Gold has traded between $1,209 and $1,219 so far today…as of 7:50 am Pacific, bullion is down $4 an ounce at $1,215 (check below for an updated Gold chart)…Silver is up 6 cents at $16.61…Copper has slid a penny to $2.80…Crude Oil is off slightly at $47.78 while the U.S. Dollar Index has gained nearly half a point to 92.21…bullion’s resilience in the face of a surging greenback is impressive to say the least…
Another terrorist attack by Islamic extremists…black-clad gunmen this morning stormed the Paris offices of a satirical newspaper known for lampooning Islamic radicals, killing 12 and injuring as many as 15 before escaping. “We’ve avenged the honor of the prophet!”, the killers shouted in French, according to witnesses…
The markets potentially could be impacted in a few hours by the release of the latest Fed minutes, due at 11:00 am Pacific, which will cover the FOMC’s Dec. 16-17 meeting…at that time, the central bank said it will be “patient” in considering the timing of the first rate increase since 2006…
The U.S. Mint reported brisk Gold coin sales on Monday – 42,000 ounces, compared with 18,000 ounces in all of December…meanwhile, despite Gold‘s jump yesterday to a 3-week high, global holdings in Gold ETP’s fell yesterday to 1,597.4 metric tons, the lowest level since April 2009, according to data compiled by Bloomberg…
The latest available COT data, for the week ended Dec. 30, shows that hedge funds and money managers raised their net long positions in Gold futures and options for the first time in 3 weeks…
Oil Update
No surprise here – President Obama, oblivious to the facts, the will of Congress and the American people, NAFTA and the strategic importance of the Canada-U.S. energy relationship, is more interested in pandering to his radical environmental lobby and “building” his so-called “environmental credentials”, has threatened to veto legislation from the House and Senate approving the Keystone pipeline…
The Saudis are apparently nervous about a possible leadership transition given what’s going on in the Oil market…King Abdullah Bin Abdulaziz Al-Saud, 90 years old, was admitted to hospital on New Year’s Eve suffering from pneumonia while the country wages a battle for Oil market share and flexes its financial, military and diplomatic muscle on several fronts…
Oil market oversupply may last months or even years, but prices could recover if non-OPEC producers (our emphasis) “act rationally”, the United Arab Emirates (UAE) Oil minister said in remarks published today…what about OPEC producers acting rationally?…
Tumbling Oil prices could prove to be a boon for the many Asian economies that depend on Crude imports…combined with loose monetary policy and a gradual recovery in global demand for goods and services, falling Oil prices should help lift emerging Asia’s GDP growth this year to 4.7% from an estimated 4.3% in 2014, according to consulting firm Capital Economics…the countries that are expected to benefit the most, in order, are Korea, Thailand, Philippines, India. Taiwan, Hong Kong, China, Singapore, Indonesia and Malaysia…lower Oil prices are also helping India with its current accounts deficit, making it easier to increase Gold imports…
Canadian Dollar Chart Update
Plunging Oil prices and general weakness across the commodity sector has certainly taken its toll on the Canadian dollar as you can see below in John’s 10-year chart…a near-term rally out of oversold conditions seems likely, but the loonie probably hasn’t found a bottom just yet – nor will it until at least later in the year based on the current technicals plus some obvious fundamental factors…such a scenario is a major positive for Canadian Gold producers, along with multi-year lows in Oil prices…
The loonie has been pressured by a downtrend line in place since late 2011 on this long-term monthly chart (the bear market in the Venture started about 6 months earlier)…at the moment, a large gap has opened up between the loonie’s current value (0.844 cents U.S.) and the downtrend line…that fact, combined with RSI(14) touching support, suggests that a near-term rally is probably in the works which should give relief to battered commodities and the Venture…
Ultimately, the loonie seems destined to test 2009 support in the upper 70‘s…like we’ve witnessed previously, a new bull market in the Venture should commence around the time the loonie has bottomed…
Gold Chart Update
The key price that Gold needs to overcome in order to put the bears on the defensive is $1,240, Fib. resistance which was also the December high…
This 6-month daily chart shows Gold climbing an RSI(14) trend line – as long as that continues, the possibility of a near-term breakout is very real…if and when that trend line is breached, bullion would come under pressure and at the very least we would likely see another test of $1,180 support…
A +DI/-DI bullish crossover is in its early stages – we’ll see if this is able to intensify in the coming days…
Today’s minor pullback is normal and healthy – the weekly close will be critical, especially with Friday’s jobs report…
Today’s Equity Markets
Asia
China’s Shanghai Composite jumped another 23 points overnight to close at 3374, while Japan’s Nikkei was relatively unchanged at 16886…
China has dropped decade-old quotas limiting exports of strategically important minerals that sparked a global trade dispute and led some countries to reduce their reliance on Chinese supplies…in 2010, China pushed global rare-earth prices sharply higher – in some cases 10-fold – when it slashed its export quota on the 17 elements by 40% from the preceding year…China has said it was an effort to clean up a highly polluting domestic rare-earth mining industry…the U.S., European Union and Japan in 2012 complained that China was using the quota system to push up global rare-earth prices in violation of WTO rules…since then, the world has reduced its reliance on the minerals from China, which until recent years produced about 93% of the world’s rare earths…that figure is believed to have dropped to around 86% as other producers have ramped up supply…
Europe
European markets are up significantly in late trading overseas following weak CPI data…consumer prices in the euro zone fell on an annual basis in December for the first time since the depths of the financial crisis more than 5 years ago, increasing pressure on the European Central Bank to step up its stimulus program as early as this month (the ECB meets Jan. 22, 3 days before general elections in Greece)…the EU’s statistics agency today said consumer prices last month were 0.2% below their December 2013 levels…that was the first year-over-year fall since October 2009 which marked the last in a sequence of 5 months of deflation…
North America
The Dow is rebounding after a negative start to the first full trading week of the New Year…as of 7:50 am Pacific, the Dow is up 127 points…private employers added 241,000 jobs to their payrolls in December, surpassing projections of a 226,000 gain, according to the ADP National Employment report released this morning…the figures come 2 days before the Labor Department’s non-farm payrolls report…economists surveyed by Reuters are looking for employment growth of 240,000 last month and a jobless rate of 5.7%…
The TSX is up 82 points as of 7:45 am Pacific while the Venture is flat at 686…Radius Gold (RDU, TSX-V) was halted 10 minutes before the open this morning, pending news…
Updated Venture Chart
John’s 9-month Venture chart posted Monday showed how the Index had closed last Friday right up against resistance at the downtrend line from September on the 9-month daily chart…that’s a key level (707) the Index must push above in order to build fresh momentum and keep the recovery from the December 637 low intact…
Below is 2-month daily chart…while the uptrend line from mid-December has been broken, Fib. support exists between 664 and 680 while the 20-day moving average (SMA) is beginning to flatten out at 675…
It would be a bearish development for the Venture if it were to fall below support in the 660‘s…
AuRico Gold Inc. (AUQ, TSX) Update
Since a clear technical “buy” signal recently, as outlined in our New Year’s Day chart, AuRico Gold (AUQ, TSX) shot up 80 cents or 21% over the first 3 trading days of the year…this morning, AUQ is pulling back modestly in sympathy with Gold stocks in general…as of 7:50 am Pacific, it’s off 4 cents at $4.61…
The intensity of the move in AUQ is at least partly attributable to enthusiasm over the company’s recently announced discovery at Kemess East in north central British Columbia…this is an area that we’re convinced is going to heat up significantly over the first half of 2015…
Given that discovery, we believe the odds of AUQ eventually staging a major breakout above a long-term downtrend line have increased substantially…this is definitely a situation to keep on one’s radar screen…
Paramount Gold & Silver Corp. (PZG, TSX, NYSE) Update
Paramount Gold & Silver (PZG, TSX, NYSE) was the subject of a BMR eAlert December 1 and has jumped 48% since then, thanks to the anticipated developments concerning Paramount and Coeur Mining Inc. (CDE, NYSE) with CDE‘s proposed buy-out out of PZG in an all-share swap…PZG is now moving in lockstep with CDE, and yesterday also reported highly encouraging results from the Dana vein at San Miguel…that vein is strategically located between the high-grade Don Ese deposit and Coeur’s Guadalupe mine just 800 m to the west…
Below is a 3-year weekly PZG chart based on its U.S. listing…PZG has finally broken above a long-term downtrend line, suggesting a test of Fib. resistance at $1.32 (U.S.) is in the works…
Note: John, Jon and Terry do not hold share positions in the above-mentioned companies.
