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Gold has recovered nearly half of its losses from earlier this week…as of 8:00 am Pacific, the yellow metal is up $15 an ounce at $1,787…it climbed as high as $1,797 this morning…Silver is off 30 cents to $40.82…Copper is unchanged at $4.08 a pound, Crude Oil is down $1 to $84.30 while the U.S. Dollar Index is slightly lower at 74.05…the New York Yankees became the first team in major league history last night to hit three grand slams in one game…today Ben Bernanke didn’t hit a grand slam at Jackson Hole, Wyoming, but at least he didn’t strike out in the eyes of the market…that’s the early consensus…Bernanke said the Federal Reserve stands ready to use additional tools to help the U.S. economy in its weak recovery but he stopped short of explicit talk that another round of monetary easing is forthcoming…citing “a range of tools that could be used to provide additional monetary stimulus,” he said the Fed “will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days instead of one to allow a fuller discussion”…Bernanke walked a fine line today but certainly implied, in our view, that the Fed is positioning itself for some sort of action…just what that could be remains to be seen…Bernanke is in a tough spot which is really no fault of his own…with a President seemingly incapable of providing economic leadership, that role to some extent has fallen on Bernanke’s shoulders…what more can the Fed do?…we’ll see how creative Bernanke and the Fed can get…U.S. corporations have been hoarding cash and many are sitting on record profits…the household savings rate in the U.S. has climbed to more than 5% from zero before the 2008 financial crisis though the cost of borrowing, of course, is at record low levels…households are busy deleveraging…additional stimulus at this point, it seems, needs to come more from fiscal policy than monetary policy, and that’s where there’s a major problem given the political gridlock in Washington and Obama’s shortcomings on economic issues…he doesn’t have an entrepreneurial mindset or a real understanding or appreciation of how wealth is created…Obama is set to make a speech regarding the U.S. jobs and growth deficit immediately after Labour Day which should prove to be very interesting…unfortunately at the moment, there is no obvious potential Republican replacement for Obama in 2012…the U.S. is in dire need of a major structural course change in everything from overall taxation policy to the proper role for government in society…that will come – the only question is when…

The U.S. economy grew much slower than previously thought in the second quarter as business inventories and exports were less robust, a Commerce Department report showed this morning, although consumer spending was revised up…gross domestic product growth rose at annual rate of just 1%, a downward revision of its prior estimate of 1.3%…it also said after-tax corporate profits rose at the fastest pace in a year…economists had expected output growth to be revised down to 1.1%…in the first quarter, the economy advanced only 0.4%…the growth story continues, however, in the emerging markets and investors should not lose sight of the importance of that…

Barclays Capital is forecasting Gold-price averages of $1,725 for the current quarter, $1,875 for the fourth quarter and $1,930 for the first quarter of 2012…investors added 58 tonnes of Gold to the top 25 Gold ETF’s from August 1-19…in the week to Wednesday, however, that reversed with redemptions reaching 56 tonnes as Gold fell $200 an ounce…as John showed in his charts yesterday, we believe Gold is in a consolidation phase for the moment and could decline to just above $1,600 an ounce before likely exploding again to the upside later in the year…this would suggest that equities, after getting pummeled this month, should strengthen over the next several weeks…

For followers of the TSX Venture Exchange (CDNX), it’s important to keep a close watch on the performance of the CRB Index which of course tracks a broad range of commodities…there’s a strong correlation between the CRB Index and the CDNX…during the spring, the CRB Index started a “Wave 4” downtrend that has coincided with the weakness in the CDNX, just like what occurred in a “Wave 2” downtrend in 2010…there is potential for the CRB Index to drop a little more (to the 50% Fibonacci level like 2010 as John points out) but the worst of the “Wave 4” decline certainly appears to be over…there is also the possibility that it has bottomed out already…we’ll let you decide by looking at this important chart…

Volume on the CDNX has slowed to a crawl as August winds down…of course, a lot of investors and brokers are away until after Labour Day and that’s part of the problem…the CDNX is currently off 1 point at 1738…there’s a lot of cash sitting on the sidelines, waiting for a reason to jump back into the equity markets after the losses we’ve seen in August…the seeds of a rally are always planted during times such as this, with so much bearishness and negativity, so the potential of an explosion to the upside in the very near future has to be considered a strong possibility…there are two things investors should be sharply focused on…news of a major discovery which history shows often comes around this time of year, and those companies on the CDNX which have been robust performers over the last couple of months, moving against the trend of the overall market…devote a few hours to researching the top performers recently and you’ll come up with a valuable list of stocks to perform some due diligence on…some of our favorites in this category include Visible Gold Mines (VGD, TSX-V), Silver Quest Resources (SQI, TSX-V), Pacific Ridge Exploration (PEX, TSX-V), Currie Rose Resources (CUI, TSX-V), Adventure Gold (AGE, TSX-V), Spanish Mountain Gold (SPA, TSX-V) and Galway Resources (GWY, TSX-V), among others which we’ll mention in the days ahead…the companies that have generally out-performed the overall market in recent months can be expected to be among the first to move in a significant way as soon as a CDNX turnaround kicks in…the last opportunity to pick up producers at favorable prices could come on any additional weakness in Gold which we do expect as the yellow metal continues to consolidate…producers could really take off by October/November if John’s analysis proves correct…

Canaco Resources (CAN, TSX-V) came out with more positive news this morning from Magambazi in Tanzania…Magambazi is shaping up to be a world class deposit, yet the stock has dropped by more than half from its all-time high of $6.45 per share…