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Gold has traded between $1,206 and $1,222 so far today…as of 8:15 am Pacific, bullion is down $7 an ounce at $1,215…Silver, which surged nearly 5% last week, is off 15 cents at $16.89…Copper down a penny to $2.95…Crude Oil has fallen another $1 a barrel to $56.86 while the U.S. Dollar Index has gained one-third of a point to 88.55…

The Gold market will be paying close attention to the outcome Wednesday of the U.S. Federal Reserve’s policy meeting beginning tomorrow…speculation that the central bank might remove language in its statement saying rates will remain near zero for a “considerable time” has put Gold under some minor pressure in recent days…in addition, bullion is digesting back-to-back weekly gains of $29 and $24, respectively…

A strong support band for Gold currently exists between the $1,180’s and the $1,216 Fib. level as John showed in a chart yesterday…a pattern of higher daily highs and higher daily lows has been seen since the early November low around $1,130…the $1,240 area is key resistance…

Analysts from Barclays noted, “In early January, the demand baton will likely pass from India to China as festival-related buying picks up ahead of the Lunar New Year, which falls on February 19.  Provisional estimates show India imported 200 tonnes of Gold in November following imports of 109.5 tonnes in October; this takes imports for the fiscal year to 640 tonnes, compared with 638 tonnes for the full year ended March 2014.”

U.S. Mint American Eagle Silver coins made history last week, topping 400 million in all-time sales and setting a new annual sales record as sales have surpassed 43 million for 2014…HSBC analyst James Steel noted, “The beauty of coin demand is that it is a very good barometer of retail demand.”

Today’s Equity Markets

Asia

China’s Shanghai Composite bucked the general trend in Asia overnight, climbing 14 points to close at 2954…

Japan’s Nikkei average slipped 272 points on weak manufacturing sentiment…the ruling coalition in Japan won a majority of seats in lower house parliamentary elections yesterday, opening the door for continued economic reforms designed by Prime Minister Shinzo Abe to pull the country out of recession…

A sharp sell-off slammed a few key markets in Southeast Asia overnight as jitters grew over potential U.S. monetary tightening, and fractures in emerging markets started to appear…the Indonesian rupiah plummeted to its weakest level since 1998, while stocks in Thailand dove as much as 9% before recovering…

Europe

European markets are down moderately in late trading overseas…

North America

Wall Street has turned lower after equities started the day on a positive note…as of 8:15 am Pacific, the Dow is down 57 points…

U.S. manufacturing output recorded its largest increase in 9 months in November as production expanded across the board, pointing to underlying strength in the economy…factory production increased 1.1% last month after an upwardly revised 0.4% advance in October, the Federal Reserve reported this morning…economists polled by Reuters had forecast manufacturing output rising by only 0.5% in November after a previously reported 0.2% gain in October…mining output was a laggard, slipping 0.1%…

In Toronto, the TSX is off its highs of the day but still up 9 points, while the Venture has retreated 3 points to 651 as of 8:15 am Pacific…

NioCorp Developments (NB, TSX-V), which has been showing some technical bullishness according to John’s charts, has jumped 6 cents to 76 cents after some positive news this morning…the company has entered into an off-take agreement with ThyssenKrupp Metallurgical Products GmbH whereby ThyssenKrupp will purchase approximately 3,750 tonnes or roughly 50% of NioCorp’s planned ferro-niobium production from its Elk Creek deposit for an initial 10-year term, with an option to extend beyond that time frame…the agreement presupposes the company obtaining project financing, obtaining all necessary approvals and constructing a mine at Elk Creek…

Oil Update

Oil was a key driver in equity markets last week, and that trend may continue…prices stabilized in early trading today, following reports of clashes in Libya over the weekend that disrupted exports, but Crude is once again coming under pressure given the weakening demand outlook and over-supply concerns…

On Friday, the IEA cut its forecast for next year’s Oil demand growth by 230,000 barrels a day to 900,000 barrels a day…OPEC and the U.S. Energy Information Administration also lowered their demand growth forecasts for 2015…the cuts exacerbated last week’s sell-off that saw the U.S. Oil benchmark dropping more than 12% to settle at its lowest level on Friday since May 15, 2009…

The market this week will be looking at data on the health of the major global economies to gauge whether sluggish demand will continue into 2015….the U.S., China and Europe are scheduled to release their PMI’s tomorrow…

While some countries, states and provinces that rely heavily on Oil exports are suffering (Alberta, for example, loses more than $200 million in revenue on every $1 drop in the Oil price), lower Oil prices are giving many consumers the equivalent of an instant tax cut…CNN reported this morning that after a weekend of price cutting at stations, gas for less than $2 a gallon can be found in 13 states across the country…2 weeks ago there was only 1 gas station in the country selling gas that cheap…the average American consumer with a vehicle is now saving approximately $100 a month, and consumer spending accounts for more than two-thirds of U.S. GDP…

The drop in the Oil price is already biting into companies’ capital budgets for 2015…Tourmaline Oil Corp. (TOU, TSX) reported this morning that it will now execute a 16-rig drilling program for 2015, down from the current 20 operated rigs…this will reduce the company’s full-year 2015 capital program to $1.4 billion from the original $1.6 billion budget, which will result in approximately 30 less new wells in 2015…

WTIC Long-Term Monthly Chart

Technically, the next target area for WTIC is around $50 a barrel, though it’s uncertain how quickly that could come about given that very oversold conditions already exist…

WTIC has broken below a long-term uptrend line and will now face very stiff resistance beginning in the low $60’s…we’re looking at a major change in trend here which ultimately may mean that Oil will test long-term support in the $35 to $40 area…

Oil – TSX Gold Index Comparative Chart

Major rallies in the TSX Gold Index have often coincided with falling or weak Oil prices, so investors should be searching for high-quality producers that have the potential to take advantage of the current environment…

Gold mining is an energy-intensive industry, which is why HSBC Securities calculates that a 20% fall in Oil could reduce miners’ overall costs by 2% to 6%…but not all miners will feel the full benefits…around half of Barrick Gord Corp.’s (ABX, TSX) exposure to Oil, for example, is hedged at $86 a barrel…

Another macroeconomic benefit has been the rising U.S. dollar, which lowers costs in countries where miners operate…Yamana Gold Inc. (YRI, TSX), which mines in Canada, Brazil, Argentina and Chile – says that for every 10% devaluation in these countries’ currencies, its mining costs fall by $40 to $50 an ounce…Yamana’s costs averaged $807 an ounce in the third quarter…

Below is a WTIC – TSX Gold comparative chart, and already you can see how the Gold producers and Oil are starting to go in opposite directions…

AuRico Gold Inc. (AUQ, TSX) Finds New Porphyry System At Kemess East

A 19-hole drill program (27,000 meters) has uncovered a new porphyry mineralized system at Kemess East, located just 1 km east of the previously delineated Kemess underground deposit and 6.5 km north of the 50,000 tonne per day Kemess mill facility in north central British Columbia…drill results show a higher grade than Kemess Underground (a Feasibility Study on that project was released by AuRico Gold in March of last year and proposes an underground block caving operation with average annual production of 105,000 ounces of Gold and 44 million pounds of Copper over a 12-year mine life)…

Highlights of the drilling at Kemess East include 768 m of 0.44 g/t Au and 0.39% Cu including 132 m of 0.75 g/t Au and 0.50% Cu in KH-14–04; 304 m of 0.56 g/t Au and 0.42% Cu including 76 m of 1.2 g/t Au and 0.66% Cu in KH-14–09; while KH-13–08 intersected 601 m grading 0.50 g/t Au and 0.39 % Cu including 278 m of 0.71 g/t Au and 0.48% Cu in KH-13–08…estimated true thickness of the mineralized intercepts is 70% of the reported lengths…

AUQ is up 16 cents at $3.98 as of 8:15 am Pacific…

Venture 10-Year Monthly Chart

The encouraging aspect of this long-term monthly Venture chart is that the -DI indicator is now at previous peak levels witnessed during the 2008 Crash and the spring of 2013…in other words, especially with the tax-loss season winding down, extreme bearishness should soon give way to a significant rebound but it seems every investor wants the “other guy” to move first…some terrific bargains have opened up in this market, and “first-movers” will reap the biggest rewards…when the Venture turns, it will turn quickly…

ARHT Media Inc. (ART, TSX-V)

If you’re for something different to perhaps add some sizzle to your beaten-up mining stock portfolio, you may wish to consider ARHT Media (ART, TSX-V, formerly Vast Exploration) which has a growing list of Who’s Who on its advisory board as the company trumps its ARHT Platform enabling all forms of human to HumaGram interaction…last week, Mexico’s Carlos Slim, one of the richest men in the world, joined the company’s advisory board that also includes Paul Anka, Larry King, Jason Bateman, Richard “Skip” Bronson, and Michael Buble…

ARHT designs and creates HumaGrams of living, deceased and fictional celebrities…the company also produces HumaGrams of everyday ordinary people and displays them doing extraordinary things…each HumaGram is a digital copy capable of being adapted to virtually any scenario imaginable…the stock started trading in October and has 60 million shares outstanding…technically, it’s looking strong in the early going with support around 40 cents and resistance in the mid-50’s…there could be enough hype and big names behind this to give speculative investors some bang for their buck over the short term at least…ultimately, ART will be driven (into the the stratosphere or into the ground) by the extent of the success (or failure) of its business model…as always, perform your own due diligence…

ART is off half a penny at 49.5 cents as of 8:15 am Pacific…

Silver Short-Term Chart

Silver has finally staged a definitive breakout above a downtrend line that was in place since the summer on this 9-month daily chart…the December 1st dramatic move from an intra-day low of $14.15 to a close above $16 was technically highly significant…as expected, superb support has been demonstrated around $15 and Silver is now consolidating in advance of what could be a near-term test of resistance at $17.50…

Silver Long-Term Chart

This 34-year monthly chart continues to give hope that Silver could be preparing for a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…

RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15…

Fundamentally, Silver has been hurt by a slowdown in global economic growth…if economies in the euro zone, China and Japan can show some fresh strength in 2015 (and that’s a big “if”),  Silver could begin to appreciate rapidly…

Note:  John, Jon and Terry do not hold share positions in ART.