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Gold has traded between $1,235 and $1,245 so far today to begin the new week…as of 8:15 am Pacific, bullion is up $8 an ounce at $1,241 following a $50 slide last week…Silver is 39 cents higher at $17.07…Copper is up 2 pennies at $2.57…Crude Oil, after its biggest weekly jump in 3 years, is up another $1.50 a barrel to $53.19…OPEC has increased its demand growth forecast for 2015 by 110,000 barrels a day while also reducing its non-OPEC supply growth estimate by 420,000 barrels a day…the U.S. Dollar Index is down one-quarter of a point to 94.42…

Today’s action in Gold is important to see if there’s confirmation of Friday’s breakdown below $1,240 support…a close below $1,240 today would increase the likelihood of a test of the $1,200 area…RSI(14) has broken below an uptrend in place since November on the 6-month daily chart that we posted Saturday…we have another chart this morning that provides additional perspective…

Alan Greenspan, the former chairman of the U.S. Federal Reserve, predicts that Greece will be forced to exit the euro, as its new prime minister outlined plans last night to keep the debt-stricken country financially afloat…in a bleak assessment of Europe’s future, Greenspan, one of the most influential policymakers of modern times, said it was “just a matter of time” before Greece dropped out, triggering the eventual collapse of the single currency…he made his comments just hours before Greek prime minister Alexis Tsipras told parliament he would ask fellow euro zone members in Brussels later this week for an emergency short-term bridging loan, to allow Athens more time to negotiate a new debt deal…the communists are now running Greece – Greenspan will be proven correct…

China’s Big Appetite For Gold In January

Mineweb’s Lawrence Williams (www.mineweb.com), one of the best in the business at analyzing demand/supply trends, noted this morning that China’s SGE Gold withdrawals in the month of January amounted to a staggering 255 tonnes, with last week’s total coming in at 54 tonnes:

“What we do know from the latest SGE figures, which showed that withdrawals from the exchange came to almost 54 tonnes last week, is that supplies to the Chinese market from the exchange in January amounted to a new record for the month – around 4% above last year’s previous January record.  With the Chinese New Year, which is the principal stimulus for the high Gold demand, still two weeks away, SGE withdrawals for the first half of this month are also likely to remain very high, but may fall away thereafter as we saw last year,” Williams wrote. 

“What we have to assume from the above is that Chinese Gold consumption is far, far higher than the estimates supplied by mainstream analysts on which much of the institutionally Gold dominated futures market would appear to depend.  Whether there is a hidden agenda here is the subject of much discussion within the pro-Gold sector, but we suspect that it largely the result of perhaps reliance on independently gathered data and a reluctance to take official statistics at face value.”

Russia-Ukraine Crisis

We’ll see if Gold reacts this week to the continuing escalating crisis in Ukraine, as the Putin regime digs its claws deeper into that country…how will Merkel and Obama respond?…the West could desperately use a Ronald Reagan or a Margaret Thatcher right now…the U.S. and Germany are struggling to maintain a united front against an unflinching Russia ahead of a crucial week of high-stakes, top-level diplomacy on the Ukraine crisis…

Chancellor Angela Merkel has given President Vladimir Putin until Wednesday to agree to a road map to end the fighting in eastern Ukraine (as if he’d adhere to any “agreement”), according to Western officials in news reports this morning…if in her assessment Russian intransigence has blocked a deal, Germany will apparently move to step up European sanctions against Russian companies, possibly including broader asset freezes…separately, the U.S. is considering supplying Ukraine with lethal aid to defend itself (force is all that a thug like Putin understands)…President Obama has held off on a decision until he meets with the German leader this morning at the White House…Chancelor Merkel has publicly opposed weapons deliveries to Ukraine, drawing the ire of U.S. Senator John McCain who has a much more realistic view of the Russian threat…

Gold’s Downsloping Flag 

Below is a 2.5-year weekly chart for Gold that shows a very distinct pattern since early 2013 – consolidation within a downsloping flag…it was in November last year, with Gold trading in the $1,150’s, when John pointed out that bullion would likely find support around $1,130 and then react back up toward the top of the downsloping flag…indeed, that is what has occurred…to gain some powerful momentum, Gold really needs to break above this flag formation and overcome RSI(14) resistance at 60% on this particular chart…

Note how Gold’s drop has found support at the rising 50-day SMA, currently at $1,231 – if this doesn’t hold, then $1,200 will have to…

CRB Index 10-Year Monthly Chart

The bleeding has stopped for now on the CRB Index with Oil pushing back above $50 a barrel…the Index tumbled more than 30% since the end of last June to the recent low, which roughly matches the extent of the Venture’s drop during that same time period…

It’s safe to assume that for now the CRB Index may continue to rally out of extreme oversold conditions, but a test of the 200 level (the 2009 low) certainly can’t be ruled out later this quarter or in Q2…

Today’s Equity Markets

Asia

China’s Shanghai Composite edged higher overnight, climbing 19 points to close at 3095, despite disappointing trade data announced yesterday…exports fell 3.3% from a year ago, while imports tumbled 19.9%, missing analysts’ expectations…

Europe

European markets are down significantly in late trading overseas due to concerns over Greece and Russia…

North America

The Dow is off 63 points as of 8:15 am Pacific…the TSX is up 68 points while the Venture has added 5 points at 698…

Venture 10-Year Monthly Chart

The Venture confirmed a technical breakout last week above 680 resistance, and now the next near-term resistance to overcome is 707…

Below is a longer-term monthly chart that gives hope that the Venture’s 637 low in mid-December won’t be revisited anytime soon…chart support at 680 has been re-established, and note that the -DI indicator hit a peak only previously seen at the 2008 low, and again at the 2013 low that was followed by a recovery into the summer of last year…

A healing process has started…Oil’s direction will be key in determining what kind of momentum the Venture may be able to build in the coming weeks…

TSX 6-Year Monthly Chart

The TSX does have momentum with all indicators showing it’s on track to reach Fib. resistance around 15800 which would be a new all-time high…

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

Spotting crucial technical “turning points” on a chart can make the difference between making just a little bit of money and a lot of money…and when both the technicals and the fundamentals line up, as they have with Cannabix Technologies Inc. (BLO, CSE), the results can be quite remarkable…

Below is another chart that has us excited…NioCorp Developments (NB, TSX-V), which continues to make progress with its high-grade, large tonnage Niobium Project in Elk Creek, Nebraska, has broken out above key resistance as we showed last week…in the fourth quarter of last year, NB unwound an overbought condition that emerged in May…since then, the stock consolidated in a horizontal channel between the low 50’s and the high 70’s until last week’s confirmed breakout…

NioCorp released the final results of its 3-phase 2014 drilling January 19…the infill drilling that was carried out should allow the company to elevate the resource to the measured and indicated category (Niobium has physical and chemical properties similar to those of Tantalum, it’s a rare and a soft transition metal primarily used in the production of high-grade steel such as that used in gas pipelines)…

NB is up a penny at 85 cents as of 8:00 am Pacific…as always, perform your own due diligence…

Silver Short-Term Chart

Like Gold, Silver experienced an unconfirmed breakdown Friday when it closed below $17…it’s trying to claw its way back today…

Silver in December finally staged a definitive breakout above a downtrend line that was in place since the summer on this 9-month daily chart (note how the downtrend line became new support in early December)…

The December 1 dramatic move from an intra-day low of $14.15 to a close above $16 was technically highly significant…as expected, superb support was demonstrated around $15…

The metal climbed as high as $18.50 in January, just a few pennies of the the Fib. 50% resistance level…while doing so, RSI(14) edged into overbought territory but has since unwound to 44% with RSI(14) approaching support…

If Silver can quickly reassert itself above $17, then Friday’s tumble may have simply been a head fake…

Silver Long-Term Chart

This 34-year monthly chart continues to give hope that Silver could be in the very early stages of a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…the reasons for such a move are also not clear…over the past couple of months, Silver jumped by as much as 30% – it led Gold to the upside…

RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15…

One note of concern on this chart is the sell pressure that has prevailed since the beginning of 2013, after a decade-long period of buy pressure…based on historical patterns, sell pressure could persist for a considerable time yet – though that doesn’t necessarily mean that the price can’t still trend higher…nonetheless, it would be encouraging to see this sell pressure begin to abate…

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