Gold has traded between $1,109 and $1,126 so far today…as of 9:00 am Pacific, bullion is up $16 an ounce at $1,125…Silver has climbed 20 cents to $15.56…Copper is up 2 pennies at $2.34…Crude Oil is relatively flat at $43.00 while the U.S. Dollar Index continues its technical deterioration…it has plunged more than a full point to 96.05 as China again devalued its currency overnight…forget about a Fed rate hike next month or even this year…

China has sparked another “race to the bottom” in currencies and that certainly has to be considered bullish for Gold…recently we pointed out how the “smart money” commercial traders had dramatically reduced their net short positions to extreme levels in bullion, a hugely bullish sign that the mainstream media totally ignored as it continued to ramp up its bearish narrative…

“The renewed devaluation of the Chinese yuan – the Chinese central bank has once again increased the fixing of the USD/CNY – is lending renewed support to Gold this morning,” Commerzbank stated. “Lower rate-hike expectations are also giving Gold a boost – the probability of the Fed raising interest rates in September having dropped to only around a third, according to the Fed fund future(s). In euro terms, Gold is trading at above the €1,000 per-troy-ounce mark. We believe that the actions of the Chinese central bank could lead to a devaluation race between currencies, especially in the Asian region, which should benefit Gold.”

Send Us Your Video! 

We have many insightful readers who submit their written opinions and ideas regarding the markets every day to our comments’ section…it’s a valuable forum that continues to evolve in a very positive way…thank you for participating!…we also encourage those who may not have posted yet to start doing so – and become part of the growing “BMR Nation“…

We’d also like to hear from you NOW by VIDEO…your piece, your comment (it can even be a short interview), can be serious or it can be funny…it can even have a political angle…the only restrictions are that it must be related to the markets, the length has to be 2 minutes or less, no price targets with regard to a particular stock, and of course keep the language clean…

Talk about something related to the markets that you’re passionate about…maybe it’s your opinion on where Gold is headed…or what China is doing…or what’s good or bad about the Venture…or why you think a particular company has an unusual opportunity…or how you think Canada’s federal election may impact the resource sector…

Whether you’re a small or large investor, whatever your occupation might be – truck driver, retail, geologist, prospector, analyst, broker, a company President or CEO, young or old, from any part of the world – it doesn’t matter…encourage others – including companies you may want to hear from – to make a submission…

Who knows, you may be so good on video, BMR may want to hire you as a regular contributor as we expand our site!…

The possibilities are endless…be imaginative and have fun!…

Keep it simple – use your iPhone or just talk right into your webcam…then send us a video file (.mp4 or .wav) to [email protected] by no later than 9:00 pm (Pacific) Sunday, August 23…our team looks forward to receiving your submission…

There’s no shortage of topics right now to talk about, or even rant about…so let’s get the “Video Volleys” happening!…of course you don’t need to include your last name on the video…

Oil Update  

While slowing demand from China has helped bring down Oil prices at a time of oversupply by big producers in the Middle East, and continued high production from the U.S., Oil demand elsewhere is accelerating according a report from the International Energy Agency (IEA) this morning…the world Oil market had begun to rebalance as low fuel prices have stimulated extra consumption, it said…

“While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhang is expected to persist through 2016 – suggesting global inventories will pile up further,” the Paris-based energy watchdog stated…

World Oil production is running at up to 3 million barrels per day (bpd) above consumption, analysts say, adding to stockpiles in all continents and depressing spot markets for Crude and Oil products such as gasoline and jet fuel…

But sharp price falls are beginning to encourage demand and the IEA forecast world Oil demand would grow by 1.6 million bpd this year, up 200,000 bpd from its previous estimate and “the fastest pace in 5 years“…

Whether that increased demand will be enough to prevent a drop in Crude prices to at least the mid-$30‘s, we’re not sure…the “C” wave down that John was predicting has been in progress since the beginning of last month, and a further plunge into the $30‘s seems much more likely that Crude holding support around current prices and its March low…the worst-case scenario is the $20 level but that would take some extraordinary developments on the global economic stage (within the realm of possibility given the unpredictability of China at the moment)…

Today’s Markets

Asia

Chinese authorities are becoming increasingly desperate as they deal with a slowing economy…China devalued its currency for the 2nd straight day after the central bank pledged yesterday to allow the market to play a greater role in setting the currency’s value…the yuan fell as much as 1.98% today after yesterday’s move to weaken the currency by almost 2%…however, as reported by the Wall Street Journal, the Chinese central bank intervened to prop up in the yuan in the last minutes of trading today in an apparent effort to prevent an excessive fall in the currency…

What China’s game plan for tomorrow?…

The “rescue team” kept the sell-off on the Shanghai Composite to a minimum overnight as the index fell 40 points or 1% to close at 3887…other Asian markets were hit harder…

Europe

European markets were down sharply again today over uneasiness about events in China…there was also a downbeat economic report out of the EU today as euro zone industrial production in June was down 0.4% from May and up 1.2% year-on-year…forecasters had expected only a 0.1% drop in June from May…euro zone GDP data is released Friday…

North America

The Dow is down for the 9th trading session out of 10…it’s off 243 points as of 9:00 am Pacific…in Toronto, the Gold Index is strong today but the TSX is still down 206 points as of 9:00 am Pacific…the Venture has slipped 3 points to 575…

The U.S. has an economic problem on its hands that 1 economist believes is worse than the Great Recession…over the past year, productivity has increased just 0.3% and a mere 0.5% over the past 5 years under the Obama administration, during which the economy has struggled to escape the clutches of the financial crisis and the recession that officially ended in mid-2009…the result has been growth in job creation but little corresponding rise in wages and, subsequently, living standards…

“This topic is still getting almost no attention – particularly among presidential candidates – but there is a case to be made that the stagnation in productivity has been more damaging to the real living standards of Americans than the Great Recession,” stated Paul Ashworth, chief U.S. economist at Capital Economics, in a note to clients. “Productivity growth is the primary driver of gains in real wages.”

Productivity growth comes from sensible fiscal policies, and those have certainly been lacking from Washington…

Gold Stock Rally Underway

One of the 1st clues that a rally in Gold was imminent came at the end of July based on the chart below for DUST, the highly leveraged (3x) Gold miners’ bear ETF that trades on the NYSE…experienced investors can pocket quick, large profits on DUST if they get the entry and exit points roughly correct…

DUST nearly quadrupled in value over a couple of months but it hit strong resistance (RSI-14 and the top of a downsloping channel) at the end of July into the 1st few days of August…that’s when we predicted that a reversal in Gold stocks was likely not far off, if indeed it wasn’t already underway…

This 5-year weekly DUST chart shows how it has a tendency to spike (spring 2013, fall 2014, and again just recently)…that’s certainly the time to take profits…DUST is trading around $24 this morning after hitting a high of $40 intra-day August 5…

HGU 2-Year Weekly Chart

Now we take a look at the double-leveraged bull Gold producers’ ETF, the HGU (TSX)…as we emphasized yesterday, a significant turnaround has started in the TSX Gold Index and you can see how that’s unfolding in this 2-year weekly HGU chart which is now emerging out of extreme oversold conditions…it’s up 37 cents at $4.04 as of 9:00 am Pacific…

Agnico Eagle Mines Ltd. (AEM, TSX) Update

More evidence of an important reversal in Gold stocks – at least the producers at this point – comes from Agnico Eagle Mines (AEM) which has climbed more than $2.50 a share this morning…encouragingly, AEM has made higher lows since late 2013 and RSI(14) has reversed to the upside after recently touching support at 30%…

The last time RSI(14) hit support on this 3-year weekly chart was late 2013…AEM then pushed 70% higher, challenging Fib. resistance at $45 before retracing…

Klondex Mines Ltd. (KDX, TSX) Update

Klondex Mines (KDX, TSX) recently reported record AuEq ounces sold in Q2 (primarily due to higher mill throughput and considerably higher Gold grades) and management also raised its production guidance for 2015 for its high-grade project in Nevada…Canaccord Genuity views Klondex as one of the highest quality intermediate Gold producers in the sector…Q2 financial results are expected later today…

Technically, KDX was due for a pullback in July as John’s charts showed…however, the overall uptrend from 2013 is very well established, and a breakout above the next Fib. measured resistance is very possible as this new uptrend in Gold and Gold stocks continues…

KDX found support within a dime of the Fib. $2.73 level as it unwound temporarily overbought conditions…

KDX is up 2 pennies at $3.41 as of 9:00 am Pacific…

Skeena Resources Ltd. (SKE, TSX-V) Update

We initially brought Skeena Resources (SKE, TSX-V) to our readers’ attention in late June when it was trading at 6.5 cents and preparing to begin a diamond drilling program at its very prospective high-grade Spectrum Gold Property southeast of the Sheslay district…recently, after receiving some attention at a conference in Vancouver, Skeena surged as high as 12.5 cents (chart resistance) before retracing to new support around 8.5 cents…it’s up half a penny at 10 cents as of 9:00 am Pacific…

As of July 20, Skeena had completed 2,200 m of a planned 10,000 to 12,000 m summer drill program (50 to 60 holes) with holes averaging 200 m and varying from 50 to 350 m in depth…the program has been designed to expand the historic resource at the 500 Colour and Central zones, the latter of which includes the QC 1, QC 2, Porphyry 1, and Porphyry 2 structures…other holes will test the East Creek Zone, believed to be a possible extension of the Central Zone, and other outlying targets…a 43–101 resource estimate is anticipated to be completed by the end of the year…this is a property with not only a high-grade Gold system, but strong potential for Cu-Au porphyry deposits as well…

Skeena closed $8.1 million in financings in March, more than originally anticipated, to be directed primarily toward advancing the Spectrum Project…Chairman Ron Netolitzky, of course, was recently inducted into the Canadian Mining Hall of Fame for his 2 past successes in NW B.C. – the Snip and Eskay Creek mines…

In Netolitzky’s own words, “In our business, you make it taking shots”.

Note:  John, Terry and Jon do not hold share positions in any of the above-mentioned situations.