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Gold has traded between $1,275 and $1,295 so far today…as of 8:30 am Pacific, bullion is up $12 an ounce at $1,292…Silver is 14 cents higher at $17.92…Copper is up 1 penny at $2.57…Crude Oil has shed $1.89 a barrel to $46.80…over the weekend, J.P. Morgan became the latest bank to slash its forecast for Oil prices this year…the bank cut its average Brent Crude price forecast for 2015 to $49 a barrel from $82, saying that Oil prices could trough in March at an average of $38 a barrel…the U.S. Dollar Index (see updated charts below) is up one-quarter of a point at 92.89…

Gold is trading at a 5.5-month high as uncertainty about Europe continues…nervous financial markets are focused on Thursday’s ECB meeting, at which the bank is widely expected to unveil a sovereign bond buying program, and a Greek election on Sunday, which polls suggest anti-bailout, far-left party Syriza will win…since the Swiss National Bank’s announcement last Thursday, when it lifted the cap on the franc vs. the euro, both Gold and Silver have reconnected with ETP investors…

A Reuters poll of money market traders regarding the ECB announcement later this week found the median expectation was for a package worth 600 billion euros, though most also felt that would not be enough to bring inflation up to target…indeed, many in the market would prefer an initial target of at least 1 trillion euros or, even better, an open-ended commitment to buy as much as necessary to get inflation higher…

China Growth Slows In 2014

China’s economic growth slowed to 7.4% in 2014 – not quite as bad as some analysts had feared – but it nonetheless represents a downshift to a level not seen in a quarter century…the slipping momentum in China, which reported economic growth of 7.7% in 2013, has reverberated around the world, sending prices for commodities tumbling and weakening an already soft global economy…

China’s economy grew 7.3% in the fourth quarter from a year earlier (slightly higher than expected), the National Bureau of Statistics said, buttressed by targeted moves to ease borrowing…but it continued to face a housing glut, soaring debt and overcapacity in many industries, factors likely to erode growth in 2015…

IMF Cuts Global Growth Outlook

The IMF has made the steepest cut to its global growth outlook in 3 years…expectations are diminished almost everywhere except the U.S., more than offsetting the boost to expansion from lower Oil prices…

The world economy will grow 3.5% in 2015, down from the 3.8% pace projected in October, the IMF stated in its quarterly global outlook released late yesterday…the Washington-based lender also cut its estimate for growth next year to 3.7% compared with 4% in October…

The United States was the only major economy for which the IMF raised growth projections…it downgraded its forecast for Canada’s economy, cutting growth estimates for 2015 by 0.1% to 2.3%, and for 2016 by 0.3% to 2.1%…Oil prices, which have retreated by more than 50% since last September, were cited by the IMF as the most important factor currently shaping its outlook…

“Global growth will receive a boost from lower Oil prices, which reflect to an important extent higher supply. But this boost is projected to be more than offset by negative factors,” the IMF concluded. 

U.S. Dollar Index Updated Chart

Gold continues to advance despite continuing strength in the U.S. Dollar Index…the next key test for the Dollar Index is the 93 level which is Fib. resistance…

The Dollar Index has been on fire since the early summer of last year…the widest gap yet has also opened up between the current Index level and its 50-day SMA, so that does raise the risk of a near-term pullback to ease temporarily overbought conditions…

If the Dollar Index retreats, will Gold shoot even higher or drop in tandem with the greenback?…it’ll be fascinating to see where both bullion and the dollar close on Friday…

U.S. Dollar Index Long-Term Chart

Ultimately, the Dollar Index should test resistance in the mid-to-upper 90’s at the long-term downtrend line on this 34-year monthly chart…in a relative sense, Gold appears to have more upside potential than the greenback and may indeed emerge as the “ultimate” currency in the years ahead…

The Dollar Index is in an RSI(14) “danger zone” at the same time as it attempts to battle its way out of a long-term overall downtrend that started in the mid-1980’s…

Today’s Equity Markets

Asia

China’s Shanghai Composite Index rose 1.8% to 3173 overnight, bouncing back from its biggest drop in 6 years yesterday after regulators clamped down on margin trading which was one of the drivers of the market’s 53% rally last year…

Japan’s Nikkei surged 352 points higher, or 2%, to close at 17366…

Europe

European markets were generally modestly higher today…Reuters reported that Germany’s chancellor made a rare public intervention in the debate about money printing by the ECB yesterday, warning it was no substitute for economic reforms in the euro zone…

North America

U.S. markets are lower after yesterday’s Martin Luther King holiday…as of 8:30 am Pacific, the Dow is down 106 points…President Obama, true to form, will deliver another poke in the eye to Republicans tonight as he’s expected to unveil a plan for billions of dollars in tax increases and higher government spending in his State of the Union address…

In Toronto, the TSX is up 7 points, thanks to strength in Gold stocks, while the Venture has added 5 points to 678…technically, a close above 675 would be bullish for the Venture…

Castle Mountain Mining Company Ltd. (CMM, TSX-V) Update 

Castle Mountain Mining (CMM, TSX-V) reported a whopper of an intersection yesterday – 33.3 m grading 30.31 g/t Au, including 10.6 @ 94.04 g/t Au (from 101.4 to 134.7 m), in drill hole CMM-054 from Phase 2 drilling at its Castle Mountain mine in San Bernardino County…importantly, the hole was drilled in a previously untested area of the project…

The company stated that results from the campaign appear to have significantly expanded the un-mined, very-high-grade Lucky John zone along strike, and discovered a possible high-grade extension at depth…CMM is planning a follow-up drill program in an effort to build upon these results and the property’s existing resource…

Castle Mountain is a past producing heap leach Gold mine permitted for production…the most recent NI-43-101 resource estimate (November 2013) showed the property has over 4 million ounces of indicated and inferred resources, including a high-grade core of 2.5 million ounces (indicated) @ 0.94 g/t Au and 830,000 ounces (inferred), also @ 0.94 g/t Au…

The Preliminary Economic Assessment released in April of last year gave a base case of 176,000 ounces per year over 17+ years with a post-tax NPV of $352 million and an IRR of 20.1%, assuming an average Gold price of $1,300 (U.S.)…the company had over $6 million in its treasury at the end of September as it continues to work on a feasibility study for Castle Mountain…

CMM 2-Year Weekly Chart

CMM broke out strongly above its EMA(20) on this 2-year weekly chart yesterday, with the EMA(20) also reversing to the upside…the last time this EMA reversed higher, in the summer of 2013, CMM shot up from the mid-30’s to over $1 per share by early 2014…

A bullish crossover has occurred in the ADX indicator, so yesterday’s surge on significant news appears to mark the start of a new bullish trend…

CMM has pulled back slightly in a healthy retreat in early trading today, off 3 pennies at 47 cents, but this has potential to power higher in a hurry based on the current technical posture…

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

Doubleview Capital (DBV, TSX-V) appears to have drilled its best hole yet at the Hat Property in the Sheslay district, based on yesterday’s partial assay results from the first 220 m of HAT-23, and visual analysis of the rest of the core…the hole was drilled to a length of 650 m and then halted to allow crews to head home for Christmas…DBV expects to reactivate the camp in the near future, and it’s possible HAT-23 could be extended even deeper…

DBV hit a Gold-enriched section with strong Copper values as well beginning at a depth of 190.6 m…the question is, do the grades get even better beyond 220 m as the visuals suggest they might?…

So far, investors are taking a wait-and-see attitude but speculation could certainly build in the days ahead…technically, DBV has moved above its 50-day moving average (SMA) but key Fib. resistance is at 16 cents…

The chart holds some promise with a bullish “W” in the RSI(14) and steady accumulation since October as demonstrated by the ADX indicator, but DBV will need a surge in volume to gain traction…

Kaminak Gold Corp. (KAM, TSX-V) Update

Kaminak Gold reported infill drilling results this morning from Double Double, the highest grade of 4 Gold deposits being evaluated as a part of a continuing feasibility study at its Coffee Project in the Yukon…6,850 m of infill drilling from 47 holes was completed at Double Double in 2014 with the objective of verifying and upgrading the open-pit resources defined in the 2014 PEA from inferred to indicated…

Results at Double Double were highlighted by 6.10 m grading 32.78 g/t Au in drill hole 731 (from 39.62 to 45.72 m) while hole 393 returned 5 m grading 37.6 g/t Au (from 176 to 181 m)…true width is estimated at approximately two-thirds downhole length…

Kaminak is targeting the completion of its Coffee feasibility study by late 2015/early 2016…drilling this year will comprise continuing resource delineation infill, condemnation drilling of areas containing proposed mine infrastructure, and geotechnical and hydrological drilling…environmental and heritage baseline studies, and engineering studies into the optimal route and design of the access road, are also advancing as planned…all metallurgical sampling was completed in 2014, and composites are now at a lab undergoing leaching and other test work…

Technically, there have been numerous occasions since the spring of 2013 when Kaminak has attempted to breakout above the “neckline” as shown in this 2.5-year weekly chart…as a result, if and when that breakout does occur, it will be that much more significant…

KAM is giving it a try once again this week…as of 8:30 am, KAM is up 8 cents at $1.05…

Note:  John and Jon both hold share positions in DBV.  Jon also holds a share position in CMM.