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Gold has traded between $1,185 and $1,200 so far today…as of 9:00 am Pacific, bullion is up $7 an ounce at $1,195…Silver has added 19 cents to $16.56…Copper is strong at $2.93…Crude Oil has climbed above $60 a barrel this morning for the first time since December 11…it’s currently up nearly $2 a barrel to $60.89, thanks in part to reports of slowing output from Libya…the U.S. Dollar Index, meanwhile, has fallen one-quarter of a point to 95.17…

The Commerce Department reported this morning that the U.S. trade deficit surged to its highest level ($51.4 billion) in nearly six-and-a-half years in March, another sign that the strong greenback is hurting the U.S. manufacturing sector…it was the biggest percentage jump since December 1996…with March’s trade deficit coming in worse than assumed, growth is likely to be revised down to show a contraction when the government publishes its second GDP estimate later this month…that is what has given bullion another lift this morning while knocking the Dollar Index down after it hit an early morning high of nearly 96…

The Gold market will also continue to remain focused on the U.S. payrolls number to be released Friday, and another weak report on the heels of the very disappointing March data could allow bullion to finally gain traction above $1,200 an ounce…the expectations of some analysts that as many as 275,000 jobs were added in April could be wildly off the mark…

Mineweb’s Lawrence Williams wrote this morning (www.Mineweb.com) that “for the second week in a row, Gold withdrawals from China’s Shanghai Gold Exchange (SGE) have been at around 50 tonnes – a high level for the post Chinese New Year period. Withdrawals from the exchange for the first 16 weeks of the year have already reached around 780 tonnes suggesting that if flows out of the SGE are maintained we could be in for a new record year with withdrawals well in excess of those of 2013, which totaled almost 2,200 tonnes.”

U.S. Dollar Index Updated Chart

As you can see in the 2.5-year weekly chart below, extreme overbought RSI(14) conditions in the U.S. Dollar Index persisted from last September until the beginning of April…the surge from the low of 79 in the 2nd quarter of last year to the high of 100.71 in mid-March was one of the most explosive moves by the greenback on record, predicated on the widely held assumption of a Federal Reserve rate hike by June…that has about as much of a chance at happening now as a re-election of the Progressive Conservatives today in Alberta…

This is important for the near-term direction of the Venture…the immediate test for the Dollar Index is whether it can hold support roughly in a range between last week’s low (94.47) and the 96 level, and then reassert its strength…

It’s noteworthy that for the first time since its move began last summer, the Dollar Index is now trading below its 50-day moving average (SMA) which is flattening out and threatening to roll over later this month…ultimately, the potential of a major correction in the Dollar Index to the high 80’s can’t be ruled out, and that would be very bullish for commodities and the Venture…

Euro Updated Chart

Additional evidence that the Dollar Index could be on the verge of breaking down…the euro appears to have put in at least a temporary double bottom around 105…at this point, it likely needs to ease off slightly to test what should be new support at 110, just above the 50-day SMA which has flattened out and could soon start to reverse to the upside – just the opposite of what may occur with the U.S. Dollar Index…

Important Copper Update

This is a fascinating chart going back 20 years…

Copper is actually coming off its best weekly performance since 2011, and (critically) has pushed above an RSI(14) downtrend line that has been in place since shortly after the 2011 all-time high of $4.65 a pound…

The long-term uptrend support line from the 2001 low has held…notice also the 4 circled RSI(14) lows…they each corresponded with important market bottoms and were followed by powerful upside moves…

Currently, the metal is trading within a bullish downsloping flag on this monthly chart, sell pressure has abated significantly, and the -DI indicator has likely peaked…

This is not to say Copper is about to immediately “go through the roof”…what this chart does give us, though, is compelling evidence that a major turnaround is in its early stages, that $2.42 was likely the bottom of a correction that spanned nearly 4 years…a breakout above the downsloping flag would certainly confirm this interpretation…

Today’s Equity Markets

Asia

China’s Shanghai Composite, overdue for a pullback, was knocked down 4% overnight, losing 182 points to finish at a 2-week low of 4298…news reports came out that several Chinese brokerages have tightened requirements for margin lending…

Europe

Most European markets were down sharply today…

North America

The Dow has lost 72 points as of 9:00 am Pacific…interesting – many investors appeared to ditch American stock funds last month in the biggest exodus since the financial crisis…but far from taking that as a bad sign, it could be interpreted as an indication that stocks have more room to run…

In April, U.S. equity mutual funds and ETFs saw outflows of $35.8 billion, according to TrimTabs…that’s the biggest move away from American stocks since October 2008…and the bearish tone is confirmed by the flows in the leveraged ETF space, where leveraged short ETFs saw an increase in assets of 4.6%, while leveraged long ETFs saw assets dip by 2.5%…

In Toronto this morning, the TSX is off 126 points as of 9:00 am Pacific while the Venture is actually up 2 points at 701…

GoldQuest Mining (GQC, TSX-V) Update

If Copper is set to strengthen more as the year progresses, investors should keep an eye on GoldQuest Mining (GQC, TSX-V) which has retraced as expected in recent days after a sudden spike from 8.5 cents to 20 cents in just 4 trading sessions…the company released a revised and more robust PEA for its Romero and Romero South Gold-Copper deposits in the Dominican Republic last Wednesday, and GQC’s exploration upside in the DR remains huge – more discoveries are very possible despite a string of disappointing results the last couple of years…

GQC is finding support at its 200-day SMA (13.5 cents) while its 100-day SMA (11 cents) has reversed to the upside…what to watch for with GQC is this – a potential breakout above the downtrend line shown below…that’s where it met resistance last week…many technical indicators will flash a major buy signal if or when GQC is able to climb above 20 cents…

GQC is up half a penny at 14.5 cents as of 9:00 am Pacific…

Cannabix Technologies Inc. (BLO, CSE, BLOZF, OTC) Update

Recent selling in Cannabix Technologies (BLO, CSE) got overdone and those who unloaded out of fear around 29-30 cents unfortunately gave up their shares at very strong support around last year’s high and the bottom of a downsloping flag that has recently developed…

BLO’s marijuana breathalyzer is an exciting “disruptive” technology with enormous company-building possibilities for Cannabix…we expect continued strong news flow…despite the retreat from the February high of 77 cents, the primary trend remains very bullish which should result in an eventual breakout above the downsloping flag for the next major leg up…

BLO is a penny higher at 38 cents on the CSE as of 9:00 am Pacific…

Note:  John and Jon both hold share positions in BLO.