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In a healthy retracement, bullion fell into the top range of the $1,150 to $1,200 support band this morning before buyers quickly stepped in and prices firmed up…as of 10:15 am Pacific, Gold is flat at $1,209 in the midst of some “backing and filling”…Silver is down 3 cents at $15.30 (updated charts in today’s Morning Musings)…Copper is unchanged at $2.06…Crude Oil is off 35 cents at $29.03 while the U.S. Dollar Index has climbed one-third of a point to 96.91…

Gold’s weekly gains have accelerated over the past month (from $9 to $20 to $55 to $65 an ounce) with the metal doing something very significant from a technical standpoint – it has finally pushed through critical resistance at the top of a long-term downsloping flag that developed during the bear market that intensified during 2012 and 2013…the breakout point was around $1,200, so a vigorous re-test of that area as potential new support is normal and healthy…in general, a very strong band of support begins at $1,150, just above the now-rising 200-day moving average (SMA)…an unwinding of temporarily overbought conditions has been occurring since Friday…

Goldman Sachs’ commodity analysts appear to be ignoring the charts across a broad array of markets…hefty stock market plunges this year have not been justified, they argue, and they’re also urging clients to short Gold which has found favor during the first 6 weeks of a turbulent 2016 (in a way that is different than the beginning of last year)…

“Systemic risks from Oil, China and negative rates are very unlikely,” a team at the bank, led by Jeffrey Currie and Max Layton, said late yesterday.  “Banks have ample liquidity to maintain funding against higher capitalization, the negative macro impacts from low Oil prices have likely already played out and are not systemic while the spillovers from China are limited and the U.S. is far from recession.”

Okay, so everything’s good, according to Goldman Sachs – let’s see what they have to say 6 months from now when the “spillover” from China, for one, could turn into a tsunami…banks there are not in good shape, the economy isn’t expanding at the rate the government says it is, deflation problems are accelerating, and equity market risks remain high…add this to a host of problems around the globe, and that’s why Gold has been the best performing asset so far in 2016…it’s telling us something…

Crude Oil Update

A rather feeble attempt by OPEC and non-OPEC members today to give Oil prices a lift…4 of the world’s largest producers have agreed to freeze output at January levels if other major exporters join the pact…this is far from a production cut, and who’s to say one or more of those countries won’t cheat if indeed some sort of a “pact” comes to fruition?…

Qatari energy minister Mohammad bin Saleh al-Sada told a news conference that the step would help to stabilize the Oil market…we’re not so sure…the market may view this as a very weak attempt to improve a huge supply/demand balance, akin to bringing a pea-shooter to a gun fight…

Fundamentals in the Crude market remain grim with daily supplies grossly outpacing demand…record-high North American Crude inventories are set to surge even further in the coming months, potentially putting further downward pressure on global Oil prices even as OPEC leaders muse about a possible production deal that would buttress the market…commercial storage facilities in the U.S. hold record amounts of Crude – inventories are sitting at more than 500 million barrels, up 20% from already elevated levels in February 2015…stocks at Cushing, Okla. – the key hub where the price of West Texas intermediate is set – hit 65 million barrels this month, 50% higher than last year and rapidly approaching the current 73-million-barrel capacity…

The number of rigs in operation continue to fall at a much more rapid rate than stubborn U.S. production, dropping 30 to 541 last week in the U.S., down from 1,358 a year ago, according to Bakers Hughes…in Canada, the number of rigs in operation fell to 222 from 380 at this time last year…

UBC Rejects Radical Student/Faculty Anti-Fossil Fuel Proposal

The University of British Columbia’s board of governors has rejected a proposal by faculty and students to sell off investments related to Oil, Gas and Coal, marking the latest blow for a ridiculous national movement to rid university endowments of their involvement in fossil-fuel industries which built this country and contribute so significantly to our prosperity…instead, the board voted yesterday to put $10-million toward a new fund that would invest in low-carbon ventures, which will be set apart from the more than $1.4-billion the school currently has in endowments…

In today’s Morning Musings…

1.  How Gold has started what could become a very powerful “Wave 5” advance over the couple of years…

2.  The next key hurdle for Silver before $18…

3.  How to gain exposure to an exciting Canadian drone/technology deal (before it starts trading) at just a nickel…

Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…