dow, gaining nearly 7% in 2014…

Private sector job creation surged in June, with companies adding a much larger than expected 281,000 new positions according to a report this morning from ADP (ahead of tomorrow’s non-farm payrolls report from the Labor Department)…economists surveyed by Reuters had expected the National Employment Report to show 200,000 new jobs as the U.S. economy seeks to regain traction following a brutal winter…

Falling corporate bond spreads and volatility indicators are signs that investors may not fully appreciate the risk of future losses, Fed Chair Janet Yellen warned today…taking a variety of factors into consideration, “I do not presently see a need for monetary policy to deviate from a primary focus of attaining price stability and maximum employment, in order to address financial stability concerns,” she said.  “That said, I do see pockets of increased risk-taking across the financial system, and an acceleration or broadening of these concerns could necessitate a more robust macroprudential approach,” Yellen stated in prepared remarks for a speech at the International Monetary Fund…

As of 8:30 am Pacific, the Dow is up 5 points, the TSX has added 63 points while the Venture is 5 points higher at 1033…

U.S. Dollar Index Updated Chart

How the U.S. Dollar Index performs during this second half of 2014 will certainly have an impact on Gold, positive or negative…typically, a declining 200-day moving average (SMA) has led to some steep drops in the Dollar Index as witnessed during four other periods over the last dozen years…currently, the Dollar Index is being constrained by a declining 200-day around 80 but has yet to get driven below key support at 79…that of course could change in the coming months…

Declining RSI(14) highs are not a positive sign for the Dollar Index which continues to trade within a symmetrical triangle as seen in this 24-year monthly chart…what’s really important to keep an eye on is the short-term “squeeze” between the top of the triangle and the the 79 support level – this may or may not be resolved this year, we’ll have to wait and see…

We’re inclined to believe that the next major move in the Dollar Index will be to the downside given the fact that Gold has bottomed in our view and the Venture Exchange is looking so bullish…both often move counter to the greenback…

Q2 Performance Chart

The Venture out-performed both the Dow and Gold during the second quarter with a gain of nearly 3.5%…below is a Q2 performance chart featuring the CDNX, Gold, Silver, Copper and the CRB Index…Silver led the way with a quarterly gain of 6.6%…

TSX Gold Index Updated Chart

This 15-year monthly chart certainly shows a bullish pattern for the TSX Gold Index after it found very strong support around the 150 level…RSi(14) at 43% is climbing an uptrend line…

The key area to watch is 210 – that’s where important chart resistance intersects with a long-term downtrend line…a confirmed breakout above 210 could very easily result in a rapid 20% move to the 255 Fib. resistance – a very possible scenario for later this quarter in conjunction with a surge by the Venture…

The Gold Index is unchanged at 197 through the first two hours of trading today…

Balmoral Resources Ltd. (BAR, TSX) Update

Balmoral Resources (BAR, TSX), enjoying success on the exploration front, has been a stellar performer since an important breakout noted by John in early May above resistance around 90 cents…BAR closed at $1.64 Monday and hit a new 52-week high of $1.76 in early trading today…BAR clearly has momentum on its side, both on the ground and in the market, and certainly appears to be on its way to a new all-time high…

The 10 and 20-day SMA’s have been close supporting moving averages – buying on pullbacks to those areas over the last 2+ months has proven to be a smart trading strategy…RSI(14) on this 1-year weekly chart shows how overbought conditions on a “hot” play can persist for an extended period…

As of 8:30 am Pacific, BAR is up 7 cents at $1.71…note the near-term Fib. resistance at $1.69 – we’ll see if BAR can overcome that this week…

Discovery Ventures Inc. (DVN, TSX) Update

Discovery Ventures (DVN, TSX-V) is advancing an interesting Gold-Copper-Silver deposit (Willa) in southeastern B.C. with high Gold and Copper grades, complemented by the fully permitted Max mine and mill facilities just over 100 km away…if we see even higher Gold and Copper prices during Q3, as seems likely, Discovery should attract an even wider audience given the package they have assembled…the importance of the Max mine and mill cannot be understated – the company negotiated an incredible deal to secure that valuable asset and critical infrastructure which also sits on 5,500 hectares and is a past producing molybdenum operation with the potential to host significant resources…

Technically, like with Balmoral when it surged through 90 cents, DVN recently staged a pivotal breakout above important resistance – 23 cents which is now new support…DVN climbed as high as 31.5 cents June 20 and then retraced to the support area…it’s unchanged at 25 cents as of 8:30 am Pacific…as always, perform your own due diligence…

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