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Gold has traded between $1,381 and $1,391 so far today…as of 5:30 am Pacific, bullion is down $2 an ounce at $1,387…Silver is off 27 cents at $23.57 (John has updated charts at the bottom of today’s Morning Musings)…Copper has added 3 cents to $3.27 on positive data out of Asia…Crude Oil has retreated 30 cents a barrel to $110.23 after a major surge Friday, while the U.S. Dollar Index has slipped one-quarter of a point to 82.03…

Syria, of course, may influence Gold this week, but it’s the Fed, and the question over when and by how much it may taper that is driving bullion these days…Friday’s weaker than expected jobs data out of the U.S. was bullish for Gold and may convince the Fed to keep the pedal to the metal for a while yet…there’s also the belief in some quarters that tapering has already been baked into the Gold price, and Gold will go up no matter what the Fed decides to do at its meeting next week…

Some interesting comments over the weekend from Christine Legarde, managing director of the International Monetary Fund…she said the Fed cannot afford to ignore the risk of fallout in emerging markets from the winding down of its $85 billion-a-month bond buying program…

“Very negative spill-over effects on the emerging market economies could very much backfire on other economies. So to assume that [the] domestic economy is totally isolated, that a country is an island, would not be the right approach,” Lagarde told CNBC at a forum in northern Italy…“Without necessarily changing the mandate, without reviewing the terms of references, and maybe without even acknowledging it, I cannot believe that central bankers do not take into account what’s happening elsewhere in the world,” she added…countries with large financing needs – because they have large trade gaps or budget deficits or because they’ve borrowed heavily abroad – like India, Turkey, Indonesia, South Africa and Brazil – have all suffered big market selloffs in recent weeks due to a reversal in capital flows…when U.S. interest rates were at historic lows, a wave of cash came into these emerging markets in search of higher yields…

Holdings in the largest U.S. Gold-backed exchange traded products dropped 1.8 metric tons last week after rising in the previous 3 weeks…

Today’s Markets

Robust economic data out of both Japan and China sent Asian markets sharply higher overnight…China’s Shanghai Composite gained 73 points or 3.4% to close at 2213…the Chinese economy found its feet in August, with inflation remaining subdued as exports rose more than expected, giving a rosier outlook for the 2nd half of the year…consumer prices rose 2.6% from a year earlier, just a touch below July’s 2.7% pace, the statistics bureau said today…inflation is unlikely to pass the 3% threshold in 2013, leaving it well within the government’s comfort zone and beneath its official “upper limit” of 3.5%…the data follow trade figures released yesterday that showed a 7.2% jump in exports and a 7% rise in imports for August, beating expectations and pointing to firmer Q3 growth than had previously been expected…meanwhile, producer price inflation, which has been negative since March 2012, improved, giving some hope to Chinese manufacturers struggling with slumping margins and excess capacity…

The Nikkei average climbed 344 points or 2.4% overnight…Japan’s economy grew at a much faster pace in the 2nd quarter than initially estimated, data showed today…the country’s Cabinet Office revised the April-June GDP data, saying the economy grew 3.8% on an annualized basis on strong capital investment…that’s up from a preliminary reading of 2.6% growth released a month ago, and much higher than the 2.5% expansion in the U.S. and 1.1% growth in the euro zone during the same period…the reading marked the 3rd straight quarter of growth…

European shares are off modestly in late trading…

North America

Stock index futures in New York as of 5:30 am Pacific are pointing toward a slightly higher open on Wall Street…

Venture Exchange – Is The Bear Market Over?

Below is a very revealing 3-year weekly chart from John…you can see how the Venture went from being in an extended overbought condition in late 2010-2011 to an extended oversold condition in the spring of this year…the ADX trend indicator clearly shows the bullish trend peaking in early 2011, and the bearish trend peaking in June of this year…

RSI(14) is currently at 43% and in a nice, gradual uptrend as it finally moved out of the oversold zone…buy pressure is increasing rapidly, and a bullish +DI/-DI crossover could soon be in the works…a bearish crossover in early 2011 heralded the start of the nasty bear market that sent the Venture down 65% (2465 to the late June low of 859, important Fibonacci support)…

The critical technical challenge for the Venture in the coming weeks is to overcome resistance at 970 and also climb above the downsloping wedge which is currently around 980…a huge wave of buying could enter this market if and when the Venture crosses these important barriers…the odds of this occurring, we believe, are quite high, given the range of technical signals that are flashing positive right now…the next couple of weeks are going to be very interesting…the Venture gained 16 points last week and closed Friday at 955…

WTIC Updated Chart

The strength in Crude Oil is also encouraging for the Venture…John called this one a while back – WTIC at $115 a barrel…a confirmed breakout has occurred above a pennant, and the next chart resistance after the $110 Fib. level is $115…below is a 6-month daily WTIC chart…note the bullish “W” pattern in the RSI(14) which has plenty of room to move higher…

CRB Index Updated Chart

The CRB Index appears to have bottomed out after falling about 30% from its 2011 high…this is also very positive for the Venture…below is a 20-year monthly CRB chart which shows that a bullish reversal is taking place in commodities…

Bottom-Fishing Opportunity:  Adventure Gold Inc. (AGE, TSX-V)

First off, Adventure Gold (AGE, TSX-V) is unlike most Venture companies – it’s actually well-run, they’ve outlined a deposit (inferred resource of nearly 800,000 ounces of Gold) on 1 of their properties, and they’ve got a legitimate shot at a significant discovery elsewhere…we’re quite familiar with the Adventure Gold team which is headed up by Marco Gagnon (President and CEO) and includes geologist Jules Riopel (VP, Exploration & Acquisitions) who is very good at his craft…we spent time with both of them during a site tour of the Pascalis Property near Val d’Or 2 years ago…given the strategic location of that deposit – very close to Richmont Mines‘ (RIC, TSX) Beaufor Mine and their Camflo Mill – and the geometry of it, Pascalis has good future potential as a low-cost producer…we also like the odds of AGE being able to add tonnage at Pascalis (inferred resource is 9.13 million tonnes grading 2.63 g/t Au for 770,000 ounces)…

Meanwhile, AGE controls 100% of 600 sq. km of very prospective Abitibi geology with its Detour Quebec and Casa-Cameron projects…a total of 618 line km’s of heli-borne VTEM-type surveys, 50 line km’s of IP surveys and 265 line km’s of detailed ground magnetic surveys have been completed on both projects since the beginning of this year…this work has led to the identification of many new promising drill targets within the favorable geological environment outlined by AGE’s previous exploration work and along strike of the proven Gold-bearing deformation zones…

Keep in mind that Detour Gold Corp. (DGC, TSX) continues to explore aggressively its large landholdings as it has recognized that the Lower Detour deformation zone has many similarities with the Sunday Lake deformation zone situated 5 km to the north which hosts the Detour Lake mine…the LDDZ major structural break is mainly controlled by Adventure Gold on the Quebec side and remains largely under-explored…

Adventure Gold has been trading at a 3-year low since late June – interestingly, at a support level it landed on in 2010 just prior to when it started its run all the way to 80 cents by early 2011…when AGE starts to pick up steam, it can move in a hurry…as the saying goes, buy low and sell high…for patient investors, this appears to be an ideal time for accumulation…AGE had $2.5 million in working capital as of April 30 (its most recent financials) and has 68 million shares outstanding…insiders took a piece of a small flow-through financing ($430,000) at 42 cents at the end of last year…

Below is a 15-month weekly AGE chart from John…the stock has been basing in a horizontal channel between 13 and 17 cents for the past 10 weeks…

Updated Silver Charts

Silver has been showing strong support at $23 (the previous resistance band between $22 and $23 is now support) while a temporarily overbought condition has been unwinding…for now, Silver appears range-bound between $22 and $24.50 as it catches its breath after a nearly 20% jump in August…

6-Month Daily Silver Chart

11-Year Monthly Silver Chart

As we indicated previously, the long-term chart is following a pattern similar to that following the 2008 Crash and the 2012 low…on both occasions, RSI(2) shot up rather quickly from very oversold conditions to overbought conditions…if that pattern holds, we should see higher Silver prices in Q4…there is major resistance, however, at $26 and the down trendline as you can see on this 11-year chart…if Silver can get above that down trendline, look out…

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