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Gold has traded between $1,212 and $1,232 so far today…as of 7:30 am Pacific, bullion is down $8 an ounce at $1,214…Silver is up 3 cents at $17.53…Copper is flat at $3.06…Crude Oil is 52 cents higher at $93.05 while the U.S. Dollar Index, on track for a record 11th straight weekly gain, has surged more than one-third of a point to 85.57…the move through stiff chart resistance around 85 demonstrates the extent of the greenback’s current powerful momentum which continues to apply pressure on Gold…

Commerzbank this morning expressed concerns over the fact that Chinese Gold imports from Hong Kong remain subdued…they failed to point out, however, that imports out of Hong Kong are increasingly becoming less reliable as a guide for determining Chinese demand…it’s important to keep in mind that China has started to allow Gold imports through its capital Beijing, in a move that helps keep purchases by the world’s top bullion buyer more discreet…the opening of a third import point after Shenzhen and Shanghai is threatening Hong Kong’s pole position in China’s Gold trade, as the mainland can get more of the metal it wants directly rather than through a route (Hong Kong) that discloses how much it is buying…so less emphasis has to be put on Hong Kong net Gold exports to China…Commerzbank reported this morning that analysts cite data from Hong Kong’s Census and Statistics Department showing China imported only 27.5 metric tons of Gold on a net basis from the former British crown colony in August. “This puts net imports only slightly above the previous month’s low level, which constituted the lowest figure since June 2011,” Commerzbank stated. “Chinese net Gold imports from Hong Kong have totaled 497 tons since the beginning of the year, 33% down on the corresponding period last year. Chinese Gold demand looks set to fall well short of last year’s total even if it picks up in the next few months.”

Today’s Equity Markets

Asia

Asian markets were mixed overnight following Wall Street’s worst day in 2 months…China’s Shanghai Composite posted a slight gain to close at a fresh 18-month peak for the third consecutive session…nuclear power firms led the gains on local media reports that nuclear projects may be restarted…in Japan, the Nikkei average declined by slightly less than 1% to close the week at 16230…

Europe

European markets are mixed in late trading overseas…

North America

After experiencing their biggest single-day losses since July 31, the Dow up 66 points as of 7:30 am Pacific while the S&P 500 has added 5 points to 1971…

The U.S. economy grew at its fastest pace in 2-1/2 years in the second quarter and activity was broad-based, in a bullish signal for the remainder of the year…the Commerce Department this morning raised its estimate of GDP to show the economy expanded at a 4.6% annual rate in Q2…the best performance since the fourth quarter of 2011 reflected a faster pace of business spending and sturdier export growth than previously estimated…

Meanwhile, U.S. consumer sentiment finished September at its strongest in more than a year on growing optimism about the economy and a more favorable outlook on future income…this morning’s Thomson Reuters/University of Michigan’s final September reading on the overall index on consumer sentiment finished at 84.6, the highest since July 2013, up from 82.5 at the end of August…

Dallas Fed President Richard Fisher, speaking yesterday, said a rate hike could occur in the spring of next year – one of several reasons for yesterday’s nervousness in equity markets…helping drive the losses were signs of deepening tensions between Russia and the West following a report that a draft law in Russia could open the door for courts there to seize foreign assets in Russian territory…back-and-forth sanctions over the conflict in Ukraine has curtailed economic growth in Europe, a major trading partner with Russia…investors remain concerned about the continuing risk of recession in Europe and about the possibility that Chinese growth may be slower in coming months than it was in past years…they’re also focused on Russia and concerned about developments in the Middle East…sometimes, however, markets do like to climb a wall of worry…

Technically, where do things stand with the S&P 500?…below is a 1-year daily chart from John that shows how the S&P is now trading within the lower half of a well-defined uptrend channel with RSI(14) approaching previous support around 35%…nothing to be alarmed about here with strong chart support at 1900 which coincides with the rising 200-day moving average (SMA)…the S&P has had a habit of briefly dipping below its 50-day moving average (SMA), currently at 1976, and then quickly reversing to the upside…

S&P 500 1-Year Daily Chart

TSX 1-Year Daily Chart

The chart for the TSX paints a somewhat more complex picture, and certainly reflects the weakness in commodities which makes up a significant part of the Index…unlike the S&P 500, the TSX has broken below an upsloping channel in place for more than a year and a longer-term negative RSI(14) with price is a concern…RSI(14) is now clearly oversold at 22%…the Fib. 61.8% retracement level is 14733, about 100 points above the rising 200-day SMA…a bearish -DI/+DI crossover earlier this month foreshadowed weakness in this market…a rally out of oversold conditions could certainly occur at anytime but the TSX has some work to do to regain its footing…it’s up 50 points through the first hour of trading today…

Venture-Gold 3 Year Weekly Chart

This 3-year weekly Venture–Gold comparative shows how the Venture RSI(14), which broke below an uptrend line on this particular chart earlier this month, has now landed at previous support at 31% (will it hold?)…there continues to be a high correlation between the Venture and Gold, though the Venture has generally been out-performing the metal since late last year…this fact suggests that Gold made an important low in late June, 2013…

The Venture is up 2 points at 913 as of 7:30 am Pacific after 9 straight losing sessions…

Venture 15-Year Daily Chart

This very long-term daily chart shows something amazing – the Venture’s RSI(14), at just 14.3%, is now at one of its most oversold points in 15 years, essentially matching the June 2013 low and within a whisker of the lows seen during the 2008 Crash…this doesn’t mean the RSI(14) and the Index can’t still go lower, but these extreme low RSI(14) levels have consistently occurred at opportune buying points over the last 15 years as you can see on this chart (and the reverse is also true when this indicator pushes above 70%)…

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

Columbus Gold (CGT, TSX-V) continues to show technical strength as well as progress on the ground with 3 drill rigs now in operation at the Montagne d’Or Gold deposit (Paul Isnard Project) in French Guiana…as reported by the company last week, the current phase II program is scheduled to be completed by the end of October/early November…

Recent results from hole MO-14-167 (38.6 m grading 4.48 g/t Au) were highly impressive and demonstrate the potential for exceptional grades and widths in the principal UFZ zone…

The Montagne d’Or deposit hosts an inferred resource of 140.1 million tonnes grading 1 g/t Au for a total of 4.3 million contained ounces…an updated estimate is expected following completion of the current drilling which is being financed by Nord Gold NV…this is part of a minimum $30-million (U.S.) exploration and development program pursuant to which it can earn a 50.01% interest in Montagne d’Or and the Paul Isnard mineral claims by completing a bankable feasibility study no later than March, 2017…

Meanwhile, the company reported at the beginning of this week that a “prominent” U.S. investor has agreed to acquire approximately 9.9% of Columbus Gold, representing the entire private placement ($5.36 million at 40 cents per share) on amended terms from those announced a few weeks ago (this includes a reduction in the size and price of the offering, and no warrant component)…proceeds will be used in part to fund an extensive drill program at the company’s Eastside Gold discovery in Nevada…

CGT dipped to an intraday low of 43.5 cents Wednesday before recovering yesterday to close at 48 cents…

Note the bullish “W” in the RSI(14) and the attempt now to gain traction and breakout above the recent downtrend line which the rising 200-day SMA is nearly intersecting…as always, perform your own due diligence…

CGT is off 2 pennies at 46 cents as of 7:30 am Pacific…

Cematrix Corp. (CVX, TSX-V)

If you’re looking for something other than Gold to invest in at the moment, you may wish to do some research on cellular concrete and Cematrix Corp. (CVX, TSX-V) which announced yesterday that it has secured its largest contract yet ($6.8 million) to boost this year’s total contracted work to a record $14.7 million…record revenues are great but hopefully that can also translate into some earnings momentum…CVX reported earnings of less than $100,000 in Q2 after a Q1 loss of over $700,000…Cematrix provides cellular concrete product for many applications in oilsands, oil and gas facilities, and infrastructure projects throughout Canada…

“This is a truly historic day for our company,” stated Jeff Kendrick, CVX President & CEO in yesterday’s news release.  “The results we are achieving today from a revived oil sands and refinery construction market, together with the growth of the infrastructure market throughout Canada and the United States, are a testament to the dedication of the Cematrix team and our unwavering belief in our product and solutions. Some of these projects are years in the making as we work with our customers from the design phase of each project including thermal modelling, through to the final pouring of our product,” he added.  

What’s encouraging about this 2+ year weekly chart is the uptrend support line…CVX jumped a nickel yesterday to close at 19 points on one of its highest volume days ever (372,000)…there is chart resistance at 20 cents…some backfilling could occur here but this is a situation worth keeping an eye on for long-term investors…CVX has 34 million shares outstanding…

CVX is unchanged at 19 cents through the first hour of trading…

Note:  John, Terry and Jon do not hold share positions in CGT or CVX.