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Gold has traded between $1,240 and $1,254 so far today…as of 9:30 am Pacific, bullion is down $10 an ounce at $1,246…Silver is up 2 cents at $16.21…Copper has added a penny to $2.18…Crude Oil has slid 29 cents to $41.88 while the U.S. Dollar Index has rallied two-thirds of a point half to 94.73…

U.S. retail sales unexpectedly fell in March as households cut back on purchases of automobiles, further evidence that economic growth stumbled in Q1….the Commerce Department reported this morning that retail sales declined 0.3% last month after being unchanged in February…economists polled by Reuters had forecast retail sales edging up 0.1% last month…

Meanwhile, despite a rise in energy prices, U.S. pipeline inflation remains subdued, adding to the weakness seen in February, according to the latest data from the Bureau of Labor Statistics…the department said its Producer Price Index fell 0.1% in March, compared to February’s fall of 0.2%…consensus forecasts were calling for a rise of 0.3%…on an annual basis, producer prices were down 0.1%…

Five out of 8 of the biggest U.S. banks do not have credible plans for winding down operations during a crisis without the help of public money, federal regulators said this morning, adding that the institutions could face stricter oversight if they do not fix their plans…the “living wills” that the Federal Reserve and Federal Deposit Insurance Corporation jointly agreed were not credible came from Bank of America, Bank of New York Mellon, JPMorgan Chase, State Street and Wells Fargo…

Oil Update

Oil futures are off modestly today on concerns among some traders that a producer meeting, planned for Sunday in Doha to discuss freezing output, will do little to trim oversupply…comments by Saudi Oil minister Ali al-Naimi in the al-Hayat newspaper in which he confirmed his country’s position that an outright production cut was out of the question has also affected sentiment today…however, Morgan Stanley said the market may still be underestimating the potential near-term headline upside risk of the Sunday meeting…

“A deal not only seems likely – as leaks and prior announcements have suggested – but confirmation of the deal, greater clarity about the freeze or hints of further OPEC action could reinforce the bullish sentiment,” the bank said today…

An agreement Sunday that extends the rally in Oil prices may also encourage new supply from nimble U.S. shale drillers, which in turn would pressure back on Crude…that’s why Goldman Sachs, in a report Monday, said that “any resolute agreement that would support prices from current levels would prove self-defeating.”

Canadian Dollar Update

The breakout in the Canadian dollar in February coincided with an acceleration of the Venture’s turnaround, so what’s the loonie chart telling us now after a 15% rise from the January low of 68 cents?…just a vigorous rally or something much more significant?…

In late February the dollar wrestled itself out of a long-term downsloping channel, then proceeded to work its way through a band of Fib. resistance between 74 cents and 77 cents…the rising 50-day moving average (SMA), currently 75 cents, should provide very strong support on any pullbacks while the RSI(14) has plenty of room to move higher and could remain very elevated for an extended period…

Significantly, the loonie is now trading above its 300-day SMA for the first time in more than 3 years and that SMA is also flattening out at the Fib. 77-cent level…this sets up a potentially very bullish scenario for later in the year – 4 to 5 months out – when the 300-day actually reverses and begins trending higher as it did in late 2009…there are several technical similarities between now and 7 years ago…

The key takeaway here is that Q1 ushered in a major trend change for the loonie, accompanied by rapidly increasing buy pressure – very different than the sell pressure that dominated even during the 2 rallies that occurred in 2015…

This morning, the Bank of Canada raised its outlook for the Canadian economy while keeping its trendsetting interest rate at 0.5%…the currency is holding steady at 78 cents…

In today’s Morning Musings…

1.  Gold in Canadian dollars – on a path to hit $1,900 by early 2017…

2.  New energy from Pure Energy (PE, TSX-V)…

3.  Updated charts for PGM, PRB and NXE…

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