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Gold has traded between $1,226 and $1,236 so far today, ahead of this morning’s Fed policy decision…as of 8:00 am Pacific, bullion is off $1 an ounce at $1,231…Silver and Copper are also both flat at $15.25 and $2.25, respectively…Crude Oil has surged $1.31 a barrel to $37.65 while the U.S. Dollar Index has jumped more than a third of a point to 97.00…if Janet Yellen and the Fed really wanted to, they could do some serious technical damage to the greenback today (surely they consider these things?) in order to create more leeway in terms of raising interest rates later this year…

The world’s largest Gold-backed exchange-traded fund, SPDR Gold Shares, said its holdings rose 2.1 tonnes yesterday after the fund reported its biggest 1-day outflow since early December on Monday…

Gold declined for a 3rd straight session yesterday as longs took some money off the table ahead of today’s Fed decision…this had more to do with profit taking and paring of exposure than a trend reversal, in our view…Gold’s support band between $1,200 and $1,220 is exceptionally strong and could certainly be tested today with some knee-jerk selling if the Fed’s message leans heavily on the hawkish side…policymakers are widely expected to leave short-term interest rates unchanged while also signaling that another rate hike is not too far off as long as the job market and the inflation outlook continue to improve…February CPI numbers, released this morning, increased more than expected…

Oil Update

Oil prices firmed today on an announcement that producers will meet next month in Qatar to discuss a proposal to freeze output and on growing signs of a decline in U.S. Crude production…producers both from and outside OPEC will hold talks in the capital Doha on April 17, Qatari Oil minister Mohammed Bin Saleh Al-Sada said…around 15 OPEC and non-OPEC producers, accounting for about 73% of global Oil output, support the initiative, the minister said in a statement…

Standard Chartered said supply concerns due to non-OPEC production cuts could drive prices above $60 a barrel by the end of the year.  “We think that in coming months supply-side concerns will dominate, particularly when global inventories start to fall, which we think will happen in the 3rd quarter,” the bank said in a note…

Investors are digested data just released from the U.S. Energy Information Administration which showed an inventory build of 1.3 million barrels in the U.S. last week, below the expected 3.4 million build…

WTIC 6-Month Daily Chart

The current bullish trend in WTIC continues despite the pullback in prices the last couple of trading sessions…technically, a classic pattern has emerged as Crude gained momentum after pushing above a downtrend line…it then retraced back to that downtrend line yesterday, just like it did in late February after it broke out above a shorter-term downtrend line…providing additional support now is the rising 50-day moving average (SMA), currently $32.52…we’re still expecting WTIC to a take a run in the coming weeks at its 200-day SMA, currently just above $43…

China Watch

Chinese Premier Li Keqiang said it would be “impossible” for China to fall short in meeting its relatively high economic growth targets even as it pushes ahead with structural reforms (of course it would be “impossible” as the communist country’s numbers are likely rigged)…speaking to reporters at the conclusion of China’s annual legislative session, Li said China won’t suffer a hard landing or sharp downturn, and can achieve growth and reform simultaneously (they can’t implement a proper circuit breaker system for their stock markets, but they can magically balance growth and reform)…

“Reform and development aren’t contradictory,” Li said. “We should be able to stimulate market vitality and support economic development via structural reforms.”

At the opening of the National People’s Congress earlier this month, China set growth targets of 6.5% to 7% for this year and an average benchmark of at least 6.5% from now until 2020…economists say this relatively high growth target at a time when the economy is losing momentum suggests China is favoring growth over structural reform, which could prevent massive job losses and social instability but set back the shift of China’s economy from investment and manufacturing to consumption and services…

Canada Suddenly $30 Billion In The Hole

No surprise – the Financial Post, citing government sources, reported this morning that Prime Minister Justin Trudeau will post a deficit of about $30 billion in his first budget next Tuesday…this of course would be triple what the Liberal leader promised during last fall’s election campaign, but of course deficits and debt meant nothing to Trudeau’s father when he was Prime Minister in the 1970’s…they mean nothing to the current PM either, obviously…Pierre Trudeau’s energy policies also inflicted severe pain on Western Canada, and we’re seeing a repeat of that too with Justin Trudeau’s fanaticism over climate change and what amounts to a second disastrous National Energy Program…few Canadians noticed that in the large entourage the new PM brought with him to the “show” with Obama in Washington last week, Canada’s Minister of Natural Resources was strangely absent…he was told to stay home…that spoke volumes about Trudeau’s economic vision of this country which has the unwavering support of the lefties at the CBC…

In today’s Morning vMusings…

1.  Where is Copper headed?…

2.  TSX Gold Index update ahead of today’s Fed meeting…

3.  The importance of the Venture’s relative performance vs. the broader equity markets…

Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…