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Another volatile day in the Gold market following bullion’s steepest 1-day slide in over a year yesterday…Gold rebounded as high as $1,225 overnight before retreating back to $1,190 …as of 8:15 am Pacific, Gold is up $2 an ounce at $1,196…Silver, after surging above $16.50, is now down 35 cents at $15.84...Copper is off 4 pennies at $2.90…Crude Oil is trying to rebound, now down just slightly at $55.85…the U.S. Dollar Index, meanwhile, has fallen half a point to 87.98…

Investors are waiting to see if the Fed’s final meeting of 2014 today and tomorrow results in a more hawkish tone…a Janet Yellen press conference will immediately follow tomorrow’s statement and forecasts…Wall Street is looking for lower inflation and stronger growth from the plunge in Oil prices but the latest CNBC Fed Survey shows it still sees the Federal Reserve on track to raise interest rates by next summer for the first time in 8 years…

Plunging Oil prices could heighten geopolitical tensions, trigger defaults by U.S. shale Oil and gas firms and destabilize euro zone inflation expectations, the Bank of England warned today…

Gold imports in top consumer India officially reached 151.6 tonnes in November, according to data provided by India’s trade ministry today, a whopping 38% increase from 109.6 tonnes in October…the value of November’s imports was $5.61 billion, a 6-fold increase from the $836 million recorded for the same month a year ago…keep in mind that from a current account deficit point of view, the rise in Gold imports in India is being offset by much lower Oil prices as India is a big importer of Crude…

Oil Update

Almost $1 trillion of spending on future Oil projects is at risk given the brutal plunge in Crude prices, according to Goldman Sachs…any cancellation of these developments would deprive the world of 7.5 million barrels a day of new output over the coming decade, or 8% of current global Oil demand…the findings suggest the supply glut that has sent prices tumbling could eventually vanish as the Oil majors delay big-ticket production projects…

Goldman examined 400 oil and gas fields around the world, many of which are still awaiting a final investment decision…its analysis, based on a $70 Brent Oil price, shows that fields representing 2.3 million b/d of output by 2020 and awaiting a green light have now become uneconomic…that figure rises to 7.5 million b/d of production by 2025…the analysis excluded U.S. shale…

Russian Roulette

Russia doesn’t so much have an economy as it has an Oil-exporting business that subsidizes everything else, so the Russian bear is trapped in a corner…how dangerous of a situation could that be, especially when there’s some evil mixed in with Vladimir Putin?…we’re about to find out…

There was no letup in the selling pressure on the Russian ruble overnight despite a steep emergency increase in Russian interest rates…if you think the Venture is having its problems, take a look below at The Wall Street Journal’s inverted chart for the ruble which has essentially fallen off the cliff…

The Central Bank of Russia unexpectedly hiked rates by 650 basis points to 17% overnight after the beleaguered ruble plunged to a fresh record low….the currency initially rebounded to 60.0 to the U.S. dollar following the move but then collapsed to a fresh all-time low…the rate hike will further tighten domestic liquidity, putting a strain on the domestic corporate sector and reinforcing economic weakness…the central bank, according to its First Deputy Governor Sergei Shvetsov, will implement more measures to stabilize domestic markets following the rate hike…Shvetsov called the situation on the Russian foreign exchange and stock markets “critical”…

Today’s Equity Markets

Asia

China’s Shanghai Composite surged past the 3000 level overnight, gaining 68 points or 2.3%…financials did well along with infrastructure plays on news of fresh supportive measures from authorities…Beijing approved infrastructure projects worth $31 billion, which includes a third airport in the capital and 5 roads in the southern and central region…

The flash HSBC/Markit China manufacturing PMI slipped to 49.5 from a final reading of 50 in November, contracting for the first time in 7 months and raising expectations for additional stimulus measures…

Japan’s Nikkei average fell below the 17,000 level to end the day at a 5-week low, down 344 points or 2%, on the back of a stronger yen…

Europe

European markets are up significantly in late trading overseas…activity in Germany’s private sector grew at the weakest pace in 18 months in December, with the PMI falling to 51.4 from 51.7 in November…France’s private sector also continued to decline, albeit at a less sharp pace…

Data firm Markit today said its composite euro zone PMI, a measure of activity in the manufacturing and services sectors, rose to 51.7 in December from 51.1 in November…however, preliminary results from Markit’s survey of 5,000 manufacturers and service providers also showed that a significant pickup in activity is unlikely in the coming months, with new orders up only marginally following November’s decline…

North America

The Dow has reversed earlier losses and is up 88 points as of 8:15 am Pacific…new home construction in the U.S. topped a million on an annualized rate in November, in line with expectations, while housing starts fell 1.6% and building permits declined 5.2% last month…

The TSX has jumped 267 points as of 8:15 am Pacific while the Venture, which has declined in 14 out of the past 16 sessions, is off 4 more points at 640…an important bottom could be forming in the low 600’s according to Fib. analysis…more on that as the week progresses…

Spain’s Repsol has agreed to buy Talisman Energy (TLM, TSX), Canada’s fifth-largest independent Oil producer, for $13 billion, showing how the drop in Oil prices is pushing energy companies to take the plunge on big M&A deals…

U.S. Dollar Index Chart Update

The U.S. Dollar Index staged an important breakout over the summer, and momentum has carried it to levels not seen since early 2009…strong new support exists in the mid-to-upper 80’s…near-term resistance begins at 89…ultimately, over the next year or 2, it’s conceivable the Dollar Index will test the long-term downtrend line which will provide very stiff resistance in the high 90’s…

Interestingly, RSI(14) is at its third-highest level (71%) on this monthly chart since the mid-1980’s…

Volatility Index (VIX) Chart Update

The Volatility Index, known as the “VIX”, hasn’t been so volatile in recent years, climbing above 25 on just 2 occasions since the beginning of 2012…that trend may soon change as we could be entering a period of greater volatility across a broad spectrum of markets…

Stocks are relatively safe when the VIX remains below 25…

Richmont Mines (RIC, TSX) Update

Richmont Mines (RIC, TSX) has more than tripled since this time last year…this price momentum, which in itself encourages interest, is being driven by solid fundamentals including robust earnings and the discovery of a 1 million ounce high-grade resource underneath existing workings at the company’s Island Gold Mine in northern Ontario…

Any pullbacks in Richmont in recent months have represented outstanding buying opportunities, and the drop from a high of $4 last Wednesday to current levels should be no different…

This 4-year weekly chart shows steady buy pressure and 2 key Fib. support levels, $3.48 and $3.01, with the rising 50-day moving average (SMA) just above the lower Fib. level…the next Fib. measured resistance, meanwhile, is at $5…

NioCorp Developments Ltd. (NB, TSX-V) Update

NioCorp Developments (NB, TSX-V) was one of the biggest movers on the Venture yesterday, gaining 11 cents to finish at 81 cents…the company announced it has entered into an off-take agreement with ThyssenKrupp Metallurgical Products GmbH whereby ThyssenKrupp will purchase approximately 3,750 tonnes or roughly 50% of NioCorp’s planned ferro-niobium production from its Elk Creek deposit for an initial 10-year term, with an option to extend beyond that time frame…the agreement presupposes the company obtaining project financing, obtaining all necessary approvals and constructing a mine at Elk Creek…

The breakout above Fib. resistance at 79 cents yesterday requires confirmation today…as of 8:15 am Pacific, NB is down 4 cents at 77 cents…this 9-month weekly chart shows strong RSI(14) up momentum and increasing buy pressure, so NB could be gearing up for an impressive finish to the year…

Focus Graphite Inc. (FMS, TSX-V) Update

December bottom-fishers may wish to keep an eye on Focus Graphite (FMS, TSX-V) in the event of any additional weakness before this tax-loss selling period ends…

FMS has shown strong support in the mid-30’s since October, and RSI(14) is currently in the low range and near support on this 1-year weekly chart…

Focus, which recently completed and filed an environmental and social impact assessment (ESIA) for its Lac Knife Graphite Project in northeastern Quebec, has made powerful moves during the last half of December in each of the past 4 years…

Note:  Jon holds a share position in RIC.