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Gold is weaker this morning after encountering resistance around the $1,750 area…as of 6 am Pacific, the yellow metal is off $12 an ounce at $1,733 after dropping as low as $1,728…Silver is a nickel lower at $32.59…Copper is up a penny at $3.58…Crude Oil is 81 cents higher at $101.83 while the U.S. Dollar Index is off one-fifth of a point at 78.39…

Overall, Gold remains bullish and a minor pullback after last week’s move to the upside is very normal…commercial traders’ short positions in Gold are relatively low which supports a bullish case for December and going into 2012…their short positions in Silver are astonishingly low which bodes very well for that market…

The “Iran factor” is one of the reasons for Oil’s strength recently…rising tensions between Iran and the West have increased the risk of disruption to crude shipments by the world’s fifth-largest oil exporter…Iran warned the West yesterday that any move to block its oil exports would more than double crude prices with devastating consequences for a fragile global economy…it’s clearly a matter of economic and national security for Canada and the United States to produce more Oil in their respective domestic markets and forge ahead as quickly as possible with the Keystone Pipeline Project, but the environmental wing-nuts on both sides of the border are completely detached from reality and their actions are a threat to that security…this week’s meeting at the White House between Prime Minister Harper and President Obama should prove interesting as Obama, who seems to be afraid of angering his environmental constituency, needs a wake-up call and he may get one…

There is some good news out of Washington this morning…Senate Democrats plan to offer a new proposal today to extend a popular payroll tax cut amid signals that Republican leaders would accept a compromise that covers the cost to the federal Treasury…

Dow futures are pointing strongly higher as of 6:00 am Pacific…the CDNX starts the new week at 1557…the technical picture with the CDNX is showing some improvement and a move through 1600 this week would be a very bullish sign…

Canaco Resources (CAN, TSX-V) released more drill results from its Magambazi discovery in Tanzania this morning including 13 metres grading 4.78 g/t Au starting 30 metres below surface, east of the Magambazi Main Lode…drilling continues to infill and extend mineralized zones…Canaco closed Friday at $1.50…it’s hard to imagine it won’t enjoy a much better 2012 after falling from a high of more than $6 per share last spring…an initial NI-43-101 resource estimate for Magambazi is expected by the end of the first quarter…the company is sitting on more than $100 million in cash and has a current market cap of $300 million…

Some of our readers, in addition to our chart analyst, have scooped up shares recently in Canada Rare Earths (CJC, TSX-V) which has been motoring along nicely…it jumped 8 cents Friday to close at 52 cents…reversals in the 50 and 100-day moving averages (SMA’s) are very telling along with this updated 2.5-year weekly chart from John that takes out a lot of the daily “noise”…

It’s very much a pivotal week for the euro zone…French President Nicolas Sarkozy and German Chancellor Angela Merkel are meeting in Paris today under pressure to align their positions on centralizing control of euro zone budgets to stem a debt crisis that threatens Europe’s currency union…after individually outlining their views last week on closer fiscal integration, the two leaders must overcome remaining differences in order to fine tune proposals they want to present to EU leaders in Brussels on Thursday, on the eve of a summit…this will be a critical week for the euro zone with European Central Bank chief Mario Draghi signaling that a euro zone “fiscal compact” could nudge the bank to act more decisively to fight the crisis… what will be fascinating to watch over the coming week is the extent to which the markets try to exert their influence over the crisis…Merkel and Sarkozy could be “pushed around” if the markets aren’t happy with the way things are shaping up…the opposite is also true, so we’re sure to see more volatility in the markets…

Italian Premier Mario Monti takes a package of austerity and growth-boosting measures to a skeptical Parliament today…Monti is to brief both Parliament chambers on the package, which includes $27 billion of spending cuts and tax hikes, and $13.5 billion of measures to boost Italy’s anemic growth…it’s hard to see how tax hikes can be helpful when the root of the Italian problem is a government that has grown too big and simply can’t properly manage the money that it does have coming in…

The escalating sovereign debt crisis has already pushed the euro zone economy into a contraction that could be far worse than economists had expected, business surveys suggested this morning…Markit’s Eurozone Composite Purchasing Managers Index (PMI), which measures changes in business activity across the euro zone, showed the euro zone’s private sector economy contracting for the third month in a row in November…while rising slightly to 47.0 from 46.5 in October, the PMI was still far below the 50 mark that divides growth from contraction and the latest figure was trimmed from a preliminary reading of 47.2…survey compiler Markit said November’s composite PMI put the euro zone on course for a 0.6% economic contraction in the fourth quarter – worse than any forecast from more than 30 economists polled by Reuters last month…in addition, consumer confidence fell across the single currency area to a 27-month low in November, consumer purchasing power fell and there was evidence that labor markets in most countries have recently taken a serious turn for the worse…

Editor’s note…we are now endeavoring to post Morning Musings consistently by approximately 30 minutes prior to the opening of the equity markets Monday through Friday, which means by 6:00 am Pacific or 9:00 am Eastern…