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Bullion is showing impressive resilience this morning after dipping as low as $1,145…today’s action is particularly curious given the early strength in the U.S. Dollar Index…as of 8:15 am Pacific, Gold is up $11 an ounce at $1,173…it got as high as resistance at $1,180 (important if bullion were to close above that today)…a significant intra-day reversal in Silver – it fell as low as $15.20 overnight but is now up 17 cents at $15.83…Copper has gained 3 pennies to $3.07…Crude Oil, now trading within a long-term support band between $70 and $75, is up 60 cents at $74.81…meanwhile, the U.S. Dollar Index surged briefly above 88.20 this morning but has since backed off to 87.87, still a slight advance over yesterday…however, the 88 area represents important Fib. resistance…recently, including today of course, buying has been coming into Gold each time the Dollar Index has attempted to gain traction above 88…it’s possible we could be seeing a temporary “topping out” of the Dollar Index around 88 which would have immediate bullish implications for precious metals, the Venture and the beleaguered commodity sector in general…

Some “bottom picking” appears to be occurring in Gold and should help support prices longer term, according to HSBC…the bank, in a late-Thursday research note, recounts some of the highlights from yesterday’s World Gold Council’s quarterly demands trends report, pointing out that the bullion market’s third quarter surplus of 111 metric tons was down f“While the report does not hold immediate implications for near-term Gold prices, we believe it is supportive longer term,” HSBC stated.

Reuters reported this morning that a dramatic fall in the price of Oil in recent months shows no signs of ending, according to the International Energy Agency (IEA), which states that weak demand, a strong dollar and booming U.S. Oil production mean that a new chapter in the history of the Oil markets is beginning which could affect the social stability of some countries.  “Supply/demand balances suggest that the price rout has yet to run its course,” the IEA said in its new monthly report, released this morning. “Our supply and demand forecasts indicate that barring any new supply disruption, downward price pressures could build further in the first half of 2015.”

Prices have declined by around 30% since peaking in June, a major factor in the Venture’s slide, with Brent Crude now trading at a 4-year low under $80 a barrel…speculators are looking ahead to a meeting in Vienna later this month where the OPEC could look to cut production in the wake of slumping prices, but don’t hold your breath – discord among members of OPEC is likely to get in the way of a coordinated effort to reign in production…

Today’s Equity Markets

Asia

Asian markets were mixed overnight…China’s Shanghai Composite fell 6 points to close the week at 2479…the Shanghai-Hong Kong bourse linkup (Stock Connect) launches Monday…

Japan’s Nikkei average gained 98 points to finish at 17491…Japan’s GDP for the third quarter is due Monday…

Europe

European markets are mixed in late trading overseas…

While the euro zone economy expanded at a slightly better than expected rate last quarter, deep concerns persist that the region is stuck in rut of declining investment and high unemployment at a time when other large economies such as the U.S. and U.K. are seeing more vigorous and jobs-rich recoveries (though not robust)…

In a reversal of recent trends, it was countries hit hardest by the bloc’s debt crisis that led the pack last quarter in figures released this morning…how ironic – Greece’s economy posted the fastest growth rate in the euro zone, while Spain recorded solid expansion, too…but Germany and France are the ones who have to do the heavy lifting to drive the entire $12 trillion (U.S.) euro zone economy forward, and those two dominant economies emerged from second quarter contractions with only weak growth…Italy’s economy shrank…

Overall GDP in the 18-member euro zone grew 0.6% last quarter on an annualized basis, Eurostat reported today…GDP grew 0.2% on a quarterly basis…the figures were slightly better than expected, but still left GDP about 2% below its pre-crisis peak in 2008…

North America

The Dow is down 8 points as of 8:15 am Pacific…

U.S. retailers reported strong sales in October, a sign American consumers were spending with more gusto and could help keep the economy growing at a brisk pace…U.S. retail sales rose 0.5% last month when stripping out volatile elements like gasoline, autos, building materials and food services, according to the Commerce Department data released this morning…that was the biggest increase since August and just above analysts’ expectations of a 0.4% gain…lower gas prices are like an instant tax cut and this should help fuel consumer spending through the key holiday season…equity markets will like as consumer spending accounts for more than two-thirds of U.S. GDP…

Also bullish this morning was the just-released Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment for this month which came in at 89.4, the highest reading since July 2007…this was above the median forecast of 87.5 among economists polled by Reuters…

The TSX is off 20 points while the Venture is unchanged at 765…watch for the possibility of a Venture close above resistance at 770 today – such a development would clearly be bullish…

Fission Uranium Corp. (FCU, TSX) Update

This is the second chart update this week on Fission Uranium (FCU, TSX) because the technical pattern is so interesting, and a continued firming up of Uranium prices is quite possible going into 2015…Fission has a world-class, near-surface high-grade deposit at Patterson Lake South, and another strong batch of assays are expected prior to year-end that will contribute to a NI-43-101 maiden resource estimate…Fission has been primed to be swallowed up by a bigger fish in the sector, and such an event could easily occur anytime next year…

Technically, you can see how Fission broke out above a downtrend line at the beginning of this week…it climbed as high as $1.06 Tuesday where it met some resistance as expected…we’re now seeing some consolidation which is healthy, and the circled area in blue is the “sweet spot” – Fib. support and/or the top of the downtrend line should hold before FCU turns higher again…textbook TA in this particular case – doesn’t always work out but often it does…as always, perform your own due diligence…

FCU is off a penny at 92 cents as of 8:15 am Pacific…

TSX 6-Year Monthly Chart

Below is a 6-year monthly chart that gives some encouragement with regard to the state of the TSX…October and November candles demonstrate that chart support around 14200 is exceptionally strong…at the moment, the Index is fighting to climb back above its still-rising 200-day moving average (SMA), currently just above 14800…

The overbought RSI(14) condition that persisted for more than a year on this monthly chart to mid-September has quickly unwound and may have found support at the 50% level…

TSX Gold Index Update 

Have Gold stocks found a bottom?…the extreme bearish sentiment that exists in the sector is 1 favorable indicator, but there’s no crystal ball out there that’s telling anyone if we’ve seen a “final capitulation” yet…one thing we’re quite certain about, though – at some point in the not-too-distant future, whether that’s a month from now or a year or more down the road, buyers of quality Gold companies (producers and explorers) in the current environment may very well see exponential growth in their investments…the next run is going to be huge, for a variety of reasons, so identifying (and getting positioned in) the right companies now is critical…

What’s interesting about this long-term monthly TSX Gold Index chart is the positive RSI(14) divergence with price…in fact, an upsloping trend has developed in the RSI recently while the Index fell to a 13-year low…that has to be considered bullish…strong support at 135 is holding – we saw that again this morning as the Index rebounded strongly from an intra-day low of 136…as of 8:15 am Pacific, the Gold Index is up 2 points at 142…

Is there a chance of a very strong finish to the year for Gold stocks?…absolutely…

Richmont Mines (RIC, TSX) Update

One of our favorite producers at the moment continues to be Richmont Mines (RIC, TSX) which last week reported adjusted Q3 2014 net earnings of $4.6 million CDN or 10 cents per share vs. an adjusted net loss of $1.1 million in Q3 2013…9–month adjusted net earnings for 2014 now total $8.3 million, or 19 cents per share, compared to an adjusted net loss of $4.5 million or 11 cents per share in the prior year period…this is a company that has fundamentally really turned the corner this year, and we see a great future for Richmont given how its high-grade Island Gold Mine could truly be transformational for the company…RIC is also benefiting from a lower Canadian dollar; weak Oil prices will also benefit the bottom line…

Richmont reported Gold sales of 24,635 ounces in Q3 2014, at an average price of $1,386 CDN, represented a 60% increase over prior year Gold sales of 15,438 ounces at an average price of $1,367 CDN…

The company had cash and cash equivalents of nearly $40 million as of September 30 and long-term debt remains low at $5.8 million…

Richmont, which experienced a more than 10-fold increase in its share price between late 2008 and the fall of 2011, slumped all the way back down to a bargain basement price of $1 per share late last year…it started to reverse course with a vengeance after 2 important events this year – 1) The release April 1 of an updated resource calculation for its producing Island Gold Mine, including the Island Deep extension; and 2) The company’s return to profitability in Q2 of this year as it reported record revenues and net earnings of $4.7 million (10 cents per share) for the April-May-June period…

Recently, Richmont raised production guidance for 2014 to 85,000 to 90,000 ounces…importantly, they’re well-positioned to “seize the moment” with development of the Island Gold deep discovery which has NI-43-101 indicated resources of 456,000 ounces grading 11.52 g/t Au and inferred resources of 3.2 million tonnes grading 9.29 g/t Au…the discovery remains open in all directions after 100,000 meters of underground drilling in 2013…preparations are under way for mining of the first stopes in the lower resource, expected at the end this year…

RIC is off 4 cents at $2.76 as of 8:15 am Pacific…resistance at $3 as you can see in this 4-year weekly chart but measured Fib. resistance after that is $3.48 and $5.02…

Integra Gold Corp. (ICG, TSX-V) Update

Integra Gold Corp. (ICG, TSX-V) got some good news as reported yesterday – the Canadian Environmental Assessment Agency has informed ICG that the company will not be required to file a federal environmental assessment, also known as an environmental impact study, for the combined Sigma-Lamaque mine and mill complex and the Lamaque South project in Val d’Or, Quebec…this will speed up the development time…

The company is in the final stages of completing an updated preliminary economic assessment…the PEA update will be followed by an updated NI-43-101 resource estimate which will include 40,000 meters of new drilling…

ICG is unchanged at 18 cents as of 8:15 am Pacific…this 2+ year weekly chart shows a strong support base between 15 and 17 cents…

Note:  John, Terry and Jon do not hold share positions in FCU, RIC and ICG.