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Gold has traded between $1,459 and $1,478 so far today after yesterday’s jump of more than $20 an ounce…as of 7:10 am Pacific, bullion is off $9 an ounce at $1,466…Silver is down 6 cents at $23.89…Copper is off a penny at $3.32…Crude Oil is 53 cents lower at $96.09 while the U.S. Dollar Index is up one-third of a point at 82.21…

SPDR Gold Trust, the world’s Gold-backed ETF, says its holdings fell 0.60% to 1,051.47 tonnes yesterday from 1,057.79 tonnes Tuesday…physical buying is keeping Gold from falling below the $1,440 level which it touched 2 days ago…Hong Kong continues to report a shortage in the supply of Gold bars which has kept premiums at multi-month highs there…

Roulston:  “Profit Opportunities Enormous”

Some comments from Lawrence Roulston in an interview with The Gold Report:  “Let me put the current valuations into perspective: I’ve never seen anything like this in the over 30 years I’ve been in the business…the valuations are irrational…companies are trading at discounts to cash, some at one-third of the value of cash in the bank…there are companies with multi-million ounce Gold deposits trading at just slightly over the value of cash in the bank and, in some cases, even less than the value of cash in the bank…you could buy cash at a discount and get a Gold deposit or a Copper deposit thrown in for free…the profit potential is enormous for anybody who has cash and is coming into the market now”…

Roulston on the Gold price: “There will be a lot of short-term volatility…but people’s desire to own Gold on the physical level is not going away, whether people are buying Gold jewelry in China or India or Europe or buying bars and coins – Gold will act as a safe haven, as a currency hedge…there will probably be further events such as what recently happened…I don’t want to get into the whole conspiracy theory, but it seems clear that the brokerage firms involved in this had a phenomenal short position before making the calls to short Gold…it was extremely profitable for them…if they’ve done it once, they’re likely to do it again”…

“Quebec Proposes Law Top Make Mining Firms Accountable To Local Community”

That’s a headline in this morning’s Globe and Mail which reports that the Quebec government is preparing to table a mining act that will require companies to be “socially and environmentally accountable” to the local communities they operate in while being closely monitored to ensure the rules will be followed…good grief – we can’t wait to see what the separatists and socialists in Quebec are about to unveil now in another attempt to expand the role of government in the economy and pander to the growing number of radical environmentalists in that province whose real agenda is not to work with the mining and exploration companies, but to be a stumbling block and erode their presence…“There needs to be a balance between economic development and environmental protection”, Quebec Coalition Party Leader Francois Legault recently stated…we’ll be exploring in more detail in the coming weeks what investors need to know about the changes in attitude and approach to mining and exploration in Quebec…

Barrick & DR Government Nearing Agreement Over Pueblo Viejo Mine

A recent spat between Barrick Gold Corp. (ABX, TSX) and the government in the Dominican Republic appears to be thawing…Barrick says it’s nearing a firm agreement with DR authorities over its Pueblo Viejo mine and that an “agreement in principle” has been ironed out that would see the government receive higher revenue from the project through various changes to a lease agreement…Barrick says the changes would result in an even split of cash flows from the mine divided between the corporation that operates the mine and the government from 2013 to 2016…according to Barrick, the government would receive tax revenues of about $2.2 billion over the period, and would provide an additional $1.5 billion to the DR government over the life of the Pueblo Viejo mine…the deal would also apparently include an extension of the window for Barrick to recover its capital investment…

U.S. Jobless Claims Hit 5.5-Year Low

The number of Americans filing new claims for unemployment benefits dropped to its lowest level in nearly 5.5 years ears last week, signaling labor market resilience in the face of fiscal austerity…initial claims for state unemployment benefits fell 4,000 to a seasonally adjusted 323,000, the lowest level since January, 2008, the Labor Department said this morning…the third straight weekly decline in claims pushed them further below the 350,000 mark, which economists normally associate with a firming labor market…

Chinese Core Inflation Still Subdued, Producer Prices Fall Deeper Into Deflationary Territory

China’s consumer price index rose 2.4% year-on-year in April, rebounding from a temporary dip to 2.1% in March…the rise was fueled by a jump in the cost of food, especially vegetables, after an unusually cold start to the spring, the national statistics bureau stated today…however, core inflation, stripping out volatile food prices, continues to be subdued…non-food elements in China’s consumer price index increased just 1.6% year-on-year in April, lower than their average rise in the first quarter…more tellingly, producer prices fell deeper into deflationary territory in April, a reflection of lower global commodity prices as well as unused factory capacity…the producer price index fell 2.6% year-on year in April, a six-month low…“China’s short-term economic growth momentum seems weaker than expected, reducing the risk of sharp price rebound and [helping] lower inflation expectations”, Lu Ting, an economist with Bank of America Merrill Lynch, wrote in a note to clients as reported by the Financial Times this morning…

Today’s Markets

Asian stocks were mostly modestly lower overnight with Japan’s Nikkei average falling 94 points to 14191 while China’s Shanghai Composite lost 13 points to 2233…European shares are mixed…In the U.K., the Bank of England’s Monetary Policy Committee (MPC)  announced it was keeping its interest rate unchanged at the historic low of 0.5% and will not add to its current quantitative easing program, holding its fire until the arrival July 1 of Bank of Canada Governor Mark Carney…the Dow is essentially unchanged as of 7:15 am Pacific…the TSX is off a a few points at 12580 while the Venture is 2 points higher at 971…a close above 970 would be bullish as we’ve been stating…the fact that Gold is down this morning but the Venture is holding its own (trending higher in early trading) is a very positive sign…we’ll see what happens today and tomorrow…volume on the Venture, though, continues to languish…

Which Way For Gold – Venture, TSX Gold Index May Provide Clues

Despite Gold’s weakness this morning, there is some evidence that Gold may soon break out of its trading range between $1,440 and the $1,480’s to the upside…below are a couple of charts from John that show that fresh strength is starting to appear in Gold stocks…the next few trading days will be critical…what we’re also watching for is the possibility of a breakout by the Venture above resistance at 970…the 960 level is important support – it needs to hold…

Below is a 6-month daily chart comparing the TSX Gold Index with the price of Gold and the Venture…there are obvious signs that Gold stocks are gaining some momentum after the setbacks of February, March and April…conditions appear to be ideal for a strong rally, but this view will require additional support which could come over the next 2-3 trading days…

The Gold Index In Reverse – Assessing The HGD

What also gives us hope regarding Gold stocks in the near future is that cracks are starting to appear in the HGD, the double-reverse S&P/TSX Global Gold Bear ETF which has been such a powerful performer in recent months…in our chart below, you can see how it became heavily overbought recently…the strong bullish trend for the moment is clearly in decline, and what’s also interesting is the imminent threat of the 20-day moving average (SMA) reversing to the downside in the coming days – that would certainly be a bearish development for the short-term at least…John has indicated the Fib. support levels for the HGD – $18.52, $16.51 and $14.51, implying a drop of anywhere between 8% and 28% from current levels which would equate to a jump in the TSX Gold Index to between approximately 210 to 230…

Graphite One Resources Chart Update (GPH, TSX-V)

Graphite One Resources (GPH, TSX-V) has made a nice move recently, behaving as expected based on John’s technical analysis…yesterday, it hit a new 52-week high of 26.5 cents and closed up 3 pennies at 25 cents where there is resistance…continued strong volume will be required to push this through a quarter in the coming days…it’s unchanged through the first 40 minutes this morning on impressive early volume (all exchanges) of more than 400,000 shares…

Note: John, Jon and Jon do not hold share positions in GPH.