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Gold is down for the third straight session but continues to show resilience in the low $1,400’s…as of 7:30 am Pacific, bullion is off $14 an ounce to $1,434…so far it has held above Friday’s intra-day low of $1,419 which is Fibonacci support…Silver is down 17 cents to $23.70…Copper is flat at $3.35…Crude Oil is $1.03 lower lower at $95.31 while the U.S. Dollar Index is relatively unchanged at 83.14…

U.S. Dollar Index Updated Chart

The U.S. Dollar Index got a major lift Friday when the Wall Street Journal reported that U.S. Federal Reserve monetary officials have come up with a strategy to wind down QE3, the Fed’s $85 billion-a-month bond-buying program…there was no timeline given, of course, and the story in our view was all about nothing as it merely reported the obvious – why wouldn’t the Fed have a series of strategies (including a stimulus exit strategy) to deal with various possible scenarios?…even a ramping up of QE3 can’t be ruled out if unemployment remains stubbornly high and inflation continues to come in below expectations…in any event, the Dollar Index is looking more bullish at the moment but that could change in a hurry given these volatile markets…the big question is whether it’ll be able to push through resistance beginning at 83.50 (the Index reacted April 4 after hitting 83.66) in the near future…the Dollar Index ceiling is from 83.50 to the July, 2012, high just above 84…if this ceiling holds firm, this will be helpful to Gold….it’s hard to imagine why the Fed would want to see a major surge in the greenback…below is a 6-month daily chart from John…

Updated Silver Charts

Silver continues to build a base with support at $22…one positive sign recently has been a decline in selling pressure as seen in this 3-year weekly chart from John…

Long-Term Silver Chart

The 11-year monthly chart shows how Silver can be expected to encounter very strong resistance at $26…the primary trend is clearly bearish…below the $22 support, as indicated in the previous chart, one can see the strong long-term support directly underneath $20 an ounce (between $17.50 and $19.50)…notice the bearish -DI/+DI crossover which breaks a long trend…

Data Reinforce Concerns Over Sluggish Chinese Recovery

A slew of economic data came out of China this morning…the upticks came in below forecasts, reinforcing the view that Chinese growth is not about to come roaring back anytime soon…industrial output rose by 9.3% year-on year-in April from 8.9% in March, but this was below forecats for a rise of 9.5%…non-rural fixed asset investment grew 20.6% for the January to April period – against expectations for a rise of 21% – after accelerating 20.9% in the January to March period…retail sales were 12.8% higher than a year ago in April, accelerating from a 12.6% increase in March…the slight rebound was thanks to accelerating growth in car sales and a rush to buy Gold near the end of April which pushed year-on-year jewellery sales in the first four months up by 72%, compared with 17.7% growth in the first three months…

Margin Debt In U.S. Nears Record High

The Wall Street Journal reported over the weekend that small investors in the U.S. are borrowing against their portfolios at a rapid clip, reaching levels of debt not seen since the financial crisis…the trend – driven by a combination of rising stock values and rock-bottom interest rates – is sparking a growing debate among market watchers…on the one hand, it shows investors’ increasing confidence in a bull market for stocks that has already lifted the Dow Jones Industrial Average 15.1% in 2013…on the other hand, increasing margin debt serves as a warning sign that markets might be getting a little too frothy…as of the end of March, the most recent data available, investors had $379.5 billion of margin debt at New York Stock Exchange member firms, according to the Big Board…that is just shy of the record $381.4 billion in margin debt set in July, 2007…in March, the level of margin debt stood 28% higher than one year earlier, a time frame that saw the S&P 500 rise 11.4%…as more investors rely on money borrowed against stocks, any significant fall in stock prices could be magnified if investors are forced to sell securities to raise cash and meet margin requirements…

Today’s Markets

Asian market were mixed overnight but Japan’s Nikkei average continued to climb higher, gaining 175 points to close at 14782…the Nikkei was helped by a weaker yen which fell to a new four-and-a-half year low against the greenback after finance officials from the G-7 gave Japan’s ultra-loose monetary policies a green light at a meeting over the weekend…China;s Shanghai Composite slipped 5 points to 2242…European shares are down slightly in late trading overseas…as of 7:30 am Pacific, the Dow is down 37 points to 15082…U.S. retail sales unexpectedly rose in April as households bought automobiles, building materials and a range of other goods, pointing to underlying strength in the economy…the Commerce Department said this morning that retail sales edged up 0.1% after a revised 0.5% decline in March…economists polled by Reuters had expected retail sales to drop 0.3% last month after a previously reported 0.4% decline in March…the TSX is 76 points lower through the first hour of trading while the Venture has slipped 4 points to 963…970 is the key level the Venture needs to overcome in order to gain fresh upside momentum…

Timmins Gold Inc. (TMM, TSX)

Readers should take a close look at Timmins Gold (TMM, TSX) which is coming off its strongest quarter ever as reported last week, though the stock is down 21% from its April high of $3.05…Timmins earned 10 cents per share in Q1 (vs. 4 cents per share in the same period last year) thanks to declining costs and record revenues of $45.9 million…the company’s San Francisco Mine (open-pit) in Sonora State, Mexico, produced a record 28,328 ounces of Gold in the first quarter and is on track to meet the company’s objective of 130,000 ounces for all of 2013…Timmins has $27 million in cash and will add significantly to its cash balance as the year progresses thanks in part to lower exploration costs – it has almost completed a major infill drilling program (nearly 200,000 metres) at the property, from which an updated technical report will be produced and released late this summer…the stock closed Friday at $2.40…below is a 2.5-year weekly chart from John…there is very strong technical support at $2.25, and this is certainly reinforced by the improving fundamentals…

iSign Media Solutions Inc. (ISD, TSX-V)

A non-resource play we continue to like is iSign Media Solutions (ISD, TSX-V)…the company is a global leader in multi-platform location-based messaging solutions that utilize Bluetooth, Mobile, WiFi and Location-Aware technologies to deliver permission-based consumer messaging in an innovative and cost effective way to engage shoppers at the point of sale…iSign is making strong inroads in the United States and is also in the process of finalizing a major financing (up to $9 million) through a 30-cent private placement…the stock closed Friday at 27.5 cents…the financing will be used for the manufacturing of the company’s smart antennas to fulfill both existing and anticipated purchase orders…the company’s revenues for the first quarter of 2013, ending January 31, nearly tripled over the same period last year…technically, the stock has been consolidating in a horizontal channel between 20 and 30 cents since November of last year…accumulation has picked up since February…note the down trend line in the 2.5-year weekly chart below…if the company continues to successfully advance its business plan, it’s just a matter of time before the share price busts through the 28 to 30-cent resistance area…

Note: John, Jon and Terry do not hold share positions in TMM or ISD.