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Gold has traded between $1,188 and $1,198 so far today…as of 9:15 am Pacific, bullion is up $4 an ounce at $1,196…Silver has added 9 cents to $16.22…Copper is flat at $2.69…Crude Oil has hit a new high for 2015, surging more than $2 a barrel to $55.50, while the U.S. Dollar Index has backed off from its morning high and is now up slightly at 98.95 (see updated chart this morning)…

As expected, China’s economy started the year on a downbeat note with its slowest quarterly growth rate since 2009, pointing to a further loss of momentum for the world’s second-largest economy…the 7% 1st-quarter year-over-year growth rate marks a slowdown from 7.3% in the 4th quarter…it also puts more pressure on economic planners to ease fiscal and monetary policy even as they try to avoid excessive stimulus that could boost debt and fuel more overcapacity in real estate and heavy industry…

Additional data released today by China’s National Bureau of Statistics showed that growth in industrial production, fixed asset investment and retail sales in March decelerated…all came in below economists’ expectations…

The strong U.S. dollar will start to hinder growth in the country, according to analysts at Nomura in their just-released Global Economic Outlook Monthly Report…they expect the U.S. economy to grow below 3% in 2015, and eventually around 2% in 2016. “Although some of these near-term shocks will likely dissipate, we now believe the stronger dollar will have a notable negative impact on growth through trade in 2015,” they say. “In addition, we believe that there is still some way to go before the Oil and gas rig count reaches its nadir, which should produce a further drag on business capex in the first half of the year before starting to rebound in late 2015.”

Oil Update 

Oil prices continue to gain traction above $50 a barrel on favorable short-term technicals and some upbeat fundamental news this morning…

Stockpiles of U.S. Crude grew by only 1.3 million barrels in the week ended April 10, the EIA reported this morning…in the prior week, the agency reported stocks surged by nearly 11 million barrels, the largest build since 2001…total inventories stood at 483.7 million barrels, the highest level on record…

Meanwhile, the EIA, which advises industrialized nations on Oil policies, gave an upbeat note on demand this morning, saying it would rise by 1.1 million barrels a day this year…that would be a “notable acceleration”, it pointed out, on last year’s 700,000 barrels a day growth…the IEA’s estimates confirm several signs of demand growth that Oil analysts have pointed out in recent weeks…yet the agency also warned about continued over-supply problems…

“In some ways, the outlook is only getting murkier. That’s in part because the backdrop against which the adjustment is playing out is constantly changing…recent developments thus may call into question past expectations that supply and demand responses would tighten the market from mid-year on…the market re-balancing may still be in its early stage.”

Technically, WTIC has recently built strong support at the $50 level which is also the now-rising 50-day SMA…resistance at $54 is currently being tested…notably, RSI(2) is now at its highest level (95%) since February of last year on this 2-year weekly chart…such an extreme reading underscores the recent shift in sentiment with WTIC rallying 31% from its March low…that was the “easy money” to be made in the recovery from record oversold conditions…short positions would likely begin to rebuild significantly on a move toward the $60 level…

U.S. Dollar Index Update

Technically, one has to wonder if the dollar has put in a short-term “double top” as part of a corrective phase that started in mid-March…if it has, this would certainly be bullish for commodities and the Venture over the coming weeks…neither can afford a breakout by the Dollar Index anytime soon above last month’s 12-year high of 100.71…

Euro 7-Month Daily Chart

The euro has been the mirror image of the Dollar Index, and a big question is whether or not the euro can hold critical support at 105 and perhaps confirm a short-term double bottom in advance of a significant rally…the next several trading sessions should provide some clarity…on a few occasions since last month, the euro has failed to overcome stiff chart resistance at 110 which is also now the 50-day SMA…

Today’s Equity Markets

Asia

China’s Shanghai Composite cooled off overnight on profit-taking, falling 52 points to close at 4083…the expectation of continued stimulus measures, however, should keep this market buoyant…

Europe

European markets were up moderately today…the ECB left interest rates unchanged, amid early signs that the central bank’s recent massive bond-buying program launched last month is helping underpin growth in the 19-country currency bloc…today’s rate decision came amid signs that the euro zone is turning the corner after years of recession and stagnation…recent data from information services firm Markit showed that the region’s economy grew at its fastest pace in nearly a year in March…the bloc’s largest economy, Germany, is expected to have posted strong growth in the 1st quarter, based on consumption and trade figures…

North America

The Dow has added 60 points as of 9:15 am Pacific…

The manufacturing sector in the New York region turned negative for the first time since December, according to the latest data from the New York Federal Reserve…the general business conditions index in the Empire State manufacturing survey fell by 8 points to a reading of –1.2 in April, compared to March’s reading of 6.9…according to consensus estimates, economists were expecting to see a modest rise in the region’s manufacturing sector, forecasting a reading around 7.2…

In Toronto, the TSX has added 102 points as of 9:15 am Pacific while the Venture is up 8 points at 704 as it closes in on key 707 resistance…

The Canadian economy has stalled and won’t grow at all in the first quarter as the damage from the Oil price collapse hits hard and early, the Bank of Canada said this morning…but the central bank has opted to keep its key overnight lending rate at 0.75%, insisting that the rest of the year will be much better as lower interest rates filter through the economy and exports rebound…

Prime Minister Narendra Modi has arrived in Canada for a 3-day, 3-city visit, the first by an Indian Prime Minister to Canada in over 40 years…media reports say that a breakthrough agreement for India to buy Uranium from Cameco Corp. (CCO, TSX) is expected to will be unveiled today…

India’s growth story is expected to dominate the headlines in the years ahead with both the World Bank and the International Monetary Fund predicting robust expansion for Asia’s third largest economy on the back of free-market reform initiatives launched by the government and the impact of lower global Oil prices…the fact that India will overtake China as the world’s fastest growing economy by 2015–16 is well acknowledged…the World Bank in a report on South Asian economies said India’s economy is expected to accelerate to 8% in 2017–18 after a growth of 7.6% in 2015–16…in 2014–15, growth is expected to be 7.2%, the World Bank said in its South Asia Economic Focus Spring 2015 titled “Making the Most of Cheap Oil”…

North Arrow Minerals (NAR, TSX-V) Update 

North Arrow Minerals (NAR, TSX-V), looking very strong, hit a new multi-year high of 98 cents yesterday, just 2 pennies below the nearest measured Fib. resistance level…the company’s solid portfolio of diamond projects, overseen by an exceptional management team, are highlighted by Qilalugaq in Nunavut where positive initial results, including rare yellow-hued diamonds, were released in late February from a 1,500-tonne sample of kimberlite…

Technically, there were 3 key reasons for the bullish call on NAR in January:

1.  The breakout above the downtrend line

2.  The breakout above the horizontal channel and Fib. resistance at 55 cents

3.  The reversal to the upside last month in the 50-day moving average (SMA)

Other important positive factors included the RSI(14) uptrend and the bullishness in the ADX indicator…

NAR’s uptrend line should provide continued support in the event of a pullback from the $1.00 Fib. resistance, though an immediate sharp breakout from this level is very possible given the stock’s current technical posture…

NAR is unchanged at 91 cents as of 9:15 am Pacific…

Eskay Mining Corp. (ESK, TSX-V) Update 

The intense accumulation in Eskay Mining (ESK, TSX-V) since the summer of 2013 has been quite amazing given the state of the markets, and there’s every reason to believe there has to be something significant in the works here, especially given an almost total absence of news…

Eskay controls 40 sq. km surrounding the prolific past producing Eskay Creek mine, and they have some giant neighbors – Pretium Resources (PVG, TSX) and Seabridge Gold (SEA, TSX)…while it was in operation, Eskay Creek was the second richest deposit in North America and the 5th largest Silver producer in the world…

We can’t help but think there are some bigger companies looking at ESK’s land package for a potential deal…

Technically, a confirmed breakout above Fib. resistance at 15 cents would be significant…

Note:  John, Terry and Jon do not hold share positions in NAR or ESK.