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Gold has firmed up after touching an overnight low of $1,359…as of 7:30 am Pacific, bullion is up $11 an ounce at $1,378, $4 above its 100-day moving average (SMA)…it climbed as high as $1,383 over the last hour…Silver has added 37 cents to $23.26…Copper has advanced 3 pennies to $3.31 on positive economic data out of China…Crude Oil has gained 34 cents to $104.19 while the U.S. Dollar Index has is up one-fifth of a point to 81.59…

JPMorgan and Bank of America (BOA) have turned quite bullish on Gold….BOA is predicting a 4th quarter average of $1,495, while JPMorgan anticipates rising averages in every quarter through the end of next year, according to analyst estimates compiled by Bloomberg…

Sales of jewelry, coins and bars will reach as much as 1,000 metric tons in India and China in 2013, valued at a combined $87.6 billion, according to the World Gold Council…“Specifically the demand for jewelry was the highest 2nd quarter since 2007,” said David Lamb, Managing Director, Jewelery at the World Gold Council. “This was driven by the powerhouse markets of India and China, jointly representing 50% of world demand.”

Commenting on the Chinese numbers, Lamb added,  “Despite recent price adjustments, this Gold demand trend data reinforces just how the Chinese belief that holding Gold as a store of value has become even more entrenched.”

Investors have sold 23.2 tons from Gold-backed ETPs since the start of August, set for the smallest outflow since January, according to data compiled by Bloomberg…that takes this year’s drop to 683.6 tons, close to the 700 tons that Barclays Plc expects to be sold in 2013…the bank predicts no change in ETP holdings in 2014…

Demand for jewelry, coins and ingots contrasts with record sales from ETPs, which at the peak in December held 2,632.5 tons, more than the official reserves held by all but 3 central banks…the funds now own 1,948.3 tons valued at $85.8 billion, $55.9 billion less than at the end of December…there has obviously been a big and important shift in Gold holdings from West to East this year…

Factory Output Improves in China & Euro Zone

The global economy showed signs of improvement today with factory output improving in 2 of the world’s largest economies…In China, HSBC’s preliminary reading of PMI data crossed the key 50-level, which signals expansion, for the first time in 4 months…meanwhile, business activity in the euro zone rose at the fastest pace in August for more than 2 years, a survey showed this morning, a sign that economic recovery in the 17 nations that use the common currency is picking up steam…data firm Markit said a preliminary gauge of activity based on a survey of purchasing managers in the currency union rose to 51.7 in August from 50.5 in July – its highest reading for 26 months…a reading of more than 50 indicates activity is expanding…

Today’s Markets

Dow Aims To End 6-Session Skid

After 6 straight losing sessions, the Dow is in positive territory (up 44 points) through the first hour of trading today…RSI(2) on the daily chart, after yesterday’s close, hit a low extreme not seen since last December…minutes of the Fed’s July 30-31 policy meeting, released late during yesterday’s trading session, suggested officials were on track to start winding down the $85 billion-a-month bond-buying program, possibly as early as next month, if the economy strengthens…they were, however, a bit more uncertain than in June about whether economic growth would pick up as they had forecast and about the gains they were seeing in the job market…

The latest jobless claims report, issued this morning, showed a rise in initial claims to 336,000, a bit higher than the 330,000 economists were looking for…July leading indicators rose 0.6%, slightly higher than the 0.5% increase expected…meanwhile, financial data firm Markit said its “flash” U.S. manufacturing PMI rose to 53.9, its best showing since March…

The average American household is earning less than when the Great Recession ended four years ago, according to a report released this morning…U.S. median household income, once adjusted for inflation, has fallen 4.4% in that time, according to the report from Sentier Research…the report is based on an analysis of Census Bureau data…

TSX, Venture

The TSX has jumped 116 points as of 7:30 am Pacific while the Venture is 5 points higher at 930…the Venture is underpinned by strong technical support between 918 and 924…the rising 30-day SMA provided rock-solid support at this month’s low of 906, and that SMA is currently at 921…the biggest immediate technical challenge for the Index is to climb above its still-declining 100-day SMA in the mid-930’s…despite 3 straight losing sessions to begin the week, the outlook going into September still has to be considered very bullish in our view – and a number of individual stocks are reflecting this…we expect a reversal to the upside by next week in the 50-day SMA which has flattened out after being in decline since November of last year…

Pershimco Resources Inc. (PRO, TSX-V) is among the strong performers on the Venture this morning, up 3 cents to 40 cents after reporting impressive drill results (including 77 metres grading 1.77% Cu and 2.03 g/t Au) from its Idaida target in Panama (in the immediate vicinity of its La Pava and Quema deposits) where it has confirmed a new Copper-Gold system…

Asian markets were relatively quiet overnight…Japan’s Nikkei average fell 59 points while the Shanghai Composite slipped 6 points to 2067…European shares were up significantly today…

Fission Uranium (FCU, TSX-V) and Alpha Minerals (AMW, TSX-V) Report More Results From PLS

Fission Uranium (FCU, TSX-V) and Alpha Minerals (AMW, TSX-V) reported drill results from 5 more holes this morning from the Patterson Lake South (PLS) discovery in Saskatchewan…PLS13-078, PLS13-081, PLS13-083, PLS13-085 and PLS13-086 all intersected relatively wide zones of mineralization of varying degrees of radioactivity in the R390E Zone, the strike length of which has doubled to 120 metres since the winter 2013 program…PLS13-086 returned a 47-metre wide mineralized zone including a total of 5.27 metres composite “off scale”…a $7 million, 44-hole, 11,000 metre drill program and ground geophysics surveys continues at PLS…

Technically, Fission tested important “gap” support yesterday – John suggested this would likely occur and indeed it did, as FCU reached an intra-day low of $1.23 yesterday before closing at $1.30…below is an updated 4-month daily chart…note the next Fib. level ($1.84)…this is not a price target but a theoretical level based on Fibonacci analysis…FCU is up 6 cents at $1.36 through the first hour of trading…

Macro Enterprises Inc. (MCR, TSX-V) Updated Chart

Macro Enterprises Inc. (MCR, TSX-V) has climbed more than 75% since we first called our readers attention to this situation 3 months ago…it’s certainly unusual for a Venture company to report strong revenue and earnings growth, but that’s exactly what Macro has been doing for the past year…the company specializes in construction and maintenance of small to mid-inch pipelines, facilities and gathering systems…operations are centered in Fort St. John, B.C., with a satellite office located in Hinton, Alberta…Macro maintains one of the most modern fleets of heavy equipment in the industry…yesterday, the stock jumped 63 cents to close at $5.13 (it hit a new all-time high of $5.35) after the company reported Q2 net income of $5.71 million (21 cents per share) vs. $2.6 million or 11 cents per share during the same period last year…for the first 6 months of fiscal 2013, MCR has earned 61 cents per share…the company says it expects revenues in the 3rd quarter to be above that recorded in the 3rd quarter last year ($35 million) after taking into account the expected additional revenues resulting from a November 2012 acquisition…Macro continues to actively bid new jobs and look for new opportunities, and says it’s encouraged by the prospect of significant pipeline infrastructure projects in British Columbia and Alberta over the short and medium-term…

Below is an updated MCR chart…keep in mind that technically “overbought” conditions don’t last forever – corrections at some point always occur, and it’s never a mistake to take some profits off the table…note John’s $5.61 Fib. level…MCR is 29 cents higher at $5.42 as of 7:30 am Pacific…

Mirasol Resources Ltd. (MRZ, TSX-V)

A company worthy of our readers’ due diligence is Mirasol Resources Ltd. (MRZ, TSX-V) which smartly sold its 49% interest in the Joaquin Silver-Gold Project in Argentina late last year for $60 million ($30 million in cash and the balance in stock in Coeur d’Alene Mines Corp. (CDE, NYSE)…with a strong treasury, MRZ is now focused on Chile…what we also like about this company is the transparency of its financial statements…Mirasol is a great example for the rest of the industry in terms of how it reports its expenses…

Technically, there has been a strong correlation between MRZ and the Venture Index…the stock was as high as $8 in early 2011 before falling to a multi-year low of $1.04 on June 27-28, a time that may later be viewed as the bottom of the Venture’s 2+ year bear cycle…below is a 2.5-year weekly MRZ chart that shows a double bottom and a strong reversal pattern…seeing this kind of increasing bullishness in MRZ adds credence to the view that a significant Venture move to the upside is on the way…MRZ closed yesterday at $1.41…it has 44 million shares outstanding…

GoldQuest Mining Inc. (GQC, TSX-V) Updated Chart

Investors were disappointed with results from GoldQuest Mining (GQC, TSX-V) yesterday as the company missed on its 1st 5 holes drilled along the promising Guama trend, immediately west of the Romero discovery…the targets tested at Guama, however, were not the core targets for that area – the holes were drilled into the peripheral parts of the trend, albeit into some strong anomalies…the targets of the highest interest at Guama are located within the Los Comios concession, which is currently under reapplication…the trend is defined by strong chargeability anomalies coincident with outcropping Copper veins (up to 34% Cu)…GoldQuest expects the Los Comios concession to be granted shortly, at which point those targets will be tested…momentum traders are exiting GQC and moving into other situations, and that always creates opportunities…

Technnically, GQC has 2 important support levels – 35 cents, which it closed at yesterday (this is also the 1,000 day moving average), and 25 cents as shown in John’s 1.5-year weekly chart below…we see a good chance of a much stronger 4th quarter for GQC as an initial Romero resource estimate will be announced along with an updated resource for La Escandalosa…it’s possible those systems could be linked…in addition, the company should be in a position to drill the best targets at Guama, so we view any additional weakness as an opportunity – especially if oversold conditions emerge, and they likely will…the company has a strong treasury and can easily survive without a financing until at least 2015…GQC is unchanged at 35 cents after 60 minutes of trading today…

Note: John, Jon and Terry do not hold positions in FCU, MCR, MRZ or GQC…