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Gold is firmer this morning…as of 6:00 am Pacific, the yellow metal is up $8 an ounce at $1,653…Silver is up 12 pennies to $31.71…Copper has gained 4 cents to $3.81…Crude Oil is 35 cents higher at $105.70 while the U.S. Dollar Index has fallen one-fifth of a point to 79.42…looks like a decent day is shaping up for commodities…

The trading action in Gold yesterday was certainly interesting…over the last week, including yesterday when it briefly dropped below $1,630 an ounce, Gold has stubbornly managed to hold support at the Fibonacci $1,643 level on a closing basis…the repeated testing of this technical level will ultimately prove significant – either Gold will hold this support and resume its advance, or at some point it will break below $1,643 in search of a new bottom…the weekly and monthly Gold charts continue to paint a bullish overall picture in terms of the primary long-term trend, but the short-term outlook is indecisive…below is John’s 6-month daily chart update…note the significant drop in buying pressure since late January/early February…the RSI(14), however, has formed a “W” below the 40% level and the recent overbought condition has been cleansed…

The U.S. Mint’s sales of American Eagle Gold coins, seen as a good indicator of investor sentiment, fell in February and March to their lowest level since mid-2008, down about 70% from last year…open interest in Gold futures on Comex in New York, meanwhile, are close to a 2.5-year low while physical interest in the metal from Asia and India recently has been less than expected (Indian jewelers continue to protest a doubling of taxes on Gold imports)…Gold stocks have taken a beating this month with the TSX Gold Index off 11% (it’s down 14.6% since an intra-day high of 389 February 29) and the Venture down 8%…both the Gold Index and the Venture are at oversold levels…contrarians will look at all of these statistics and come to a bullish conclusion…when the herd is stampeding in the same direction, it’s often wise to go the other way…Gold is still up for the year and there are still so many compelling reasons why this bull market still has a long way to travel…

Rainbow Resources (RBW, TSX-V)

Rainbow Resources (RBW, TSX-V) has just released news, providing more details on its Rhea Property near Nelson which looks promising, but what caught our attention was the last part of the news pertaining to “corporate developments” and a quote from President David W. Johnston…”We are continuing to evaluate opportunities to expand our flagship Big Strike Project in the West Kootenays in addition to adding a potential second project in North America that would give us year-round drilling capability“…given that interesting statement, plus the fact the company has signaled it will have more news next week (the International Property is a stellar Silver-lead prospect, so there could be developments on that front) and will also be holding an “information session” for “market participants” next Thursday at the International Hotel in Calgary, our gut instinct is that something big is brewing with this aggressive young exploration company…we will attempt to reach President David Johnston this morning for additional comments…companies that are efficiently and effectively carrying out their business plans are the ones investors will respond to in a favorable way, even in a market like we’ve seen this month, and Rainbow fits into that selective category…

Focus Metals Inc.  (FMS, TSX-V)

Focus Metals (FMS, TSX-V) is another one of our favorite plays and bucked the fall in the CDNX yesterday with an 8-point gain on total volume (all exchanges) of just over 2 million shares…as shown recently, FMS has excellent support just below $1 (the rising 100-day SMA is at 91 cents) and the overall technical trend remains very bullish…below is a 1-year weekly FMS chart from John…

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