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Gold is up $2 an ounce at $1,231 as of 7:30 pm Pacific (this is a rare evening edition of BMR Market Musings due to a site visit today – Thursday’s Market Musings will be posted in the evening as well)…Silver is relatively flat tonight at $16.81…Copper is up a nickel at $2.61 (see updated Copper chart below)…Crude Oil is 37 cents lower at $48.11 while the U.S. Dollar Index is up slightly at 92.14…

The usual Gold-Oil correlation has broken down with bullion benefiting from the potential destabilization effects of Oil prices below $50 a barrel…we have 2 updated Oil charts tonight with 1 of them showing a possible scenario for the unthinkable – $20 Oil, which we haven’t seen since 2002…

The drop in Copper is disconcerting and suggests the global economy may not be on such a stable footing…indeed, the World Bank, citing stagnation in Europe and Japan and a slowdown in China, has downgraded its forecast for global growth this year…it now predicts the world economy will expand 3% in 2015, up from 2.6% in 2014.  “The recovery has been sputtering in the euro area and Japan as legacies of the financial crisis linger…China, meanwhile, is undergoing a carefully managed slowdown,” the bank said yesterday in the first of its twice-yearly Global Economic Prospects reports for 2015…stronger growth in the U.S., aided by plunging Oil prices, is expected to help offset weakness elsewhere around the globe…

A senior leader of Al Qaeda’s Yemen branch has claimed responsibility for last week’s attacks on French weekly Charlie Hebdo in a video statement today, saying the organization financed and planned the operation…

Russia’s Economy Minister Alexei Ulyukayev said today that the chances of the beleaguered country’s credit rating being downgraded to junk were “pretty high”,  according to the Interfax news agency…

Crude Oil Update

Crude Oil rebounded in today’s session, surging nearly 6% for its biggest daily gain since June 2012 as traders with expiring options bought back futures…the price jump occurred despite data showing that U.S. Crude stocks rose much more than expected in the last week, so this is not a rally investors should have much confidence in…

Between November 1985 and March 1986, the price of Crude plunged by 67%…between June 2014 and this week, Crude prices fell by 57% and appear almost certain to head lower…after the mid-1980′s bust, it took nearly 2 decades for Oil prices to rebound to pre-bust levels and remain there…that’s not likely to happen this time, but a quick rebound like we witnessed following the financial crisis is probably not in the cards either…1 of several objectives the Saudis appear to have is to significantly curtail U.S. shale production but that’s going to take time…

Current fundamentals are being reflected in weak prices with Crude supply overshooting demand by as much as 2 million barrels a day…at some point, supply and demand will come into balance but that won’t be due to any cuts by the Saudis and their Gulf allies who are determined to maintain market share…

WTIC 2-Year Weekly Chart

At a very minimum, Crude seems destined at some point during the first half of this year to test the next long-term support around the $35 level…a rally out of current extreme oversold conditions makes sense, to be followed by new lows given the bleak fundamental picture plus the technical breakdown that has occurred over the last several months…

WTIC 19-Year Weekly Chart

The extent of oversold conditions on this 19-year monthly chart is without precedent over the last 2 decades, meaning a major seismic shift has taken place in this market…the process that could ultimately play out here could lead to $20 Oil, a level not seen since 2002…

Copper Updated Chart

Heavy selling in Asia overnight Tuesday sent Copper prices to a 5-and-a-half year low, but the metal is rebounding modestly tonight…a Hong Kong-based commodities analyst, quoted in a Wall Street Journal article, summed up Copper’s dive this way:  “What is happening with Copper is really a financial positioning play. They just look at one big asset falling, which is Crude Oil, and they get skittish about everything else.”

Global growth concerns and technical selling are also weighing on Copper…as shown in this long-term chart, RSI(14) has fallen below previous support since 2011…sell pressure is also intensifying while the ADX trend indicator is becoming more bearish…

Next major support is around $2.25, the long-term uptrend line stretching back to 2002…

CRB Index Updated Chart

Lower Oil and Copper prices are suggested by the latest bearish-looking CRB chart which doesn’t give comfort at this point that it has found a bottom yet…a test of the 2009 low around 200 appears to be in the cards…

Today, however, the CRB reversed during the trading session and closed just above the top of the support band stretching from 200 to 220…

Today’s Equity Markets

Asia

Asian markets are strong in early Thursday trading with China’s Shanghai Composite up 13 points as of 7:30 pm Pacific while Japan’s Nikkei has surged 246 points or 1.5% to climb back above the 17000 level..

The Reserve Bank of India (RBI) tonight surprised markets by cutting its key repo rate by 25 basis points to 7.75% after an unscheduled monetary policy meeting…the move comes a day after government data showed wholesale price inflation in December rising 0.11% from the year-ago period, much lower than the 0.6% rise forecast by economists, on the back of plunging Oil prices and stabilizing food costs…

Europe

European markets were down sharply today, spooked in part by the drop in Copper…

The possibility of full-scale quantitative easing by the ECB received a boost today when the top European Court backed a similar program “in principle”…the European Court of Justice (ECJ) said that the Outright Monetary Transactions (OMT) bond-buying program, commonly seen as a predecessor to QE, was compatible with treaty provisions and was in line with European Union law, as long as certain conditions are met…

North America

The Dow tumbled 187 points today, the first time in 3 months the Index has declined for 4 straight days…

U.S. sales at retailers and restaurants decreased a seasonally adjusted 0.9% in December from a month earlier, the Commerce Department reported this morning…that was below expectations and the largest monthly decline since January 2014…

The TSX fell 103 points today while the Venture dropped another 11 points to close at 660, still within the 654–680 support zone…

It was a wild ride today on no news for Doubleview Capital (DBV, TSX-V) which shot up to 16 cents in early trading before being knocked down to 8 cents on a sell order from 1 trading house late in the session…DBV finished the day at 8.5 cents on total volume (all exchanges) of 382,000 shares…the drop in the share price simply doesn’t jive with the very good looking core photos from HAT-23 posted on the DBV web site…it’s also difficult to comprehend that DBV’s very skilled technical team would drill a hole to 650 m without observing apparent strong mineralization…this really is the best-looking core DBV has encountered to date at the Hat, so we’re not spooked by today’s strange trading…

GoldQuest Mining Corp. (GQC, TSX-V) Update 

As expected, bottom-fishers got a bargain in GoldQuest Mining (GQC, TSX-V) during December when the stock traded as low as 7 cents…it was a disappointing 2014 for GQC, but the company does have exceptional geological prospects in the Dominican Republic and enough cash ($6 million in working capital as of September 30) to make another drilling discovery…historically, GQC has experienced some incredible sudden moves to the upside on impressive drill hole results in the DR…will history repeat itself in 2015?…

This year is off to a better start for GQC…the company has been granted some important additional concessions adjacent to its Romero deposit, and drilling will commence shortly…the stock closed 2014 at 9.5 cents and climbed as high as 15 cents on the 4th trading day of the year…

Technically, GQC is looking healthier now that it has broken above a sharp downtrend it has been mired in since since late June…this pullback from the recent high of 15 cents is likely a strategic entry point for those investors willing to bet on GQC regaining some of its old magic…

GQC closed at 11.5 cents today…

Columbus Gold Corp. (CGT, TSX-V) Update

A junior that has held up impressively well over the last several months is Columbus Gold Corp. (CGT, TSX-V) which continues to make progress with its Paul Inard Project in French New Guiana…yesterday, the company released results of 8 additional holes of resource development drilling for its Montagne d’Or Gold deposit, and they included a 13.3 m section grading 7.2 g/t Au within a broader interval of 46.2 m @ 2.36 g/t Au in MO-14–187…the 8 holes showed strong continuity of mineralization at the west end of the deposit with the potential to expand the resource in that direction…

More than 25,000 meters of Phase 2 drilling was completed in early November at Montagne d’Or with all expenditures financed by London-listed NordGold (the world’s 13th largest Gold producer) as part of a $30 million exploration and development program pursuant to which they can earn a 50.01% interest in the project by completing a bankable feasibility study by no later than March, 2017…the deposit is presently defined over 2,500 m x 400 m and to an average depth of 250 m from surface, so a significant open-pit operation is being targeted here…

An updated resource estimate, combined with concurrent comprehensive metallurgical tests and a preliminary environmental assessment, is on target to support the completion of a Preliminary Economic Assessment on Montagne d’Or by the spring of this year…

CGT closed at 47.5 cents today and has broken out above Fib. resistance at 45 cents and a downtrend line in place since last spring…

Note:  John and Jon both hold share positions in DBV.