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Gold has traded between $1,243 and $1,250 so far today…as of 8:30 am Pacific, the yellow metal is down $1 an ounce at $1,244…Silver is up a penny at $18.82…Copper has hit a three-week low this morning, currently down 4 cents at $3.11…the metal has been pressured today by signs that the market isn’t quite as tight as was thought recently (significant drop in premiums for delivery into China the past week), and doubts about the outlook for demand from that country…traders are also concerned about disruptions to some shipments at China’s third-largest port of Qingdao, related to a probe into the use of the metal as collateral in financing…also pressuring Copper is an attempt to restart Copper concentrate exports from Indonesia, after a ban there…Crude Oil has added 66 cents to $103.32 while the U.S. Dollar Index is up slightly at 80.62…

The ECB is widely expected to offer stimulus tomorrow in order to spur inflation and jump-start the region’s sluggish economy, but ECB President Mario Draghi has disappointed the markets before and may not go far enough to meet some traders’ rather high expectations…most analysts expect the ECB to cut its main interest rates, while many think it could take further steps to boost liquidity and could even go as far as a program of asset purchases (QE)…if the ECB announces such new measures, the euro may weaken and the dollar may strengthen – a scenario for a further drop in Gold prices…however, the potential also exists for the opposite to occur as some sort of action by the ECB has already been priced into the market, with hedge funds even strongly shorting the euro last week, and anything that misses market expectations may actually bring buying into the euro and selling into the dollar…it’ll be an interesting day tomorrow…

Today’s Markets

Asia

China’s Shanghai Composite slipped 13 points overnight to close at 2025…Japanese shares managed to end at a fresh two-month peak for the third straight day following a choppy session of trading…the Nikkei closed up 34 points at 15068…

Europe

European markets were mixed today…the final reading of the composite Purchasing Managers’ Index (PMI) – which measures both the manufacturing and services sector – posted a figure of 53.5, down only slightly from April’s near-three year high of 54.0, according to data provider Markit…this signaled a continued recovery and growth in the region for the 11th month running…

North America

The Dow is up 6 points through the first two hours of trading…job creation in the private sector was disappointingly slow in May, with companies adding just 179,000 positions, according to the latest reading from ADP and Moody’s Analytics…economists in a consensus survey expected ADP’s national employment report to show the economy created 215,000 private payrolls in May, down from the prior month’s 220,000 figure…the number could cause economists to ratchet down the projections for Friday’s non-farm payrolls report from the Labor Department which is projected to show an addition of 210,000 positions for the month…

The TSX has gained 31 points while the Venture is down a point at 981 as of 8:30 am Pacific…

U.S. Dollar Index – Trend Change Under Way?

It’ll be very important to keep an eye on the U.S. Dollar Index through the balance of this week for confirmation that a bullish trend could be under way…again, news out of the ECB tomorrow and Friday’s jobs report will dictate which direction the dollar goes…traders have been anticipating a bullish outcome for the greenback in recent trading sessions – they could be right, or they may end up disappointed…the Dollar Index has rallied after touching long-term support at 79 last month, and has now broken above its 200-day moving average (SMA) for the first time since last fall…RSI(14) has also pushed above a downtrend line in place since last year…these bullish technical signs cannot be ignored…Friday’s Dollar Index close will be very important in terms of gauging whether a trend change is occurring here…

Euro Chart Update

The general consensus is that a stronger euro is Gold-bullish, so are there any technical clues as to where the euro is headed?…what’s interesting to note is that the euro is at a critical juncture as it meets resistance between 137 and 140…

As you can see on this 11-year monthly chart, the euro is threatening to break out above multi-year downtrend lines…whether it does or not remains to be seen, but the current upsloping channel is interesting, while the ADX indicator has given a clear bullish trend signal since the middle of last year…

Balmoral Resources Ltd. (BAR, TSX) Update

Balmoral Resources (BAR, TSX) has arranged a bought-deal flow-through financing through Canaccord Genuity Corp. at a price of $1.75 (a 59% premium to BAR’s seven-day volume-weighted average trading price, though of course this is a flow-through PP) for gross proceeds of $4 million…closing of the offering is expected on or before June 20…

Plans for BAR’s summer drill program at Martiniere on the Detour Trend are currently being finalized, with drilling expected to resume late this month or by early July…the focus will be on additional expansion and infill drilling along the northern segment of the Bug Lake Gold trend, additional testing of the newly identified steep along the southern extension, and testing of several other high-priority targets within the broader Martiniere Gold system…

Balmoral has been delivering some excellent exploration results and any consolidation in the stock price should be viewed as healthy in the context of a long-term bullish trend…BAR is up 7 cents at $1.25 as of 8:30 am Pacific…keep in mind that this 1-year weekly chart is showing overbought RSI(14) conditions that will need to unwind at some point, and Fib. measured resistance remains at $1.29…

North American Nickel (NAN, TSX-V)

North American Nickel (NAN, TSX-V) continues to be one of the few “shining lights” in the exploration sector at the moment…we expect an exciting summer for NAN as it carries out aggressive drilling at its highly prospective Maniitsoq Project (Ni-Cu-Co-PGE) in southwest Greenland…

Technically, NAN staged a confirmed breakout above 38 cents nearly a month ago and the next major resistance is a band between 47.5 cents and 51 cents as you can see in this 2.5-year weekly chart…there has been a strong increase in buy pressure during the second quarter, replacing the sell pressure that was dominant since late 2012, though this buy pressure is currently in decline…NAN is up half a penny at 45 cents as of 8:30 am Pacific…

Pilot Gold Inc. (PLG, TSX)

Fib. support levels have been holding for Pilot Gold (PLG, TSX) which recently raised $20 million in a bought deal at $1.53 after the company announced more very encouraging high-grade drill results from its promising Kinsley Mountain Western Flank target in Nevada…this project has tremendous geological potential, and we encourage readers to perform their own due diligence…a $6 million, 25,000-metre program resumed about a month ago with one core rig and two RC rigs after a successful winter program…

Below is a 1.5-year weekly chart from John outlining the Fib. retracement levels ($1.15 to $1.37) following the March 12 intra-day high in the $1.70’s…RSI(14) appears to have found support in the immediate vicinity of the 50% level…

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