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Gold has been bouncing around this morning but moved decidedly lower after better than expected U.S. employment numbers…Gold moved as high as $1,625 following news of another interest rate cut in China…the yellow metal then retreated slightly after the ECB decision, then moved lower after the ADP private sector report showed renewed strength in the U.S. jobs market…U.S. weekly jobless claims then came in lower than expected (the biggest decline since April) as reported by the Labor Department…as of 6:15 am Pacific, Gold is down $12 an ounce at $1,604 but has stabilized after falling as low as $1,596…Silver has fallen 61 cents to $27.68…Copper is off 2 cents at $3.48…Crude Oil is 32 cents lower at $87.34 while the U.S. Dollar Index has surged two-thirds of a point to 82.85…

China Puts The Pedal To The Metal

China is moving aggressively to kick-start economic growth, and that has to be considered bullish for the commodity sector as well as stocks…the People’s Bank of China cut its benchmark lending and deposit rates this morning, its second rate cut in less than a month…the Chinese central bank lowered its one-year yuan deposit rate 25 basis points and its one-year lending rate by 31 basis points…it also announced more relaxed rules on lending, allowing bank lending rates to fall to 70% of the benchmark rate, down from 80% currently…

The central bank cut interest rates in China for the first time in three years June 8, just days before Beijing released data showing a continued decline in growth indicators…the government is set to publicly release a raft of data next week, including GDP figures for the second quarter…

China’s economy probably slowed further in the second quarter to grow 7.6% (the median forecast of a survey of 21 analysts), its worst performance since the 2008/09 financial crisis, as investment, factory output and retail sales weakened across the board…but analysts are hopeful the world’s second-largest economy would have seen the worst between April and June, and that growth would pick up in the third quarter as Beijing further loosens monetary policy and fast-forwards infrastructure spending…

The Shanghai Composite Index fell 26 points overnight (prior to the interest rate cut) to 2021, leaving it just above its early January low…steelmakers and coal miners led declines on the Shanghai amid weakening demand and falling prices…indicative of the concerns about slowing growth in the world’s second-largest economy, shares in Sany Heavy Industrry extended losses for a fourth day as the company, China’s biggest machinery maker by sales, cut jobs – something almost unheard of over the last decade…

ECB Cuts Rates

The European Central Bank has cut its main interest rate to an historic low, responding to increasing gloom over the prospects for the euro zone economy with a move that also offers relief to the region’s struggling banks…in a decision widely anticipated by financial markets, the ECB today reduced its main policy rate by a quarter of a percentage point to 0.75%, the first time it has pushed the rate under 1%…the ECB also cut the interest rate on its deposit facility to zero, marking a dramatic step in attempts by the central bank to reduce general market interest rates and stimulate inter-bank lending…however, the ECB is not prepared at this point to re-start its bond-buying program which has been dormant for four months now…

Bank Of England Launches New Round Of QE

The Bank of England launched a third round of monetary stimulus today, announcing it would restart its printing presses and buy 50 billion pounds ($78 billion) of asset purchases with newly created money to help the economy out of recession…the move was widely expected after BoE Governor Mervyn King said last month the economic outlook had deteriorated since the BoE called a halt to its second round of asset purchases (QE) in May…the BoE has bought 325 billion pounds of government bonds to date, and the purchases announced today take this total to 375 billion…

Central Banks Doing The Heavy Lifting

Across the world, national factory and service sector surveys released over the past several days have been disappointing…and with many developed country governments reluctant to worsen budget positions by taking fiscal measures to boost activity, it is central banks that are doing the heavy lifting…

The stimulus measures from China and Europe will likely increase the anticipation in the market that the U.S. Federal Reserve may also introduce further supportive measures when it concludes its next monetary policy meeting at the start of August…

Today’s Markets

Asian markets were mixed overnight…European shares are generally slightly lower this morning while Dow futures as of 6:15 am Pacific are pointing toward a 45-point opening loss…

It’s an important day for the Venture Exchange from a technical standpoint as John’s chart that we posted last night points out…he’s looking for technical confirmation that the move over the last four days (7.6% off last Thursday’s intra-day low of 1154) can be sustained, so a higher close today would be an encouraging sign…

One of the “bellwether” Venture stocks is ATAC Resources (ATC, TSX-V) which has been crawling along the bottom in recent months, though it did make a nice move off its May 16 low of $1.90 to an early June high of $3.50…ATC, which is in the midst of completing a $12 million financing, closed yesterday at $2.78 and is looking generally healthy from a technical standpoint…John updates the chart below…

John has two additional charts this morning – Focus Graphite (FMS, TSX-V) and Great Panther Silver (GPR, TSX)…

Focus Graphite (FMS, TSX-V)

Great Panther Silver (GPR, TSX)

If and when Silver is about to break out, this is a stock that should give us an advance warning…

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