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Gold is steady this morning…as of 6:10 am Pacific, the yellow metal is up $3 an ounce at $1,644…Silver has gained 4 cents to $31.80…Copper is off a nickel to $3.74…Crude Oil is down 21 cents to $102.25 while the U.S. Dollar Index is slightly weaker at 79.75…

Jewelers in India, the world’s biggest bullion buyer, have suspended a nationwide strike after the government assured them it would consider their concerns regarding a tax on non-branded Gold ornaments…the 21-day strike ended after jewelers met with Finance Minister Pranab Mukherjee who had proposed a 1% tax on non-branded jewelry for the first time and a doubling of import duties on Gold bars, coins and platinum in his March 16 budget speech…

The fact that Gold has found strong support around $1,600 is very bullish and also keeps the inverted head-and-shoulders pattern completely intact…current resistance levels are $1,643, $1,672 and $1,725 as shown below in John’s 6-month updated daily chart…Gold should start finding some traction very soon…

Chinese Economic Data

China returned to an export-led trade surplus in March, heralding the prospect that the global economy may be passing its low point in the current cycle and lifting overseas orders just in time to compensate for a slowdown in domestic demand…the trade surplus of $5.35 billion last month (exports increased 8.9% from the same month last year while imports rose 5.3%) confounded expectations of a $1.3 billion deficit as exports grew faster than expected and import growth eased from a 13-month peak, customs data showed this morning…the data reinforced the view of most analysts that China’s trade-sensitive economy is set for a soft landing, with GDP growth likely to have eased for a fifth successive quarter to 8.3% in the first three months of 2012 and remaining on course for its slowest year of expansion in a decade…exports to the United States –  the single country with the biggest trading relationship with China – were a particular high point, up 10.4% from a year ago…those to the 27 members of the European Union – the biggest overall market for Chinese goods – were down 3.1% from March last year…China’s overall export performance was still a lot weaker than it was in 2011 when exports grew 20.3% for the whole year…attention now turns to China’s GDP growth data for the first quarter which is due to be released Friday…it’s expected to exceed 8% but fall short of the 2011 fourth quarter growth rate of 8.9%…

Venture Exchange – Where’s The Bottom?

Gold stocks across the board have been hit hard since the end of February with the TSX Gold Index down a whopping 20% while the Venture Exchange has fallen 247 points or 15% over the last 28 sessions from its 2012 high of 1696 February 29…Gold itself is off only about 8% from its yearly high, so the extent of the weakness in the Venture and the Gold Index is puzzling – especially at a time when central banks are pouring so much liquidity into the global financial system…

We remain convinced that the pessimists have it wrong, that Gold and Gold stocks will indeed shine in 2012…the Venture could be following a similar pattern to that which occurred in 2005…the market roared higher in January and February, corrected 20% beginning in early March, and then went on a tear the rest of the year with a 40% gain from the spring low…

Gold stocks are in heavily oversold conditions, an environment not unlike what was witnessed in the 2008 panic…with regard to the Venture, this sell-off has nearly exhausted itself in our view with RSI(2) – a very reliable indicator – at a low extreme as shown in John’s 3-year weekly chart…

The sell-off in Gold equities has created unusual opportunities across the sector in our view, so this is precisely the time to be going against the crowd…Richmont Mines (RIC, TSX) is a classic example of a deeply oversold situation – its 2.5-year weekly chart is typical of many of its peers’ charts at the moment…

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

On the Venture, RJK Explorations (RJX.A) has held up well during this weakness and remains supported by its rising 50-day moving average (SMA) at 19.5 cents…it closed yesterday at 20 cents…other bright spots are Rainbow Resources (RBW, TSX-V), Focus Metals (FMS, TSX-V) and Argex Mining (RGX, TSX-V)…Cap-Ex Ventures (CEV, TSX-V) seems to have found support at its rising 200-day SMA in the mid-70’s…it closed yesterday at 77 cents…Spanish Mountain (SPA, TSX-V) has strong technical support in the 40’s and appears to be in recovery mode…Greencastle Resources (VGN, TSX-V) is trading at cash value at 11.5 cents and that’s always a steal, especially now that it’s Jewel Ridge Gold Property is in play through Rainbow…