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Gold traded as high as $1,330 overnight and touched a low of $1,305 during the last hour…as of 7:10 am Pacific, bullion is down $9 an ounce at $1,313…Silver is off 9 cents at $21.55…Copper is off a nickel at $3.22…Crude Oil is 98 cents lower at $102.62 while the U.S. Dollar Index is up nearly one-tenth of a point at 80.52…

Holdings in Gold-backed ETP’s fell 0.7 metric tons yesterday to 1,932.4 tons, the lowest since May 2010, data compiled by Bloomberg shows…meanwhile, it has been another soft month for the sale of American Eagle Gold coins…the U.S. Mint has sold 12,000 ounces of these coins so far this month, slightly exceeding the August total of 11,500 ounces – the lowest in at least 6 years, according to the U.S. Mint’s web site…

Federal Reserve Bank of Atlanta president Dennis Lockhart, considered a centrist whose views tend to represent the Fed’s consensus, said yesterday the U.S. economy is still facing significant ambiguity and suggested there isn’t enough time between now and the October 29-30 meeting to gather the necessary economic data to justify a cut in the Fed’s bond-buying program…“In the short time between now and the October meeting, I don’t think there will be an accumulation of enough evidence to dramatically change the picture” of an economy defined by “ambiguous” economic data and facing government budget showdowns in coming weeks, Lockhart said in an interview with The Wall Street Journal. “I don’t have expectations that the fog will clear dramatically between now and October.” 

It’s strange that the markets reacted the way they did Friday on somewhat hawkish comments from the Fed’s James Bullard, yet barely budged yesterday on Lockhart’s remarks…in addition, New York Fed President William Dudley said the central bank still needs to push hard against threats to the U.S. economic recovery, and fiscal uncertainties in particular “loom very large right now”…Dudley defended the Fed’s decision last week not to trim its aggressive bond-buying…most analysts were expecting the fed to begin scaling back QE3 at its meeting last week…24 of 41 economists surveyed by Bloomberg last Wednesday and Thursday said the Fed will take the first step in slowing its bond buying in December, but the reality is the Fed is in a difficult trap it may not be able to escape from until sometime in 2014…

“Geoscience For Discovery” Begins Tomorrow At Whistler

While the very popular Denver Gold Forum is underway, a less known but equally important 3-day event hosted by the Society of Economic Geologists kicks off tomorrow at Whistler…at least 800 leading scientists and industry thinkers from 35 countries will be gathering to share new developments in leading edge mineral deposit science and discovery…with ever-sincreasing demand for metals and minerals, new and innovative science is essential to uncovering future mineral deposit discoveries – especially since so many of the “easy” deposits around the world have already been found and mined…among the many speakers, Richard Sillitoe, a world-renowned consultant from the U.K., will examine the quirks of the regional distribution of mines and mineral deposits around the northern Pacific Rim, while Claire Chamberlain of Teck Resources Ltd. (TCK, TSX) will discuss the latest findings on the study of British Columbia’s Gold-encirhced porphyry Copper deposits…

Fission Uranium Inc. (FCU, TSX-V)

More excellent results yesterday from the Patterson Lake South uranium discovery, and Fission Uranium Inc. (FCU, TSX-V) closed up 2 pennies at $1.25…Fission, of course, is swallowing JV partner Alpha Minerals Inc. (AMW, TSX-V), and ultimately what makes sense is that a big fish will come along and swallow Fission – and at significantly higher prices that yesterday’s $1.25 close for FCU…the stock is up a nickel through the first 40 minutes of trading day…

John’s 6-month daily chart shows how Fission consistently finds support at its 50-day moving average (SMA)…Fibonacci resistance is at $1.47 but we see little problem in that being overcome at some point during Q4…this is a first-rate discovery play and exactly the kind of high quality Venture situation that can offer very significant potential leverage for investors…

Aldrin Resource Corp, (ALN, TSX-V)

On the subject of the Saskatchewan uranium play, Aldrin Resource Corp. (ALN, TSX-V) has been a strong performer in recent months, though it has backed off recently which is actually a good thing as that provides opportunity…Aldrin has been busy lining up drill targets for its Triple M Property 10 kilometres southwest of and on trend with the Patterson Lake discovery, with drilling expected to commence in January…interestingly, the company has also attracted former NHL star Bryan Trottier to its Advisory Board, and Trottier is expected to be instrumental in assisting Aldrin in building relationships in local communities…Trottier stated in an ALN news release last week, “I am very pleased to be working with Aldrin.  Over the past 35 years, I have visited over 200 first nations communities in Canada, conducting hockey clinics and delivering the message for the first nations children to continue their education and pursue their dreams of making healthy choices. My ancestral background is from the Cree Metis Chippewa heritage and the inspiration of making it from a small Saskatchewan community to New York and the National Hockey League hopefully leaves a lasting memory and encourages others to excel at whatever they choose to pursue.”

The ALN chart continues to look strong, despite the recent pullback from a 17-cent high…the stock closed yesterday at 13 cents, half a penny below its rising 100-day SMA and 1.5 cents above its rising 50-day SMA…RSI(14) is bouncing off solid support…

Sheslay Valley Discovery Opportunity

While we’re hopeful Colorado Resources (CXO, TSX-V) can prove John Kaiser wrong and deliver more than just “mediocrity” with some upcoming drill results, the area that could really light up very soon is the Sheslay River Valley which we have been writing about since June…it’s more prospective in our view than North ROK…initial drill results from Prosper Gold (PGX, TSX-V) are expected during the 1st half of October, and we’re surprised Kaiser and others haven’t picked up on Prosper’s 22 drill core photos posted on its web site last Wednesday…PGX announced, in conjunction with the release of those photos, that each hole drilled so far at the Sheslay has intersected mineralization from the top of the hole to the bottom with the deepest hole going 598 metres – far deeper than any previous drilling on this property…grade of course will be key…what the drill core photos show, however, are multi-generations of veins…veins that are also multi-directional, as an independent and highly experienced geologist discussed with us yesterday…this is evidence of a robust hydrothermal system, and that’s of course essential to any significant Copper-Gold porphyry deposit…the core being shown by Prosper is what one would expect to see from a Copper-Gold porphyry deposit…multiple mineralizing events appear to have occurred at the Sheslay, and of course it’s already known that the adjoining Grizzly Property (Garibaldi Resources, GGI, TSX-V) has shown similar geological and geophysical signatures as the Sheslay…we have a major report coming up on the Sheslay River Valley later this week, so stay tuned…

Today’s Markets

China’s Shanghai Composite slipped 14 points overnight to close at 2208…Japan’s Nikkei average, meanwhile, was essentially unchanged at 14733…European shares are up modestly in late trading overseas…

In New York, the Dow is off 35 points through the first 40 minutes of trading…an index of consumer confidence, released at 7:00 am Pacific, came in at 79.7 in September…economists polled by Reuters were expecting this figure to rise to 78 in September from 76.8…the last 2 U.S. government shutdowns were not particularly negative for stocks and they were short – 5 days in November, 1995 and 21 days in January, 1996…could it be different this time around with the intensity of the debate over the debt ceiling?…only time will tell, but politicians like to kick the can down the road…what’s likely to emerge in our view is some sort of a compromise that funds the government until December, then Congress will have 2+ months to try and sort things out…

The TSX is down 7 points while the Venture is flat at 945 as of 7:10 am Pacific…

Medallion Resources Ltd. (MDL, TSX-V)

For investors interested in rare earth plays, we suggest checking out Medallion Resources (MDL, TSX-V) which has performed extremely well since the spring, climbing from a 52-week low of 10 cents to a high of 43 cents the last couple of trading sessions…the 50-day SMA, currently at 36 cents, has provided exceptional support since the beginning of June when volume started picking up in this stock…below is a 1.5-year weekly chart from John…

Note: John and Jon both hold share positions in GGI.  Jon also holds a share position in PGX.

Gold has traded between $1,316 and $1,333 so far today…as of 7:30 am Pacific, bullion is unchanged at $1,326…Friday’s significant drop was unsettling for some investors as Gold failed to hold above its 20, 50 and 100-day moving averages (SMA’s) despite the Fed’s decision last Wednesday not to scale back its bond-buying program at this point in time…a 4-year monthly chart from John (see below) puts the current situation into perspective, however…Silver fell as low as $21.40 overnight but is currently up 6 cents at $21.86 (John has updated charts at the bottom of this morning’s report)…Copper is down 2 pennies to $3.26…Crude Oil has fallen $1.57 a barrel to $103.19 while the U.S. Dollar Index is up one-tenth of a point at 80.49…

Bloomberg reported this morning that Gold output in Ghana, Africa’s largest producer after South Africa, may fall as much as 18% this year after declining prices prompted some mines to cut production, according to the state-run Minerals Commission….

Gold Long-Term Chart

John’s 4-year monthly chart provides additional evidence that Gold hit an important low of $1,179 in late June, marking the end of a 3-wave corrective phase…what we’ve seen this month is a normal Fibonacci retracement of the $255 move between late June and last month’s high of $1,434…important Fib. retracement levels to watch closely are between $1,283 and $1,309…Gold is finding strong support within that range, and those levels really need to hold…short-term resistance is in the mid-$1,360’s followed by $1,400…expect Gold to continue to trade between these support and resistance levels until an event “tips the scale” and (Gold bulls hope) pushes prices through the important $1,400 barrier…of course some analysts believe we haven’t seen the bottom yet in Gold, but the Venture Exchange – a reliable leading indicator of bullion prices – isn’t trading in a way that would suggest Gold prices are about to collapse again…in fact, the Venture’s resilience in the face of weakness in Gold this month is highly encouraging and suggests bullion in fact could be gearing up for a strong finish to the year…keep in mind, as well, that the U.S. Dollar Index is showing weakness – it has broken below a 2.5-year uptrend on the weekly chart, a significant technical development that lends support to the bullish case for both the Venture and Gold…

Today’s Markets

China’s Shanghai Composite surged 29 points or 1.3% overnight to close at 2221 following better-than-expected economic data…China’s economy is showing fresh signs of vigor as an initial gauge of manufacturing activity (HSBC’s flash PMI of small and medium-sized firms) hit a 6-month high of 51.2 in September, thanks to strong domestic and foreign demand…the improved reading reinforced expectations that the economy is continuing to gain strength after its weak first half and that the 2nd quarter was the bottom for the year…“Strong new orders suggests that this recovery has some legs, so it probably will continue at least into year-end if not beyond.  I would stay tuned for more upside surprises on growth for China,” said Frederic Neumann, managing director and co-head of Asian economics research at HSBC…

European shares were down modestly today…German Chancellor Angela Merkel and her Christian Democratic bloc scored a convincing election victory over the weekend, but Merkel’s party nonetheless fell just short of an absolute majority and will need a left-leaning coalition partner to govern Europe’s biggest economy…

Business activity in the euro zone continues to pick up as new orders flood in at their fastest pace in more than 2 years, surveys showed today…the region’s economic recovery is becoming more broadly based…

North America

The Dow is down 35 points through the first hour of trading today…the forward P/E ratio for the S&P, which is up 20% so far this year, is now at its highest (14.94) since early 2010, and that has some analysts concerned – especially considering that the expected profit growth for 2013 (6%) is far below the sizzling 31% achieved in 2010 when company earnings were improving rapidly as business activity rebounded from the depths of the recession…for the 3rd time in as many years, the U.S. government is caught up in a budget impasse that could force a government shutdown (which might not be such a bad thing)…Congress faces an October 1 deadline – the current fiscal year ends on September 30 – to pass a budget or shut down the government…assuming a budget is passed, the nation’s debt ceiling must also be raised or the Treasury will hit the borrowing limit sometime in October…somehow they’ll manage to sort things out (the circus act will be entertaining as usual) but the federal debt will continue to pile up…

The TSX is off 3 points while the Venture is up 3 points as of 7:30 am Pacific…Fission Uranium Corp. (FCU, TSX-V) and Alpha Minerals Inc. (AMW, TSX-V) announced this morning the discovery of a 5th zone of high grade uranium mineralization with off-scale radioactivity at Patterson Lake South…the breadth of near-surface mineralization – 76 metres – and the location of this zone (halfway between R390E and R780) – are both important…“This narrowing of the distance between zones is continued proof that PLS is host to a mineralized system of considerable size and strength,” stated FCU President and CEO Ross McElroy…

North American Nickel Inc. (NAN, TSX-V)

We’re continuing to keep a close eye on North American Nickel Inc. (NAN, TSX-V) which pushed through important resistance last week at 30 cents…the company has intersected significant nickel sulphide mineralization in several holes at its 100%-owned Maniitsoq Nickel-Copper-Cobalt and PGM Project in southwest Greenland, and assays are pending…the key for NAN, of course, will not only be high grades, which it appears they have, but tonnage potential – that’s what investors will be gauging…NAN is up 1.5 cents at 43.5 cents through the first hour of trading today…below is a 2.5-year weekly chart…the next Fib. level shows as 51 cents…

Canada Carbon Inc. (CCB, TSX-V)

Canada Carbon (CCB, TSX-V) enjoyed a strong week last week, climbing 25%, as the company reported continued exploration progress from trenching and drilling at its Miller hydrothermal lump/vein graphite project in Quebec…technically, 36 cents is an important resistance level as shown on John’s 3-year weekly chart…RSI(14) is in overbought territory at 81%, so an unwinding of that condition can be expected at some point – the big question, of course, is when…the project, however, appears to have merit and is being advanced, so investor interest in CCB should remain high in the coming weeks and months…as always, perform your own due diligence and be prepared for volatility in this play, as in others…CCB has gained a penny-and-a-half to 36.5 cents through the first hour of trading today…

Colorado Resources Ltd. (CXO, TSX-V) Updated Chart

Colorado has been beaten up since its last drill results came out at the end of August, but drilling at North ROK of course continues…keep in mind that this Copper-Gold porphyry system still looks productive based on results from 13 holes released to date…this is still early in the game, and the possibility of another stellar hole is very real as geologists get a better handle on the geometry of North ROK…this stock has shown a lot of volatility in recent months with astute traders buying into weakness and selling into strength…CXO appears to be building a solid base near current levels where there’s long-term technical support as shown on John’s 3-year monthly chart…will CXO give investors an October surprise that they will cheer?…anything is possible, and it would certainly be good for the Venture if CXO can get back on track by repeating numbers they first reported at the end of April…as of 7:30 am Pacific, CXO is off half a penny at 43.5 cents…

Updated Silver Charts

6-Month Daily Chart

11-Year Monthly Chart

Note: John and Terry do not hold share positions in FCU, AMW, CCB, NAN or CXO.  Jon holds share positions in NAN and CXO.

TSX Venture Exchange and Gold

The Venture posted a modest 4-point gain last week, closing at 946.  Though the Index slipped 7 points Friday (its worst day of the week but also its lowest volume session of the week), it held up well considering the 185-point plunge in the Dow and a $39 drop in the price of Gold.  The Venture has essentially shrugged off several sharp down days in Gold this month, a very encouraging sign, and continues to find strong support at its EMA(20) as shown in this 3-month daily chart from John.

The Venture’s rising 50-day moving average (SMA) has now crossed above the 100-day SMA, a typically bullish technical event that has occurred on only five occasions since the 2008 Crash.  The next few weeks, however, will be critical to see if this modest bullish trend can hold and gain momentum.  The Index is trading in a tight range, underpinned by solid support but also restrained by a strong resistance band between 955 and 970.  The slow but gradual recovery since the late June low of 859 has been encouraging.  One or more catalysts, such as an important  new discovery or a sharp rise in Gold prices, will be necessary to push the Index through resistance which would attract a wave of fresh buying.  We remain optimistic – we do like the odds of a breakout, but exact timing of that is anyone’s guess.

The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks

There’s no better cure for low prices than low prices.  The great benefit of the collapse in Gold prices this year is that it forced producers to learn to become much more lean and mean in terms of their cost structures.  Among many others, Barrick Gold (ABX, TSX), the world’s largest producer, said it may sell, close or curb output at 12 mines from Peru to Papua New Guinea where costs are higher.  Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their operating structures.  Exploration budgets among both producers and juniors have also been cut sharply.  In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists.  Ultimately, all these factors are going to create a supply problem – think about it, where are the next major Gold deposits going to come from? On top of that, a recent Mineweb study shows grades have indeed fallen significantly just over the past decade.  For instance, grades in the South African Gold sector fell from an average of 4.3 grams per metric ton in 2002 to an average of 2.8 grams per metric ton in 2011.  It doesn’t take a rocket scientist to figure out that the next huge bull market in Gold stocks is just around the corner due to demand-supply dynamics, much leaner producers who will suddenly become earnings machines, and a junior market that will be healthier simply because a lot of the “lifestyle” companies sucking money out of investors will simply disappear or get taken over by individuals or groups who are actually competent and serious about building shareholder value.   A healthy “cleansing” in the market has been taking place.  As this continues, more and more seeds are being planted for an incredible future move in well-managed Gold producers and explorers that could make the dotcom bubble look like a tea party.  As for the juniors, focus on the small universe of companies that have the ability to execute both on the ground and in the market – companies that have the cash, the expertise, the properties and the drive to make discoveries that majors will buy.

Gold

Gold took investors on a wild roller coaster ride last week, courtesy of the Federal Reserve.  The Fed surprised most pundits Wednesday by not electing to scale back its bond-buying program, and bullion took off from $1,300 into the $1,370’s. Much of that jump was likely due to short-covering.  On Friday, Gold gave up a lot of its gains due to comments from Fed official James Bullard who said the decision not to taper was a “close one” and that the Fed could decide to begin scaling back as soon as its next meeting in October (we doubt it).  Consistent messaging from the Fed is certainly not one of its strengths.

While most analysts and economists got the call wrong on the Fed’s decision to keep its bond purchases intact at $85 billion a month, Bank of America Merrill Lynch called it correctly all along as CNBC’s Jeff Cox pointed out in an interesting article Thursday.  The firm had been saying for months that economic improvements would not be sufficient to budge the Fed from its historically easy monetary policy, making a September taper unlikely and a December move more probable.  “We believe tightening is unlikely to happen until higher bond yields, bank stocks, housing activity and corporate ‘animal spirits’ all signal in unison that policy has traction,” Michael Hartnett, BofAML’s chief investment strategist, said in a note to clients.  The firm remains bullish on stocks.

Looking at the “Big Picture” with regard to Gold, what we see from a technical point of view (below is a 4-year monthly chart) is an important reversal this summer – a “3-wave” corrective phase that ended when Gold touched $1,179 in late June.  At the same time, of course, the Venture hit a low of 859 while the TSX Gold Index plunged to a level (154) not seen since the height of the 2008 panic which presented the opportunity of a lifetime for investors.

Gold 3-Month Daily Chart

Gold has shown strong support at the $1,307 Fib. level which could certainly be tested again this coming week ($1,277 is another important Feb. support level).  However, we remain encouraged by the fact that the Venture – a reliable leading indicator of Gold prices – is actually up slightly this month while bullion has fallen 4.9% from $1,397 at the end of August.  We doubt the Venture would be showing the resilience it is if Gold were about to collapse again as some pundits are predicting (many of the same pundits also insisted the Fed would start “tapering” this month).  Keep in mind also that the Gold price has correlated extremely well with the U.S. debt ceiling over the last few years.  The debt ceiling will need to be increased again during Q4.

Gold finished a volatile week very close to where it closed the previous Friday – down $2 an ounce at $1,326.

Silver fell $1.29 an ounce Friday to finish at $21.80, a loss of 47 cents for the week (John will have updated Silver charts tomorrow as usual).  Copper enjoyed a strong week, climbing a dime to $3.28.  Crude Oil slipped $3.46 a barrel to $104.75 while the U.S. Dollar Index plunged nearly 2 points to 80.43 (it has broken a 2.5-year uptrend which has to be considered bullish for both Gold and the Venture).

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, has had a huge impact on bullion.  Despite this year’s drop, the fundamental long-term case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates, a Fed balance sheet now in excess of $3 trillion and expanding at $85 billion a month, money supply growth around the globe, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand (especially from China), emerging market growth, geopolitical unrest and conflicts…the list goes on.  However, deflation is prevailing over inflation in the world economy and this had a lot to do with Gold’s plunge during the spring below the technically and psychologically important $1,500 level, along with the strong performance of equities which drew money away from bullion.  June’s low of $1,180 may have been the bottom for bullion – time will tell.  We do, however, expect new all-time highs as the decade progresses.  There are many reasons to believe that Gold’s long-term bull market is still intact despite this major correction from the 2011 all-time high of just above $1,900 an ounce.

Welcome to our site, or at least the initial version of it!  BMR has been online for 4 years and strictly through word-of-mouth we have built a loyal following. 

We’re continuing with our plans to ultimately construct a very unique investment and money-management resource site that goes considerably beyond what we have now.  We focus a great deal on the Gold, Silver and Copper markets as well as trends in the global economy, in addition of course to the technical health of the TSX Venture Exchange (CDNX).  An important component of this site, as well, will always be original research on high quality junior exploration companies or small producers that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity, and we are being more selective than ever in the current market environment.  We look for companies with the ability to execute both on the ground and in the market, who are determined to build shareholder value, which actually excludes most Venture stocks.  However, investors must understand that the companies we do put forward for our readers’ due diligence are still highly speculative situations and entail considerable risk, volatility and unpredictability.

Our intent is to provide you with information that you can use as part of your own due diligence.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. Always perform your own due diligence and please read our disclaimer at the bottom.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it –  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perspective (His money that we have been given stewardship of), He will bless you.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

Gold has traded between $1,346 and $1,368 so far today…as of 6:45 am Pacific, bullion is down $13 an ounce at $1,352 but is nonetheless headed for a strong weekly performance thanks to Wednesday’s sharp turnaround following the Federal Reserve’s decision to keep its printing presses running 24/7, at least for now…in an interview this morning with Bloomberg, St. Louis Fed President James Bullard, who traditionally has been known as a Fed hawk, said the central bank could begin to scale back its bond buying program as early as next month…“This was a close decision here in September,” Bullard told Bloomberg, emphasizing the role that economic data has played and will continue to play in Fed decisions…Bullard is scheduled to speak on monetary policy to the New York Association for Business Economics at about 10:00 am Pacific today…

The Fed won’t start to scale back its QE program this year – at least that’s the view of former George W. Bush economic advisor Lawrence Lindsey…“It’s going to take a long, long time for them [the Fed] to hit their goals. I think we’re going to be in a QE-type of situation for a while,” he said on CNBC’s “Squawk Box” this morning…

John will have a couple of important Gold charts this weekend as part of our Week In Review And A Look Ahead...Gold may soon get another shot-in-the-arm as Congress gets ready to wrangle over the debt ceiling which inevitably will have to increased…Silver is off 51 cents at $22.59…Copper is off a penny at $3.29 (see new chart below)…Crude Oil is down 72 cents at $105.67 while the U.S. Dollar Index is up slightly at 80.46 but fell below an important long-term trendline this week…

Holdings in Gold-backed ETP’s fell 2.1 metric tons yesterday to 1,935.1 tons, the lowest since May 2010, according to data compiled by Bloomberg…

The prestigious Denver Gold Forum begins this Sunday…

Interesting article in this morning’s Financial Times…former UK regulator Lord Turner told Swedish economists last week, and repeated to central bankers and economists in London this week, the real story behind the recent dramatic financial sagas – the dance around QE or the crisis at Lehman Brothers five years ago – is that western economies have become hooked on ever-expanding levels of debt…until this situation changes (how likely is that, anytime soon?), it is delusional to think that anyone has really “fixed” western finance with post-Lehman reforms, or created truly healthy growth, Lord Turner insists…put another way – although he did not say so bluntly –  1 way to interpret this week’s dance around QE is that policymakers are continuing to prop up a financial system that is (at best) peculiar and (at worst) unstable…in our view, this can only be bullish for Gold…

This is probably a good sign for continued strength in Gold prices during the 4th quarter – Societe Generale continues to view Gold’s fundamentals as “bearish”…“The Fed taper delay doesn’t change the fact that most of the Gold fundamentals are, in our view, bearish.  The Fed taper delay has at most weakened the bearish case somewhat but not to an extent that it is likely to prevent the Gold price from trending lower,” they stated in a research note released yesterday.  “We forecast the Gold price to average $1,225 during (the fourth quarter of 2013) and to drop down to about $1,100 during 2014. We recommend investors to use the recent Gold rally as a selling opportunity.”

What’s Copper Saying These Days?

Copper appears to be forming a bullish inverted head-and-shoulders bottom…buy pressure has emerged for the 1st time this year, and a bullish +DI/-DI crossover appears to be in the works for the 1st time since late last year…in otherwords, Copper is looking strong – at least healthy enough to rally further from current levels in the weeks ahead which would be another bullish factor for the Venture Exchange…

Below is a 13-month weekly Copper chart from John…the inverted “head and shoulders” target is $3.80 which is about a 15% move from current levels…that kind of move would surprise most analysts…

India Raises Rates, Tries To Tame Inflation

India’s new central bank governor marked his first policy meeting today with a bold decision to hike interest rates, catching analysts off-guard and leading to sharp falls on the Indian stock market…the central bank hiked the key interest rate by 25 basis points, citing the threat of rising inflation…higher food costs pushed wholesale price inflation to 6.1% in August, while consumer price inflation remains close to 10%…Asia’s third-largest economy grew at only 4.4% in the last quarter, its lowest rate in more than 3 years…

Quebec Government “Demonstrates An Unfortunate Lack Of Understanding” Of How The Mining Industry Works

In a presentation to Quebec’s Parliamentary Committee on Bill 43 of the Mining Act, Mineweb’s Dorothy Koish reported this morning that the Quebec Mining Exploration Association warned that in its current firm, the measure “will eventually reduce the ability of the Quebec mining industry to develop resource, create jobs and generate wealth for all Quebecers.”

Quebec Mining Exploration Association (QMEA) President Philippe Cloutier told the committee, “It is clear to us that the government demonstrates an unfortunate lack of understanding of how our industry and our business models work, as well as the challenges we face. The bill ignores the reality of mineral resource development in Quebec and seems to uphold a fictional vision of our practice on the ground.”

Fortunately, the political life of the current dysfunctional, socialist/separatist provincial government in Quebec is in serious jeopardy…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite climbed 6 points to close at 2192…European shares are slightly lower in late trading overseas…meanwhile, the Dow is off 2 points through the first 15 minutes of trading…the TSX is flat while the Venture is up 2 points at 955 as of 6:45 am Pacific…the Venture continues a bullish pattern of holding up well whenever Gold is under pressure as it is today…

North American Nickel Inc. (NAN, TSX-V)

Focus on the small percentage of Venture companies who have the working capital, the expertise, the properties and the drive to succeed both on the ground and in the market, and can make discoveries that majors can buy…North American Nickel Inc. (NAN, TSX-V) fits into that category as interest continues to build in the company’s early-stage discovery in Greenland which it’s now referring to as the Imiak Hill Conduit Complex (IHCC)…it’s located in the northern part of the company’s 100%-owned Maniitsoq Nickel-Copper-Cobalt and PGM project in southwest Greenland…NAN has enjoyed a solid week and speculators could drive it up further based on John’s updated 2.5-year weekly chart…buy pressure is clearly increasing…as always, perform your own due diligence…NAN is unchanged at 42 cents in early trading…

True Gold Receives Environmental Permit For Karma Project

True Gold Mining Inc. (TGM, TSX) has received an environmental permit from the Burkina Faso Ministry of Environment and Sustainable Development for development of the Goulagou I, Goulagou II and Rambo deposits at the company’s flagship Karma Gold project…the receipt of final environmental approval advances the company’s application for an exploitation permit for the deposits…mining (exploitation) permits are the next and final approvals required before development and production can begin, and they are typically granted approximately 2 months after receipt of environmental permits…TGM is up half a penny at 33.5 cents on light volume as of 6:45 am Pacific…

Probe Mines Ltd. (PRB, TSX-V) Updated Chart

Probe Mines (PRB, TSX-V) remains 1 of our favorite exploration stories as the company continues to build on its deposit at Borden Lake in northern Ontario with aggressive drilling in the high-grade southeast section of the property…Probe’s priority continues to be to delineate and define this high-grade zone in order to incorporate those results into updated reports…Borden Lake has been re-classified by the company as a more traditional high-grade, Archean lode Gold system, amenable to underground recovery, which is also bounded by significant ancillary lower-grade mineralization, the latter ideally suited to potential open-pit mining techniques…Probe has been a superb market performer in recent months, hitting a new high for the year recently despite Gold’s significant drop in 2013…below is a 2.5-year weekly chart from John…note the updated Fib. level (not a price target, just a theoretical level based on Fib. analysis)…Agnico Eagle Mines Ltd. (AEM, TSX) took a slice of Probe in the spring, and we wouldn’t be surprised to see them buy Probe out completely by sometime next year…PRB is unchanged at $2.21 after 15 minutes of trading…

Fission Uranium Inc. (FCU, TSX-V) Updated Chart

As we’ve previously noted, Fission has had a habit of testing its rising 100-day moving average (SMA) on any pullbacks, and then quickly resumes its upward climb…this happened again this month…below is an updated chart…superb uranium discovery at PLS that ultimately should draw the interest of a major…as of 6:45 am Pacific, FCU is unchanged at $1.24…

Great Panther Silver Ltd. (GPR, TSX) Updated Chart

Great Panther Silver (GPR, TSX) has excellent support around the $1 level, just slightly below its rising 50-day SMA, so any minor pullback from current levels makes this an attractive trading opportunity at least, if you’re bullish on Silver prices for at least the short-term…GPR is off a penny at $1.07 as of 6:45 am Pacific…

Note: John, Jon and Terry do not hold share positions in NAN, PRB, FCU or GPR.

Patience prevails and will continue to prevail – happy days are on the way again…Gold exploded to the upside yesterday as the Fed surprised most pundits by deciding NOT to taper…yesterday’s news and market activity was further confirmation to us (we’ve been making this argument for a while now) that the Gold market correction (nearly 40% from the September 2011 high) and the Venture bear market both ended in late June, so prepare for a potential Venture breakout in the very near future…patience is important…again, it’s also critical to be selective as a rising tide will not lift all boats on the Venture…continue to focus on the companies with the working capital, the expertise, the properties and the drive to succeed both on the ground and in the market – companies that can make discoveries that majors will buy…those will be ones who will be doing the “heavy lifting” on the Venture through the balance of the year…

As of 7:30 am Pacific, Gold is flat at $1,365 and catching its breath after shooting up from just below $1,300 yesterday…bullion reversed after correcting about half its gains from the move between late June and the recent high of $1,434…Silver is now safely above important support at $22, up 16 cents at $23.13…Copper has jumped 7 cents to $3.30…Crude Oil is off 34 cents at $107.73 while the U.S. Dollar Index, after getting smashed yesterday, is relatively unchanged at 80.24…

The Fed sent some clear signals yesterday – there is no question they want to see inflation ramp up, and they also want to see a much more robust labor market which means that a string of 200,000+ monthly job growth numbers is likely necessary before they actually begin to taper…this is commodity bullish…they are also concerned about poor fiscal policy in Washington and how it’s preventing the American economy from realizing its full potential…the Fed’s stance is also bringing back talk of a currency war, and there are clearly major technical developments in the U.S. Dollar Index (John has a chart this morning) which are bullish for Gold. the Venture Exchange and commodities in general…

Gold Updated Chart

First, let’s take a look at Gold…the recent pullback was very normal from a technical perspective – a Fibonacci 50% retracement of the gain between the late June low of $1,180 and the late August high of $1,434…there are 2 key levels to watch in the coming days on a closing basis – $1,366 and $1,400…bears will need to run and hide if and when bullion closes above $1,400, and we believe the odds of that happening soon are very good…on John’s 3-month chart, RSI(14) is now showing up momentum at 52%, and it looks like a bullish +Di/-DI crossover is in the works…

U.S. Dollar Index Plunges: 2.5-Year Uptrend Broken

Gold and the Venture perform best when the greenback is in a downtrend…as we pointed out a few days ago, the Dollar Index broke below a 2.5-year uptrend…a test of strong support at 79 is in the cards, but the broken trendline support now becomes very stiff resistance – especially given the fundamentals and the fact it’s likely going to be a while yet before the Fed begins to taper…

Today’s Markets

Asian markets were stronger overnight, thanks to the news from the Fed, as Japan’s Nikkei average climbed 261 points to close at 14766…China’s Shanghai Composite added 6 points to finish at 2192…

European shares are up significantly in late trading overseas…

North America

The Dow is off slightly through the first hour of trading after posting its 5th triple-digit gain yesterday in the past 8 sessions…the TSX is up 2 points at 12933 as of 7:30 am Pacific, while the Venture has added 3 points and is now at 956…North American Nickel Inc. (NAN, TSX-V) continues to look strong, given its discovery in Greenland which looks impressive with assays of course still pending…NAN is up another 3 pennies at 39 cents…

An important breakout is forming (through 12900, requires confirmation) on the TSX as John shows in this 6-month daily chart…

Venture Updated Chart

The impeccable support of the Venture’s EMA(20) has been impressive to say the least…the Venture has also been giving us very bullish clues this month by holding up so well in the face of a 10% drop in the price of Gold – a clear departure from the trading patterns we’ve seen over the last 2+ years…more than ever, we believe that what’s shaping up on the Venture is a major breakout through resistance around the 970 level…such an event could bring in a wave of fresh buying…below is a 3-month daily chart from John…notice how RSI(14) found strong support, and the Index continued its pattern of reversing quickly to the upside after briefly falling below its EMA(20)…

Prosper Gold (PGX, TSX-V) Drilling Intersects Mineralization At Deepest Levels Ever at Sheslay, Nearly 2 Dozen Drill Core Photos Released

Clues That Garibaldi Resources (GGI, TSX-V) Is Next With News

We don’t know the grades or widths yet – those answers are expected during the 1st half of next month – but early indications are that a discovery of importance has indeed been made or is in the process of unfolding at Prosper Gold Corp.’s (PGX, TSX-V) Sheslay Valley Cu-Au Porphyry Project in northwest British Columbia, approximately 60 miles west of Iskut…BMR has an independent geological consultant reviewing these photos and the technical information released yesterday by PGX, and we’ll have much more next week in a comprehensive special report we are preparing on the Sheslay River Valley (Prosper Gold and Garibaldi Resources – GGI, TSX-V)…

Dirk Tempelman-Kluit, who made the multi-million ounce Gold discovery at Blackwater, is one of the top geologists in the country and his expertise was very much on display yesterday in PGX’s news release given its level of detail…be patient if you’re already a PGX shareholder, and expect this important story to start to gain market traction by next week as more investors become aware of it, and speculation begins to ramp up in advance of assay results…

PGX’s goal during this 1st phase of drilling at Sheslay is to test continuity of mineralization at depth…quoting directly from the news release, all holes drilled to date have “intersected Cu-Au mineralization from surface to the bottom of the holes…highly altered, strongly veined and pervasively mineralized medium-grained hornblende monzonite and andesite.”

The emphasis (bold lettering, underlining) is ours – those are key words…no less than 22 drill core photos were released by PGX yesterday, showing impressive alteration and obvious signs of mineralization, and we don’t believe Prosper Gold would be releasing these if they weren’t confident about upcoming results…

PGX is currently drilling the 6th hole…the deepest hole drilled to date is 598 metres…previously, the deepest hole ever drilled at the Sheslay (Star target, formerly Dick Creep) was 335 metres…the average length of Firesteel Resources‘ (FTR, TSX-V) 2 dozen or so holes was only 174 metres…PGX wouldn’t be drilling to 600 metres unless they were “in the right stuff”…keep in mind, the game-changing moment for Red Chris came when drilling started to exceed 400 metres – Imperial Metals (III, TSX) delivered a whopper of a hole that went more than 1,000 metres deep and graded better than 1% Cu with strong Gold values as well…

From surface to depth, Prosper Gold is hitting the same host rocks seen at Red Chris, Galore Creek and Schaft Creek, 3 large Cu-Au porphyry deposits in the Stikine Arch…they stated Red Chris first – whether that was meant to send a message or not, who knows…

Heli-Borne Magnetic & Radiometric Survey Completed

Prosper Gold also announced that a 133 sq. km detailed helicopter-borne magnetic and radiometric survey has been completed at the Sheslay…“Its aims are to expand understanding of the property geology, to refine drill targeting on the 5 known Copper-Gold porphyry targets and to identify possible new targets…the survey covers the entire 6,829-hectare claim area and adjacent ground.”

Does “adjacent ground” mean Garibaldi’s Grizzly Property as well?…Garibaldi posted pictures of the Grizzly on its web site for the 1st time yesterday, another message that things are developing on their front and (we’re speculating) news from them must be imminent…at the moment we’re assuming the beginning of next week…we can’t imagine they would put news out on a Friday, especially if the news is good…

Below is a long-term GGI chart (10-year monthly) that shows a very strong bullish pattern…the recent pullback to 9 cents was a normal Fib. retracement (also tested support at the rising 300-day SMA) that cleansed temporarily overbought conditions as well…this chart tell us GGI has major upside potential in the coming weeks – and its chart pattern is very similar to that observed in Canada Carbon Inc. (CCB, TSX-V) as we mentioned yesterday…GGI’s strong working capital position, along with its promising district-scale projects in Mexico and the emerging excitement at the Grizzly, all combine to give this play strong upside potential in the coming days and weeks…

Note: John and Jon both hold share positions in GGI.  Jon also holds a share position in PGX.

Gold has traded between $1,294 and $1,309 so far today, just hours before the Federal Reserve’s much anticipated policy statement (11:00 am Pacific) and a follow-up news conference (11:30 am Pacific) by Ben Bernanke…most pundits expect the Fed to begin to scale back its monthly bond buying program by at least $10 a billion, a move that has been well-telegraphed by the Fed going back to its meeting in May…as a result, investors have already driven up the yield on the 10-year Treasury bond about 1.2 percentage points beyond its level in late May when Bernanke first suggested that the Fed could slow its purchases by year’s end…as of 7:00 am Pacific, bullion is down $8 an ounce at $1,302 as it continues to languish prior to the Fed’s decision…in addition, reports overnight said India has raised its import tax on Gold jewelry to 15% from 10%…Silver is off 18 cents at $21.55…Copper is up 4 pennies at $3.23…Crude Oil is 46 cents higher at $105.88 while the U.S. Dollar Index is flat at 81.16…

Keep an eye on Gold’s Fibonacci support levels – $1,307 and $1,277 – on a closing basis today…as we’ve been stating, Gold may very well go up no matter what the Fed decides as tapering has already been factored into the bullion market…the real upside for Gold is if the Fed decides not to taper just yet, or begins to scale back by only $5 billion to $10 billion and wraps that decision in very dovish language and perhaps also changes its unemployment and inflation thresholds…keep in mind, the U.S. economy has sent very mixed signals in recent months and job growth is still far from robust…so the Fed will surely proceed cautiously…unemployment has fallen to 7.3%, but that’s in large part the product of a labor force participation rate stuck at a 35-year low…moreover, the rate remains well above the 6.5% level the Fed has targeted before it will begin raising rates…inflation, meanwhile, is barely 2% – below the Fed’s 2.5% target and indicative of an economy that is not clear of a potential deflationary problem…

The Fed will also unveil its 2016 economic forecasts today, and investors will be paying close attention to that and what the Fed will say about its Federal funds target rate in 2016…the rate influences a range of consumer and business loans, and the Fed has tried to assure markets it will not move short-term interest rates anytime soon…

One issue that been overlooked recently, due to all the focus on the Fed and the Syrian problem, is the U.S. debt ceiling…expect the media to quickly turn its attention to that once the Fed issue is out of the way today…Congress and the administration must come together on the debt ceiling very soon, but history tells us any deal will be a last-minute one…the government has been bumping against its $16.7 trillion debt ceiling limit since May…its spending authority is set to expire on September 30 while the Treasury is set to lose its borrowing authority by mid-October…Gold could benefit from this upcoming showdown which is likely to produce some overall market volatility…

Today’s Markets

Asian stocks were mostly higher overnight…Japan’s Nikkei average climbed 194 points to 14505…China’s Shanghai Composite added 6 points to close at 2192…average new home prices in 70 Chinese cities rose faster in August than at any time since January 2011 despite government measures to keep property prices in check…it was the 7th straight month of price increases compared with year-earlier levels, according to data released today by the National Bureau of Statistics…

European shares are modestly higher in late trading overseas…

The Dow is down 14 points after posting gains in 6 out of the last 7 sessions…the TSX is off 24 points while the Venture is up 2 points at 937…Mike England’s Caribou King Resources Ltd. (CKR, TSX-V) is the runaway volume leader so far this morning, hitting a new 52-week high of 10.5 cents on total volume (all exchanges) of nearly 5 million…graphite plays remain hot…CKR announced this morning that it has discovered graphitic marble and sulphidic blocks on its 100% owned Calumet graphite prospect contiguous to Canada Carbon Inc.’s (CCB, TSX-V) Miller Property…

Canada Carbon Inc.(CCB, TSX-V) Chart Update

Canada Carbon Inc. (CCB, TSX-V) continued to push higher in the opening minutes of trading today after busting through technical resistance yesterday at 30 cents…CCB hit a new 2-year high of 35 cents before being pushed back to 30.5 cents…as of 7:00 am Pacific, it’s down 2.5 cents at 31 cents…last week the company released preliminary airborne survey results that identified multiple anomalies over its 21 sq. km Miller hydrothermal lump/vein graphite property in Quebec…final data maps are expected by early next month which will allow CCB to prioritize a range of targets to model…momentum is in this stock’s favor at the moment but keep in mind there will be continued volatility with CCB as witnessed again this morning…we saw an attempt to test Fib. resistance at 36 cents…a re-test could certainly occur…RSI(14) was in overbought territory at 80% after yesterday’s close…as always, perform your own due diligence…this clearly remains highly speculative and more needs to be understood with regard to the property and its potential…below is a 3-year weekly CCB chart from John…

Teuton Resources Corp. (TUO, TSX-V)

Teuton Resources (TUO, TSX-V) recently staged a confirmed breakout above 15 cents which should now make that level strong new support…Teuton is a large landholder in B.C., and we initially brought this situation to our readers’ attention during the 1st half of last month when the stock was trading in the 8 to 10-cent range…the company has now completed a drill program at its High Property, immediately south of Pretium Resources‘ (PVG, TSX) Brucejack Property, and results are expected in about a month…in the meantime, the company released some high-grade grab samples yesterday from its King Tut zone where near-surface drilling was recently carried out…speculation could drive TUO further in the weeks ahead but those results will need to exceed expectations in order for the stock to sustain its current uptrend…another positive factor in TUO’s favor recently was the sale of its remaining interest in the Tennyson Property to Brigade Holdings Ltd. for $7 million (cash plus shares)…TUO is quiet so far this morning (no trading) after closing yesterday at 16 cents…

North American Nickel Inc. (NAN, TSX-V)

As expected, North American Nickel (NAN, TSX-V) is beginning to heat up in anticipation of assay results from its newly-named Imiak Hill conduit complex located on the northern part of the company’s 100% owned Maniitsoq Nickel-Copper-Cobalt and PGM project in southwest Greenland…NAN has reported impressive intercepts of sulphides from close to surface down to over 60 metres deep with the system open at depth…potential grades look very good given the sulphide percentages…the big question is how much tonnage could be in that system…NAN has been encountering resistance at 30 cents which it finally overcame yesterday as it closed at 31.5 cents…that breakout requires confirmation today as shown in John’s chart…buy pressure is increasing and RSI(14) is showing up momentum, so the outlook appears positive…as always, perform your own due diligence…this is an interesting story and the company has done an excellent job at identifying this early-stage discovery and tackling the property in a way others failed to do so in the past…the area offers plenty of untapped potential…as of 7:00 am Pacific, NAN is up 1.5 cents at 33 cents…

Note: John, Terry and Jon do not hold share positions in CCB, TUO or NAN.

Gold has traded between $1,312 and $1,324 so far today after re-testing Fib. support yesterday at $1,307…as of 6:45 am Pacific, bullion is up $1 an ounce at $1,315 as the important 2-day FMOC meeting begins…Silver is down 21 cents at $21.64…Copper is up a penny at $3.21…Crude Oil is off 70 cents at $105.89 while the U.S. Dollar Index has fallen by more than one-tenth of a point to 81.13…

The Fed will decide to cut monthly purchases of Treasuries to $35 billion from $45 billion and keep mortgage-bond buying at $40 billion, according to the median estimate of 34 economists surveyed by Bloomberg September 6…we’ll see if they’re correct…Gold in our view has already priced in a scaling back of at least $10 a month in QE3…as we’ve mentioned, a “sell on rumor, buy on news” scenario is very possible as far as bullion is concerned regarding tomorrow’s Fed decision…the language the Fed uses in its policy statement, followed by Chairman Ben Bernanke’s “spin” in his news conference afterward, could be just as important as the tapering number itself if the Fed does decide to begin scaling back its monthly bond-buying program…and the extent to which the Fed is going to be able to slow the growth of its ballooning balance sheet ($3.6 trillion) over the next 6 months to a year is going to be interesting and critical to see…

Peter Schiff, CEO of Euro Pacific Capital and a known greenback bear and Gold bug, told CNBC:  “[The Fed is] afraid that just the beginning of the taper might be the beginning of the end, because the bond market might get killed, which means interest rates rise for the government, mortgage rates rise for the homebuyers, and that’s it for the recovery.”

Goldman’s head of commodities research, Jeffrey Currie, told Bloomberg television last Friday that Gold may drop below $1,000 for the 1st time since October 2009 as the Fed gradually withdraws stimulus and the economy improves…it may then stabilize near $1,200 over the longer term because of production costs, he added…Currie issued a sell recommendation for bullion on April 10 before prices plunged 13% in a 2-session slump (the “Goldman Gold Smash”) that sent the metal plunging below critical support at $1,500…Currie made a good call in April…we’re not so sure he’s going to be right this time around…the Chinese have proven to be very aggressive buyers on any significant weakness in Gold (there has been a large shift in physical Gold from West to East in recent months) and prices below even $1,300 an ounce on a sustained basis would make many mines uneconomic…combined with what we already know is considerably less exploration, Gold supply would be critically affected…the Venture Exchange has also not been performing in a way recently that would suggest another plunge in Gold prices is in the cards…in fact, the Venture has significantly out-performed bullion so far this month which is highly encouraging…the Index has shrugged off 4 significant down days in Gold this month totaling about $100 an ounce – behavior we haven’t seen by the Venture since its bear market began in early 2011…

U.S. Dollar Index Alert – Major Move In The Works?

There are some interesting developments in the U.S. Dollar Index, making this a critical week for the greenback…yesterday, the Index dropped below a down trendline for the 1st time in its 2.5-year uptrend…it could quickly and violently reverse higher, or take a plunge…the latter scenario seems more likely…RSI(14) has been trending down since May and there was an RSI(14) divergence with price when the Index peaked at the end of June/early July, right around the time both Gold and the Venture appeared to bottom out…the Dollar Index could easily test chart support at 79 in the near future which would be bullish for both Gold and the Venture…

Interesting op-ed piece by Martin Fieldstein in this morning’s Wall Street Journal (“How To Create A Real Economic Stimulus”)…he argues, correctly, that entitlement reform in the U.S. is key to shrinking the ratio of debt to GDP and making room for pro-growth tax cuts…

“The national debt has increased from 37% of gross domestic product before the economic downturn to 75% now. The Congressional Budget Office warns that the debt will remain at that level for the coming decade and then rise rapidly as the aging population increases the cost of Social Security and Medicare. The large projected national debt is a drag on the economy, causing businesses and entrepreneurs to fear higher tax rates and a sharp rise in interest rates when the Fed stops its massive bond purchases (our note – the federal government also should be fearing a sharp rise in interest rates as that’s how its debt could really explode).”

“Entitlement reforms and a limit on tax expenditures are the keys to creating the framework for the tax-rate reductions and infrastructure spending that can stimulate growth and employment while gradually shrinking the relative size of the national debt. Without such a program, the U.S. economy will continue to limp along with slow growth, declining earnings and weak employment,” Feldstein concluded…he was Chairman of the Council of Economic Advisers under President Reagan…

Today’s Markets

Asian markets were weaker overnight amid anticipation of a reduction in U.S. stimulus ahead of the Fed meeting…China’s Shanghai Composite corrected 46 points or 2% to close at 2186…Japan’s Nikkei average was also lower, finishing down 93 points…

European shares are down modestly in late trading overseas…

Stock index futures in New York as of 5:50 am Pacific are pointing toward a slightly higher open on Wall Street after strong gains yesterday and last week…the Labor Department reported this morning that its Consumer Price Index edged up 0.1% in August after rising 0.2% in July…in the 12 months through August, the increase in the CPI slowed to 1.5% after advancing 2% in July…the Fed would have no trouble seeing inflation heat up a little bit…Fed officials have expressed concerns about the dangers of deflation…

TSX Updated Chart – Important Breakout Imminent?

The outlook for the TSX continues to be very positive – note the reversal at the end of June and the firm uptrend in place as the Index gets set to challenge strong resistance at 12900, a level it has failed to overcome on several occasions since the beginning of last year…below is a 6-month daily chart from John…important breakout appears imminent…the TSX Composite closed yesterday at 12817…

Garibaldi Resources (GGI, TSX-V)  Chart Update

The recent pullback in Garibaldi Resources (GGI, TSX-V) has been very healthy from a technical point of view, and has also moved stock from weak hands into strong hands – a necessary process in order to lay the groundwork for a sustained move higher…in fact, there are some very interesting similarities between the GGI chart and the Canada Carbon Inc. (CCB, TSX-V) chart immediately below it…CCB surged from a nickel to 19 cents, corrected to 9.5 cents (its rising 100-day SMA), and then zoomed beyond 30 cents…GGI went from a nickel to as high as 17 cents, corrected back to its 100-day SMA yesterday, and now appears well-positioned to resume its upward climb…

RSI(14) on John’s 6-month daily GGI chart has reversed to the upside after touching previous support, and Slow Stochastics shows a bullish +DI/-DI crossover…we continue to smell something special brewing up in the Sheslay River Valley, an area that has the clear potential to produce the next significant discovery in northwest British Columbia in the weeks ahead…

Canada Carbon Inc. (CCB, TSX-V) Updated Chart

Canada Carbon Inc. (CCB, TSX-V) clearly has momentum on its side as it closed above resistance at 30 cents yesterday…while RSI(14) at 79% shows significantly overbought conditions on this 3-year weekly chart, momentum could easily carry CCB to the next Fib. resistance level in the near future which is 36 cents…that’s not a price target, just a theoretical level based on Fib. analysis…as always, perform your own due diligence…

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