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Gold has traded between $1,190 and $1,204 so far today…as of 8:40 am Pacific, bullion is unchanged at $1,195…the last 2 sessions have witnessed $30 intra-day moves and today may prove volatile as well with a Fed policy decision and statement followed by a Janet Yellen news conference…Silver is up 13 cents at $15.85…Copper is now flat at $2.92 after hitting a low of $2.88 this morning…Crude Oil has reversed higher, now up 64 cents at $56.57, while the U.S. Dollar Index has gained two-thirds of a point to 88.55 in anticipation of a mildly hawkish Fed statement…

The 2-day FOMC meeting wraps up today with the central bank releasing its statement and economic forecasts at 11:00 am Pacific, and Fed Chair Janet Yellen will then brief the media at 11:30 am…the Fed is widely expected to tweak the language in its statement by removing the phrase “considerable time”, a reference to how long it intends to keep rates low…but if they do, they’ll likely come up with some other creative wording (Fedspeak) to reassure the markets that they’re in no great rush to hike rates…any moves will be “data dependent” even though a return to “normalization” is inevitable…

The Fed can’t ignore this…U.S. consumer prices recorded their biggest drop in nearly 6 years in November as gasoline prices tumbled…the Labor Department said today that its Consumer Price Index fell 0.3% last month, the largest decline since December 2008, after being flat in October…in the 12 months through November, the CPI increased 1.3 percent, the smallest gain since February, after advancing 1.7% in October…

U.S. Gold mine production declined 7% in the first nine months of this year, the U.S. Geological Survey has reported…for the period from January through September of this year, U.S. Gold miners reported a total production of 5,111,929 oz…led by Nevada Gold mining, which yielded 3,633,006 oz during the period, Alaska Gold mines produced 787,687 oz while the combined output of Gold from Arizona, California, Colorado, Idaho, Montana, New Mexico, South Dakota, Utah and Washington totaled 691,236 oz…

Oil Update

Assuming an average price of $70 per barrel next year, CIBC estimates that Canadian governments will lose out on between $10 billion and $13 billion worth of revenue next year.  “The energy sector directly accounts for nearly 10% of Canada’s GDP, but in the oily corners of the country – Alberta, Saskatchewan, and Newfoundland and Labrador – that sector’s weighting is closer to 25 to 30%,” the bank says…

A Barrel Of Fun For Putin

Russia’s ruble strengthened modestly today after dramatic falls against the dollar in the previous 2 days…the ruble, however, remains extremely volatile and there are fears of a prolonged crisis…

The situation poses a major challenge for President Vladimir Putin whose popularity among the Russian people, based partly on providing stability and prosperity, is at risk from a ruble decline that is further damaging the country’s credibility among investors…Putin holds his annual end-of-year news conference tomorrow when he will field questions from a studio audience as well as from television viewers around Russia, and is expected to comment on the ruble’s decline…

Technology giant Apple says it cannot sell products online in Russia because the ruble’s value is too volatile for it to set prices…the company yesterday stopped sales of its iPhones, iPads and other products in the country after a day in which the currency went into free-fall…

Russia’s central bank said today that it had spent almost $2 billion intervening in the currency market on Monday…in total, it has spent around $80 billion this year trying to prop up the ruble…

Today’s Equity Markets

Asia

China’s Shanghai Composite (see updated chart below) was on fire again last night, climbing another 1.3% or 39 points with the banking sector leading the way…the Shanghai closed at 3060…

Japan’s Nikkei, meanwhile, edged up 64 points to 16820…Japan’s exports rose 4.9% in November, falling short of forecasts despite the weakening yen…Japan marked its 29th straight month of trade deficits…

Europe

European markets reversed earlier losses and finished moderately higher today…

North America

The Dow (see updated chart below) is up 145 points as of 8:40 am Pacific…

In Toronto, the TSX has climbed 258 points while the Venture has added 9 points to 651 as of 8:40 am Pacific…

Paramount Gold & Silver (PZG, TSX) is being gobbled up by Coeur Mining Inc. (CDE, NYSE) in a merger of the 2 companies…as a condition to closing the merger, the shares of Paramount’s subsidiary holding its Nevada mining assets will be spun off to holders of the company’s common stock…we wrote about the possibility of this a few weeks ago…PZG is up 23 cents at $1.01 on the TSX as of 8:40 am Pacific…Coeur’s strategy centers around the rich Don Ese structure which is considered to be the most valuable deposit at PZG’s San Miguel Project due to its high grades and continuity along strike and at depth…the Don Ese vein was originally identified by Garibaldi Resources Corp. (GGI, TSX-V) which continues to be a shareholder of PZG…we wouldn’t be surprised if Coeur was closely watching developments at GGI’s Rodadero Project…

The Venture appears to have found its December low intra-day yesterday at 637 – confirmation of this should come by tomorrow…John’s most recent long-term Venture chart showing the -DI indicator at peak levels seen at previous important lows was a good clue that an imminent turnaround was in the works…

Below is a table from John that shows the Venture “December-January Effect” – the average date of the January high over the last 14 years is January 14…

Venture Investor Survey From Stockhouse

Shanghai Composite Long-Term Chart

When the Shanghai is on a run, there’s little that can slow it down…the next measured Fib. resistance level is 3215…

What’s interesting about the Shanghai is that its correlation coefficient with the CRB Index is now at its most negative level in 20 years (-95%)…why both markets have been going in opposite directions throughout all of 2014 breaks the pattern that was in place since late 2008, and what that means is hard to say…

CRB Long-Term Monthly Chart

The CRB Index has now landed in a very strong band of support that stretches from 230 to 240…by every technical measure, the CRB should be putting in at least a short-term bottom with a strong rebound in the early part of 2015…such a move would be consistent with a late December Venture reversal…

Astonishingly, at 29.60%, the CRB’s RSI(14) is at its lowest level since 1999…%K on the SS indicator is also at its lowest level in 20 years… these are extreme oversold conditions that could become more extreme but this is when important bottoms are formed and massive upside moves can begin…

Dow 3-Month Daily Chart

Overbought RSI(14) conditions in late November/early December have unwound with RSI(14) now at previous support at 30% on this 3-month daily chart…the Dow also has strong Fib. support between 16750 and 17000…

IamGold Corp. (IMG, TSX) Chairman & Co-Founder Continues To Dump Stock

The chairman and co-founder of Iamgold Corp. (IMG, TSX) has sold roughly 40% of his shares in the company this year, according to regulatory filings, continuing a long-term trend in which he steadily unloads his stake…what great confidence this shows in the company…William Pugliese has dumped 1,475,000 Iamgold shares in 2014 at ever-decreasing prices, the filings show…he has been a heavy seller even though the stock has plunged 27% in 2014 amid weak Gold prices…IMG shares are down about 75% since the start of 2013…

British Columbia Approves Site C Dam Project

The British Columbia government has approved its most expensive mega project with the construction of an $8.8 billion dam on the Peace River that Premier Christy Clark says marks a historic milestone that will be felt for a century…the controversial Site C dam project, not surprisingly, was immediately denounced by First Nations and environmental groups as “incredibly stupid” (they’re the smartest ones in the room, of course) and a project “that will go down as the most expensive mistake in B.C.’s history.”

The fact of the matter is from a long-term standpoint, B.C. needs new energy and capacity, and the dam on the Peace River would provide a large amount of inexpensive power….