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Gold has traded between $1,729 and $1,737 so far today…as of 7:20 am Pacific, bullion is up $1 an ounce at $1,733…Silver is 4 cents higher at $33.15…Copper is down a penny at $3.50…Crude Oil is 69 cents lower at $88.59 while the U.S. Dollar Index has retreated over one-tenth of a point to 80.92…

Today’s Markets

Asian markets were slightly lower overnight while European shares are mixed this morning…meanwhile, the Dow and the TSX are both down modestly in early trading after yesterday’s strong gains…markets started showing signs of reversing last Friday after an overdone sell-off that was largely inspired by the mainstream media’s “Fiscal Cliff” scare mongering, an improper and emotionally-charged phrase that has created a lot of unnecessary panic by investors…it’s more of a “Fiscal Slope” than anything, and U.S. lawmakers will undoubtedly do what they have to do in order to come to an agreement on spending cuts and taxes in time for January 1…the Venture Exchange is up another 2 points at 1252…

Bernanke Speaks This Morning

Federal Reserve Chairman Ben Bernanke could give markets and Gold another boost today when he speaks on “the economic recovery and economic policy” at the Economic Club of New York at 12:15 p.m. eastern…

Bank Of Japan Holds Fire On Policy Changes As Expected

The Bank of Japan kept monetary policy steady today, standing its ground for now in the face of calls from the country’s likely next prime minister to pursue “unlimited” easing…in a sign of the times, the leader of the main opposition, Shinzo Abe, has put the central bank at the center of economic debate ahead of a Dec. 16 national election that surveys show his party would win, signaling his government would put the bank under much greater pressure to ease policy…Abe has even suggested revising the Bank of Japan law, a step critics say is aimed at clipping the central bank’s independence and forcing it to print money to finance public debt that is already double the size of Japan’s economy…but the central bank kept monetary policy steady after a two-day meeting yesterday, holding fire so it can size up the policies of a new government to be formed after the December vote for the powerful Lower House…markets had expected the central bank to hold fire on any policy changes…”The BOJ will pursue powerful monetary easing continuously by keeping interest rates virtually at zero and steadily increasing the amount outstanding of its asset-buying program,” the central bank said in a statement, repeating a pledge to maintain ultra-loose monetary policy to achieve 1% inflation…

Moody’s Kicks France

Not surprisingly, Moody’s stripped France of its triple-A rating yesterday as it delivered a stinging critique of President François Hollande’s attempts to turn the economy around amid the euro-zone crisis…Moody’s said the main reasons for its action is the economy’s weakness and the risks to the government’s finances “posed by the country’s persistent structural economic challenges” – not the least of which is the country’s reliance on borrowing to finance generous social-welfare programs…the downgrade brings Moody’s ratings for France in line with a move earlier this year by rival agency Standard & Poor’s, so the negative news has already been priced into markets…

U.S. Housing Starts Strong

U.S. housing starts rose to their highest rate in more than four years in October, suggesting the housing market recovery was gaining steam, even though permits for future construction fell…the Commerce Department said this morning that housing starts increased 3.6% to a seasonally adjusted annual rate of 894,000 units – the highest since July, 2008…economists had expected groundbreaking to slow to an 840,000-unit rate…

Venture Exchange

The Venture Exchange is holding important support and has rebounded more than 30 points since last Thursday’s intra-day low of 1219…a major trend change, which is one of the reasons we’re bullish regarding the direction of the Venture for 2013, is a 4-month out-performance by this Index against the Dow…during much of that time the Venture has also out-performed Gold..this is something we haven’t seen since the CDNX bear market started in March of last year…it’s a modest out-performance, as shown in John’s 4-month chart below, but it’s important nonetheless…if overall markets were in trouble, the Venture would be leading the way downward…instead, it has taken the lead to the upside…

CRB Index & The U.S. Dollar Index

Two other indicators that are important to follow in sizing up the Venture are the CRB Index and the U.S. Dollar Index…interestingly, the CRB Index is looking fantastic – in the last three weeks it has formed a base at the Fibonacci 50% retracement level after making a 20% move in less than 3 months after bottoming at just under 270…notice in this 1-year weekly chart from John how the Index is now coming out of extreme oversold conditions…there’s also a crossover in the Slow Stochastics (%K has crossed above %D)…

CRB Index

U.S. Dollar Index

The U.S. Dollar Index is facing a very stiff resistance band between 81 and 81.50…it’s also in danger of forming a head and shoulders top as shown in the 2.5-year weekly chart below…

Discovery Ventures (DVN, TSX-V)

Volume in Discovery Ventures (DVN, TSX-V) exploded beginning in September and the stock is showing no signs of slowing down…yesterday, DVN announced (pursuant to its Oct. 18 news) that it has entered into a definitive agreement with a privately held British Columbia company to earn an 80% interest in the 5,000-hectare Willa Gold-Copper Property in the Slocan Valley, just 8 miles north of Rainbow Resources‘ (RBW, TSX-V) Gold Viking Property where a 12-hole drill program was just completed…DVN will pay a total of $3 million cash over a three-year period as part of the deal…it sees Willa as a near-term production opportunity given the property’s historical resources and the $15+ million that has historically been invested in the project…Willa features completed underground mine workings consisting of two adit leels, an internal level with two declines and two raises connecting the levels..the main haulage level runs for 900 metres and is equipped with 60-pound rail…

Technically, DVN faces resistance at the moment between 32 and 36 cents, as shown in the chart below, but this is definitely a situation to watch closely…with only 24 million shares outstanding (and no warrant “overhang”), DVN’s current market cap is only $7.7 million…the Willa Project will definitely be a boost for the exploration and mining industry in the area which is a positive development as well for Rainbow, especially if it has drilling success at Gold Viking…

Kaminak Gold (KAM, TSX-V)

Yukon plays have been hurting lately, not the least of which is Kaminak Gold (KAM, TSX-V) which has fallen in 12 out of the last 14 sessions…KAM is in a strong cash position and is expected to release the first NI-43-101 resource estimate for its Coffee Project sometime during the first quarter of next year…drilling for 2012 is complete and will re-start next March…KAM met resistance at the $2.40 level in September and October, so a pullback was likely because of that, but the sell-off certainly appears to have been overdone…KAM does have support at the $1.40 level and could now be ready to work its way out of these heavily oversold conditions…we can’t help but think KAM will be performing much better in a couple of months…as always, perform your own due diligence, and always be prepared for volatility…

Note: John and Jon both hold share positions in RBW.  Jon also holds share positions in DVN and KAM.