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Gold has traded between $1,228 and $1,239 so far today…as of 6:00 am Pacific, the yellow metal is up $2 an ounce at $1,233…Silver is unchanged at $19.95…Copper is off a penny at $3.30…Crude Oil is up 14 cents at $97.36 while the U.S. Dollar Index has climbed one-tenth of a point to 80.14…

Those who are expecting the Fed to start scaling back its bond buying program later today are likely to be disappointed, in our view, though Chairman Ben Bernanke could potentially be a little more hawkish in his tone…today’s policy statement, due at approximately 11:00 am Pacific, will be followed by what will likely be Bernanke’s final news conference as Fed Chairman about 30 minutes later…

While Bernanke will find comfort in the recent U.S. budget agreement, there are likely more reasons than not for the Fed to wait until sometime in 2014 before starting to scale back QE due to the fragility of the economic recovery…inflation is still running well below the Fed’s target level (the Fed is actually faced with the problem of too little inflation), recent improvements in the labor market are encouraging but really need to be confirmed in the months ahead, a U.S. debt ceiling battle is still looming early in the New Year which could cause some chaos on Capitol Hill, and emerging markets would prefer not to see any tapering from the Fed just yet…the performance of emerging markets is critical to a more robust U.S. economic expansion…

The outcome of today’s Fed meeting will no doubt have an impact on Gold prices and will set the tone for the U.S. Dollar Index going into 2014…technically, we prefer how Gold is behaving at the moment…the set-up for a strong finish to the year appears to be in place, especially given the high level of short positions which could leave some traders scrambling going into year-end…the Dollar Index, meanwhile, continues to look weak and vulnerable…contrary to the expectations of many, the dollar has not seen a broad-based surge even as market expectations for when Fed tapering will begin have been bought forward recently in the face of some upbeat economic data…while the dollar hit a five-year high against the yen last week, it has weakened almost 8% against the euro in the past three months…the Dollar Index is not far from where it ended last year, and a now-declining 200-day moving average (SMA) is applying downward pressure on the Index (a very strong resistance band exists between 81 and 82)…

U.S. Dollar Index – CDNX Comparative Chart

Below is a chart going back to 2004, comparing the U.S. Dollar Index (red) with the Venture Exchange (black)…there is clearly an inverse relationship between the two…key turning points have been early 2006, mid-2008, early 2009, and early 2011 with another one likely in the making…the Dollar Index has broken below a 2+ year uptrend while the Venture continues to find support at its downtrend line which it finally broke above in October…key support for the Dollar Index is at 79 – expect that support to be tested in the near future…if it’s breached, then watch Gold take off and the Venture breakout through resistance in the 970’s…a 20% Venture rally from current levels is a distinct possibility, and within that environment a select group of stocks would perform exceedingly well…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite slipped 3 points to close at 2148…Japan’s Nikkei, however, roared ahead with a gain of 309 points or 2% to finish at 15588…rumors surfaced that Prime Minister Shinzo Abe may flesh out growth strategies related to highly-anticipated structural reforms at a scheduled speech tomorrow…

European shares are up moderately in late trading overseas…

In New York, stock index futures are pointing toward a positive open on Wall Street…in economic news just in, U.S. housing starts surged to their highest level in nearly six years in November…the Commerce Department reported that housing starts jumped 22.7%, the biggest jump since January 1990, to a seasonally adjusted annual rate of 1.09 million units, the highest level since February 2008…

The Venture closed at 886 yesterday and has lost ground in 8 out of 12 sessions so far this month, shedding 49 points or 5.2%…that’s typical behavior for the first half of the month given tax-loss selling pressures during a down year…the Venture’s average gain for the month of December going back more than a decade is 5.4%, so expect a much better market over these last 8 trading days of the year…

Fission Uranium Corp. (FCU, TSX-V) Returns More Solid Results From PLS

Fission Uranium (FCU, TSX-V) released impressive assay results pre-market for three holes drilled in the R945E zone, the easternmost high-grade zone drilled at Patterson Lake South where a nearly 2-km-long mineralized trend has been outlined…hole PLS13-096 is of particular note as it returned 85.5 metres of total composite mineralization including intervals of 5.5 metres of 18.2% triuranium octoxide within 14 m of 7.9% U308 and also 3 m of 14.2% U3O8 in 40 m of 1.6% U3O8…holes PLS13-096 and PLS13-084 both returned mineralization in nearly half of the entire intervals, highlighting the broad system of mineralization in this zone…the R945E zone remains wide open in all directions…over 30 m of strike length has been tested in four holes in this area with results from the fourth hole pending…

Xmet Inc. (XME, TSX-V) Updated Chart

Is technical analysis a valuable tool in an investor’s tool box?…absolutely it is…not the only tool one needs, of course, but a valuable one nonetheless…John’s Xmet Inc. (XME, TSX-V) chart Monday showed a long-term resistance band between 15 and 17 cents and the first Fib. retracement level at 10 cents where the stock landed yesterday at the close…the Fib. “sweet spot” is between 6 and 10 cents, and keep in mind the rising 20-day moving average (SMA) is currently at 7 cents which should also provide very strong support…importantly, the overall trend is bullish, but a lot of volatility can be expected…as the saying goes, buy into weakness and sell into strength…

LX Ventures Inc. (LXV, TSX-V) Updated Chart

LX Ventures (LXV, TSX-V) , a recent social media high-flier, closed at important support at 46 cents yesterday but is prone to additional weakness based on John’s 2.5-year weekly chart below…Fib. levels aren’t price targets, they’re just theoretical levels based on Fib. and technical analysis, but what we see here is Fib. support at 30 cents which also coincides with LXV’s rising 100-day SMA…as always, perform your own due diligence…

Revolver Resources (RZ, TSX-V) Update

Revolver Resources (RZ, TSX-V) has commenced a 1,000-metre drill program at the Summit B Property near Iskut, contiguous to Colorado Resources’ (CXO, TSX-V) North ROK Property…this initial diamond drilling program is designed to test a 3-D IP inversion model that reveals a strong 2-km-long-by-500-m-wide, 35-millivolt/volt, northwest-oriented ovoid chargeability anomaly accompanied by low resistivity and magnetic signatures…that’s a mouthful, and it sounds good, but the “truth machine” will determine if it’s of any significance…RZ can earn a 60% interest in Summit B from Pistol Bay Mining (PST, TSX-V)…given the time of the year, and if the Venture does indeed go into rally mode in the near future, speculation could clearly ramp up in RZ, and even PST, over the next few weeks even though the North ROK Property is not looking as promising as it did earlier this year…below is a map of the area followed by an updated RZ chart from John…astute traders will attempt to profit just from the speculation game, and then reassess after results come out…

RZ 2.5-Year Weekly Chart

Since early November, RZ has been trading between strong support at its rising 100 and 200-day SMA’s, just above 2.5 cents, and key chart resistance at 4 cents…as always, perform your own due diligence…

Note: John, Terry and Jon do not hold share positions in FCU, XME, LXV or RZ.