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Gold has traded between $1,241 and $1,250 so far today…as of 8:20 am Pacific, bullion is down $5 an ounce at $1,244…Silver has retreated 32 cents to $17.19…Copper is flat at $3.03…Crude Oil is 53 cents lower at $81.96 while the U.S. Dollar Index has added one-quarter of a point to 85.63…

Gold demand from India picked up significantly ahead of the approaching Diwali festival, analysts and traders have reported…Diwali, the festival of lights observed by the country’s Hindu population, occurs tomorrow and is an auspicious time for buying Gold…India, in turn, is the world’s second-largest Gold buyer behind China.  “Demand in India has noticeably strengthened ahead of this year’s Diwali, especially after Gold prices traded around the year’s lows during the month or so before this key festival,” said Joni Teves, analyst with UBS.  India-related activity was especially strong last week, although abating some since as prices recovered and the holiday approaches, meaning that much of the Diwali-related buying has already taken place…

Barclays on the November 30 referendum on Swiss National Bank Gold reserves (the initiative would prohibit sales of Gold reserves, require Gold to be physically held in Switzerland and require Gold to be 20% of SNB assets):  “The 5-year phase-in would limit volatility, though passage of the initiative likely would raise the long-term equilibrium price for Gold, in our view.” 

ISIS-Inspired Terrorism Hits North America 

Breaking developments out of Ottawa where there has been a terrorist incident at Parliament Hill this morning…many details are still sketchy but multiple gunmen opened fire at Parliament (and nearby buildings, 3 separate shootings apparently), shooting 1 soldier (standing guard at the National War Memorial, now fighting for his life) and spraying an estimated 30 shots inside the government building just 2 days after a terror attack in Quebec shook the nation…one of the gunmen has been killed…Parliament Hill is on lockdown (along with the Canadian Embassy in Washington as a precaution) and a statement, or an address to the nation, is expected at some point today from Prime Minister Stephen Harper who was quickly whisked away from Parliament Hill this morning to an undisclosed location…SWAT teams are active in the Ottawa downtown core, and NORAD has been placed on heightened alert…

A counter-terrorism source told Fox News that there was a spike in Islamic State-related online chatter focusing on Canada in the days leading up to this morning’s attack…in addition, the FBI is asking all field offices to raise their alert posture and reminding them of a recent bulletin urging vigilance in the wake of ISIS chatter calling for attacks on U.S. military and law enforcement personnel…

Yet another example of how much more dangerous the world has become – Monday’s first fatal terrorist attack on Canadian soil, a cowardly act against 2 Canadian soldiers that killed one of them, was carried out in Quebec, involving an Islamic militant and a follower of ISIS…on social media, Martin Rouleau went by the names Ahmad Rouleau and Abu Ibrahim AlCanadi, where he posted comments recently regarding the war in Syria and the rise of the Islamic State…he was described as a convert to Islam, and over the summer attempted to fly to Turkey…the attack came a month after Abu Muhammad Adnani, a spokesman for the ISIS terrorist group, urged followers to kill Canadians, suggesting they single out a victim and “run him over with your car.”  Predictably, Rouleau was declared a “martyr” by ISIS extremists…the National Post reported that a Canadian member of ISIS who goes by Abu Khalid Al Kanadi urged others to “follow the footsteps of our brave brother Martin Rouleau who took revenge for Canadian military aggression in our lands.”  Does Justin Trudeau have a “root causes” explanation here?…our highly capable CF-18’s, which Trudeau made a disgusting phallic joke about recently, can’t get there soon enough to help eradicate this evil…

Gold In Euros

Expressed in euros on this 5-year weekly chart, Gold appears to be on the verge of a potential breakout after appearing to bottom in early January…this will be worth watching closely in the weeks ahead…

Euro Updated Chart

The euro itself has been clobbered since peaking at 140 during Q2…this is a major reason why the U.S. Dollar Index has been so strong which in turn contributed to Gold’s recent sell-off in terms of the greenback (though it has strengthened against the euro)…the euro is trying to emerge out of oversold territory but needs to bust through important resistance (previous strong support) at 128…a breakout above the downtrend line, currently putting pressure on the euro, would be the next major challenge…fundamentally, something needs to change in the euro zone in order for this battered currency to gain traction and reverse its downward spiral…a lower currency, however, carries certain advantages as the Japanese, Canadians and others have discovered…

Today’s Equity Markets

Asia

Japan’s Nikkei average surged nearly 400 points or 2.64% overnight to close at 15196…reports that the European Central Bank is considering buying corporate bonds lifted sentiment…the move would add to covered bond purchases the bank began this week and, some analysts believe, may be a step closer to full-blown quantitative easing…China’s Shanghai Composite fell 13 points to finish at 2326, a 1-month low ahead of HSBC’s flash manufacturing PMI report for September due tomorrow…

Europe

European markets are up modestly in late trading overseas…

North America

The Dow and S&P 500 are both up marginally as of 8:20 am Pacific…U.S. consumer prices rose very slightly in September as energy costs fell broadly, painting a weak inflation picture that should give the Federal Reserve ample room to continue to keep interest rates at historic lows for an extended period…the Labor Department reported this morning that its Consumer Price Index edged up 0.1% last month after declining 0.2% in August…economists polled by Reuters had forecast consumer prices being flat in September…the CPI increased 1.7% in the 12 months through September after a similar rise in August…

S&P 500 Updated Chart

After a nearly 10% correction, the S&P 500 has had a bullish follow-up to last week’s hammer reversal that occurred after an intra-day low of 1821…the fact the index has reclaimed the 1900+ area is encouraging, along with a potential bullish crossover in the SS and an apparent peak in the -DI which is now in decline…RSI(14) is also showing increased up momentum after bouncing off previous support…

The TSX is off 85 points as of 8:20 am Pacific while the Venture is down 3 points at 821…Prosper Gold Corp. (PGX, TSX-V) climbed as high as 9.5 cents and is now up a penny at 8.5 cents after reporting final results from its 2014 drill campaign at the Star Cu-Au Porphyry Project in the Sheslay district…hole S049, drilled in the heart of the Star deposit, returned an impressive 324 m grading 0.44% Cu and 0.22 g/t Au for a CuEq grade of 0.57% including 180 m of 0.71% CuEq from just beneath the collar of the hole to 184 m…the deposit is open for expansion laterally and at depth with higher grades evident in the core of the discovery and going north after this year’s drilling…the Star may ultimately connect with the Star North porphyry target (800 m away) which, disappointingly, has yet to be drill-tested but shows similar geological, geophysical and geochemical signatures…Prosper’s hard work – on multiple fronts, not just on the ground – has just begun…there’s no denying the potential of this project to host a world class discovery…

B.C. Lowers Tax Rate For LNG Sales

British Columbia has lowered its tax rate for liquefied natural gas sales, following extensive negotiations with oil and gas companies like Shell and Petronas, which are looking to site multi-billion-dollar LNG plants in the province…the tax will be set at 3.5% after capital costs are recovered, which is below the “up to” 7% rate announced in a proposed LNG tax framework earlier this year…the rate will rise to 5% in 2037…the lower tax rate – and how LNG proponents appraise it – will be key in determining whether Canada becomes a competitor to the U.S., Australia, Qatar and other jurisdictions looking to supply Asian buyers with the liquefied form of natural gas…there are no less than 13 proposed LNG plants on Canada’s west coast to export gas to Asia, including projects led by Exxon Mobil and Chevron…one Venture company that stands to benefit immensely from this potential LNG boom is Highbank Resources (HBK, TSX-V) with its Swamp Point North aggregate project that’s rapidly moving into the production phase with projected 2015 fiscal revenues of $27 million and an estimated $11 million pretax profit as per the company’s most recent news release…

Cannabix Technologies Inc. (BLO, CSE) Update 

An important step for Cannabix Technologies (BLO, CSE) whose common shares have been made eligible for book-entry delivery and depository services of the Depository Trust Company to facilitate electronic settlement of transfers of its common shares in the United States…DTC eligibility means that a public company’s securities can be deposited through DTC, the largest securities depository in the world which holds over $35-trillion worth of securities on deposit…

Becoming DTC eligible provides Cannabix shareholders various benefits that include reducing the time for stock deposits and withdrawals into brokerage accounts while eliminating the inherent risks associated with the loss and replacement of physical stock certificates…additionally, companies that are approved for DTC electronic transfers often experience higher trading volumes in their stock given the additional accessibility and availability of shares for trading…most large U.S. broker dealers and banks are DTC participants…

Technically, BLO appears to have found a bottom during the overall market mayhem witnessed during the first half of October…buy pressure now appears to be replacing sell pressure…the most aggressive accumulation we’ve seen this month in BLO on the CSE occurred yesterday as the stock climbed as high as 10.5 cents on volume of 643,000 shares…volume has averaged over half a million shares per day since about mid-September as the company inches closer to unveiling its initial Cannabix Marijuana Breathalyzer prototype…

Mission Ready Services Inc. (MRS, TSX-V) Update

Mission Ready Services (MRS, TSX-V) has been a superb performer this month, jumping over 50% on the strength of new contracts and the successful completion of a $4 million financing…the company provides solutions to the global defense, security and first-responder markets in the areas of cleaning, logistics, maintenance, program management and client representation…

Technically, MRS has been climbing an upsloping channel since the beginning of August and confirmed a breakout last week above resistance in the mid-30’s…there’s now new chart support at 36 cents while the nearest measured Fib. resistance is 48 cents which was touched yesterday…

MRS is unchanged at 46 cents as of 8:20 am Pacific…

Crude Oil Updated Chart

While a relief rally seems very probable, Crude Oil is clearly in the tight grips of an overall downtrend that’s not likely to end anytime soon for fundamental and technical factors, barring some sort of unexpected “Black Swan” event that could significantly disrupt supplies…the turning point in WTIC began in July and the downside action accelerated after a breach of important support this month at $90…strong resistance now exists between the mid-$80’s and the $90 level…

The HOD – Looking At Crude In Reverse

This bear ETF shows a major change in the Crude Oil market – in this 7-year monthly chart, note the steadily decreasing sell pressure in the HOD (TSX) since 2011, the breakout above a downsloping wedge this month and the potential for a near-term breakout above long-term RSI(14) resistance just above 50%…this simply doesn’t bode well for Crude Oil prices in the coming months, and those who buy the “dead cat” bounce could get hurt severely…

Note:  John and Jon both hold share positions in BLO.