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Gold is trying bounce back after significant weakness yesterday on disappointment surrounding the European Central Bank (ECB) which played down the prospect of a boost to its sovereign bond purchasing (pre-summit theatrics?)…as of 6:00 am Pacific, the yellow metal is up $4 an ounce (off its highs) at $1,710…Silver is 12 cents higher at $31.78…Copper is up a nickel to $3.54…Crude Oil is flat at $98.37 while the U.S. Dollar Index is up slightly at 78.86…

The seemingly never-ending euro zone nightmare continues…EU leaders announced a new “fiscal pact” this morning involving all 17 euro zone countries and five others who don’t share the euro (with the notable exception of Britain)…the euro zone has new rules on tougher budget discipline but this dysfunctional family has so far failed to agree on a treaty change to enshrine the rules (though there are developments on that front just in the last hour or so)…there’s a commitment to funnel more money into the International Monetary Fund plus a plan to advance by one year the launch of the European Stability Mechanism…but the crisis continues, and more summits will undoubtedly occur…in addition to a fiscal deficit, the euro zone is also facing a growth deficit at the moment and how it plans to tackle that is anyone’s guess…there was little mention of that today…the euro zone is a mess and the situation there is going to get worse before it gets better, guaranteed…the ECB is going to have to become more aggressive (this is key) which ultimately should be bullish for Gold…markets are hoping the euro zone crisis will move in a “QE rich” direction but we’ll have to wait and see what unfolds in the days and weeks ahead…looking at a wide spectrum of charts, it seems we’re nearing “a point of decision” in Gold and Gold stocks…one could make the argument we’re about to see a major breakout…on the other hand, a breakdown is also possible but less likely in our view…

In a late breaking development from the EU summit, Reuters is reporting that nine countries are apparently ready to join the 17 members of the euro zone to draft a new intergovernmental treaty for deeper fiscal union aimed at tackling the sovereign debt crisis…the decision appears to isolate Britain even more markedly as the only one of the 10 non-euro-zone countries in the EU not to agree to join the treaty change…”The Heads of State or Government of Bulgaria, Czech Republic, Denmark, Hungary, Latvia, Lithuania, Poland, Romania and Sweden indicated the possibility to take part in this process after consulting their Parliaments where appropriate,” said the draft conclusions…

There is some positive news on the global economic front today…China’s inflation cooled to the slowest pace in 14 months in November as gains in food costs moderated…this will allow China to loosen monetary policy more aggressively which raises hopes for a “soft landing” and continued strong growth in the area of 8% or better…Chinese consumer prices rose 4.2% from a year earlier, according to the statistics bureau in that country…that was lower than all estimates in a Bloomberg News survey of 35 economists that had a median forecast of 4.5%…producer prices gained 2.7%, the least in almost two years…

Some interesting comments from Vancouver-based mining entrepreneur Ross Beaty in a Northern Miner interview…Beaty has started 12 public companies and has sold eight of them, converting about $1 billion of investment capital into shareholder wealth of more than $5 billion…this is what Beaty had to say regarding his outlook for the metals market…

“More people are born every day and if you forget about Europe and America there are very strongly growing economies in most of the world: India, China, Malaysia, Indonesia, all of South America, all of Africa, and there are an awful lot of people in those countries that all want more junk, bigger houses, more cars, and all of that drives commodity demand.  So despite all the nervousness in the U.S. and in Europe, I see the rest of the world as actually being more important for commodity growth than those mature markets. And on the supply side, we’re just not discovering as much as we need to discover to keep prices low. So I’m optimistic that we are going to continue in a strong metal market for many, many years. Having said that, at the end of the day it’s very unsustainable to be consuming as much as we are consuming and high prices will ultimately tend to reduce consumption and increase supply and that’s probably a good thing, especially the consumption side because long-term the only sustainable way for seven billion people to live on earth is if we all consume less and make what we produce today go farther.”  (Ross Beaty, source: Northern Miner)…

Dow futures this morning are showing a modest rebound at the open after yesterday’s sell-off in the markets…the CDNX has fallen for four consecutive sessions (40 points in total) but has plenty of support around the 1500 area…on an encouraging note, the 50-day moving average (SMA) is now advancing which could allow this market to gain some traction and move higher…there’s considerable “heavy lifting” to do between 1575 and 1700 – the Index has to overcome that resistance for the outlook to improve – but a breakout through 1700 by year-end would be very bullish…on the flip side, breach of support at 1500 would be a bearish development…

The TSX Gold Index chart is very interesting and suggests this Index is on the verge of an upside breakout…check out the classic symmetrical triangle in John’s chart below…the Index has held support in the face of strong selling pressure recently which has started to abate…a strong move past 420 would be very bullish…

John has another interesting chart this morning, this one on Gold Bullion Development (GBB, TSX-V) which may have found a bottom recently at 15 cents…

Later this morning we’ll be posting Part 2 of Jon’s interview yesterday with Cap-Ex Ventures‘ (CEV, TSX-V) President and CEO Brett Matich…Part 2 covers a wide range of issues and is very informative…we’ll comment more on CEV in the days ahead…