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Gold has traded between $1,199 and $1,216 so far today after yesterday’s strong rebound, bullion’s best single-day performance in 3 months…as of 9:00 am Pacific, as the Fed begins its 2-day policy meeting, the yellow metal is up another $11 an ounce at $1,213 on a host of factors…Silver has jumped 18 cents at $16.58 (updated charts this morning)…Copper has gained another 2 pennies to $2.76…Crude Oil is off slightly at $56.95 while the U.S. Dollar Index has fallen three-quarters of a point to 96.07, edging closer to strong support at 96…

Last week’s price action in Gold, and yesterday’s recovery, makes a little more sense given Venezuela’s $1 billion Gold swap with Citibank that was completed Friday…it seems forces were trying to keep Gold prices low while the two sides successfully negotiated the swap…the Venezuelan central bank is believed to have provided 1.4 million ounces of Gold in exchange for the cash (they have rights of first refusal to buy the Gold back), with interest on the funds rumored to be 6% to 7%…the deal removed an overhang from the Gold market which was also supported yesterday by some short-covering and the expiration of May options…

Gold is battling a resistance band between $1,200 and $1,210…the mid-$1,220’s (March-April highs) is another key hurdle bullion needs to overcome in order to put the bears on the defensive…

China Gold Production Up Nearly 15% In Q1

China’s Gold consumption was steady in the first 3 months this year, rising 1.1% to 326.68 metric tons compared to the same period in 2014 (this excludes banking activity) as relatively low bullion prices continue to attract Asian interest, especially in Gold jewelry…the country is likely to maintain this trend in demand growth for the rest of the year, according to China Gold Association (CGA) President Song Zin who spoke at an industry conference today..

The data show China’s demand for Gold is about 3 times the size of its domestic Gold production as the country continues to be the world’s biggest importer of the metal…China’s Gold production in Q1 this year also rose, by 14.7% to 110.7 tons, according to the CGA…overall, global demand and supply of the precious metal are likely to remain balanced, with consumption potentially showing slightly faster growth, most analysts say…

Although the macroeconomic environment is bullish for Gold, Barclays analysts say physical demand remains the key ingredient to support the market. “India’s festival-related buying was below expectations, and demand across Asia is broadly offering prices a soft floor,” they stated.

Gold Chart Update

This morning’s weaker-than-expected U.S. consumer confidence numbers were Gold-bullish, but tomorrow’s Fed policy statement as well as the initial reading on U.S. Q1 GDP will be critical in determining how Gold finishes the month…quite simply, the metal needs to start gaining traction above $1,200 – as it seems to be doing now – to build much-needed momentum…the bullish engulfing pattern in John’s 6-month daily chart this morning is a positive sign, along with the “W” formation (if it holds) in the RSI(14)…the nearest Fib. resistance is $1,217 which Gold came within 60 cents of this morning before backing off slightly…

Rising Middle East tensions could be in Gold’s favor as well…according to Saudi news network Al Arabiya, a U.S. vessel has been fired on today and steered to the Bandar Abbas port by Iran…Iran’s Fars News Agency also reported that an “American trade vessel” had been confiscated…however, senior U.S. Navy officials told NBC News these reports are false…the media will be following this story closely as the day progresses…

Today’s Equity Markets

Asia

China’s red-hot Shanghai Composite cooled off slightly overnight, falling 51 points to finish at 4476…Japan’s Nikkei average, meanwhile, climbed back above the 20000 level…

There’s no end to the innovation of central banks, and one has to wonder how this will all play out at some point down the road…The Wall Street Journal reported this morning (citing unnamed officials with “knowledge of the matter”) that China’s central bank is planning to launch its own version of innovative credit-easing programs adopted by its counterparts in developed countries…this flagship plan is aimed at overcoming the snags of restructuring trillions of dollars of local government debts, a potential major problem for the Chinese economy…

Under the plan, which could be put in place in the next couple of months, the People’s Bank of China will allow Chinese banks to swap local government bailout bonds for loans as a way to bolster liquidity and boost lending, the officials said…the strategy – dubbed Pledged Supplementary Lending – is similar to the long-term refinancing operations, or LTROs, used by the European Central Bank…

Europe

European markets were significantly lower today on profit-taking and mixed earnings reports…in addition, U.K. GDP came in below expectations this morning…the number hit 0.3% for the last period, below forecasts of 0.5%, and showed Britain’s economic growth slowed in the first 3 months of this year…

North America

The Dow is up 51 points as of 9:00 am Pacific…U.S. consumer confidence fell in April, giving back some of the strong gains seen in the previous month, according to the latest data from the U.S. Conference Board…the board said its monthly Consumer Confidence Index fell to 95.2 from March’s reading of 101.4…according to consensus forecasts, economists were expecting to see an increase to a reading of 102.6…

In Toronto, the TSX is off 33 points while the Venture has added 2 points to 692…

TSX Gold Index Update

The TSX Gold Index is at a critical level, and the odds seem to favor a breakout above Fib. resistance at 166 which coincides with a still-declining 50-day moving average but a rising 100-day SMA…the SS indicator shows up momentum is increasing – Gold could finally be ready to put on a show as April draws to a close…

The Gold Index is up 4 points at 168 as of 9:00 am Pacific…

Doubleview Capital Corp. (DBV, TSX-V) Update

An important technical breakout is unfolding in Doubleview Capital Corp. (DBV, TSX-V) which has finally pushed above a downsloping flag in place since last year…that breakout point also coincides with critical Fib. resistance at 15 cents…there is some potential explosiveness to this chart given the reversals to the upside now underway in both the 100 and 200-day SMA’s…

After 23 holes and a new round of drilling imminent, DBV’s Hat Project is now at a level of understanding that should allow for its rapid acceleration over the coming weeks and months…combined with the strong potential for a drilling discovery on adjoining ground held by Garibaldi Resources (GGI, TSX-V), the Sheslay district has its best opportunity yet to shine as one of Canada’s most promising exploration plays…

Silver Short-Term Chart

Silver found strong support last week in the mid-$15.50’s, as expected, and RSI(14) has broken above a downtrend line in place since the beginning of the month – this bodes well for a strong finish to April…

Silver got a boost around the middle of last month when it broke above a short-term downsloping flag that developed in February…the metal found support at the bottom of that flag which was critical, setting the stage for a move higher…temporarily overbought RSI(14) conditions then unwound…

The late March high of $17.41 is just below the next Fib. measured resistance at $17.86…

Silver Long-Term Chart

This 34-year monthly chart continues to give hope that Silver could be in the very early stages of a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…the reasons for such a possible move are also not clear at the moment…

RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15…

One note of concern on this chart is the sell pressure that has prevailed since the beginning of 2013, after a decade-long period of buy pressure…based on historical patterns, sell pressure could persist for a considerable time yet – though that doesn’t necessarily mean that the price can’t still trend higher…nonetheless, it would be encouraging to see this sell pressure begin to abate…it has eased off only very slightly in recent months…

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