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U.S. Markets Closed

As Hurricane Sandy bears down on the U.S. eastern seaboard, stock and options exchanges are closed in the United States today (possibly tomorrow as well) in the first unscheduled, market-wide shutdown since September, 2001…our prayers go out to those who will be affected which will be in the tens of millions…in economic terms, this will likely become one of the “Top 10” most costly hurricanes, perhaps even surpassing the $10-$15 billion impact that Hurricane Irene had last year…

Asian markets were quiet overnight with a slight negative bias…European shares are moderately lower today…Reuters reported this morning that Greece’s foreign lenders had refused to make any further concessions to to labor laws which had been contested by the small Democratic Left Party in the country, thus prolonging any agreement on the crucial EU/IMF austerity package…ECB policymaker Ewald Nowotny was also vocal about Greece today, saying that the European Central Bank could not participate in a public sector writedown of Greek debt as this would amount to indirect state financing…the Athens stock exchange was the biggest loser in Europe, falling by over 3%…

Trading in the precious metals markets is subdued given the U.S. market shutdown…Gold has traded in a range between $1,706 and $1,718 so far today…as of 7:50 am Pacific, bullion is unchanged at $1,711…Silver is off 22 cents at $31.87…Copper has slid a nickel to $3.48, a 7-week low…Crude Oil is 15 cents lower at $86.13 while the U.S. Dollar Index is up slightly at 80.18…

As of 7:50 am Pacific, the Venture Exchange is down 6 points to 1295 on very low volume due to the U.S. shutdown…both the TSX and the TSX Gold Index are flat…

U.S. Consumer Spending Jumps

U.S. consumer spending rose solidly in September as households stepped up purchases on automobiles and a range of other goods, but the increase came at the expense of savings…the Commerce Department said this morning that consumer spending rose 0.8%, the largest increase since February, after an unrevised 0.5% gain in August…economists polled by Reuters had expected spending, which accounts for about 70% of U.S. economic activity, to increase 0.6% in September…

Americans Feeling Better About Economy

A recent Gallup poll showed that for the first time in five years, more Americans are feeling better off financially than they did a year ago, as opposed to worse off…the shift was largely due to a decline in those feeling worse off, from around 49% of people at the beginning of the year to about 34% when the latest poll was taken late this month…the number of people feeling better off rose to 38% from 29% in January…how that could impact next week’s U.S. elections remains to be seen as the latest polls are showing a virtual dead heat…

Updated Chart – U.S. Money Supply Expansion

One of the major contributing factors to the rise in Gold prices over the last few years has been the huge jump in U.S. money supply which shows no signs of abating given the recent actions of the Federal Reserve…in the latest Weldon’s Money Monitor, Greg Weldon discusses the consequences of the Fed’s debt monetization and liquidity provisions, showing the “somewhat frightening pace” of expansion in money supply…Weldon says that over the last four years since August, 2008, the U.S. Narrow Money Supply, or M1, which is physical money such as coins, currency and deposits, has increased 73%, or more than one trillion dollars…this is about as much as it expanded in the previous 40 years…

Updated Silver Charts

As usual, John has provided his updated short-term and long-term Silver charts this morning…on the short-term chart, we can see that RSI(14) has formed a bullish “W” near a support level, somewhat similar to what occurred at the beginning of the summer…there are two support bands of note – $31.50 to $32, and $30.50 to $31…Silver could be ready now to move higher after completely unwinding its overbought condition from August and September…at the very least, we see the $30 level holding…

Silver Long-Term Chart

The long-term “Big Picture” for Silver continues to look extremely bullish…”Wave 5″ is progressing well, and RSI(2) on this 15-year monthly chart has unwound to 48%…John’s Fibonacci target of $78 an ounce (no timeline) remains intact…

Canadian Dollar Chart Update

The Canadian dollar has been on a slide since mid-September and has pulled back to par with the U.S. dollar, an important level from a technical perspective…we should start to see the loonie regain strength very soon as $1.00 is the rising 200-day moving average and the Fibonacci 61.8% retracement level…the Venture Exchange and commodity markets often go in the direction of the Canadian dollar, so “bottoming action” here by the loonie gives us a lot of encouragement regarding the broader markets for next month…not shown in John’s chart below is the Slow Stochastics indicator which is now at a level not seen since the May/early June lows…the Canadian dollar went on quite a climb from then until mid-September (96 cents to $1.035), so this recent pullback has to be viewed as a normal and healthy correction and sets the stage for the next wave up…