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Gold is steady this morning with only some minor overnight profit-taking after yesterday’s sharp gains that took it to a two-week high…as of 6:00 am Pacific, the yellow metal is up $3 an ounce at $1,693…Silver is up 16 cents to $33.00…Copper is down 3 pennies to $3.86…Crude Oil has lost a dime to $106.93 while the U.S. Dollar Index is flat at 79.01…comments yesterday by Federal Reserve Chairman Ben Bernanke, who hinted that more monetary stimulus could be on the way to boost the U.S. economy, lifted commodity and stock markets…Bernanke speaks again today beginning at 12:45 pm eastern at George Washington University in the third of four guest lectures…New York Fed President William Dudley also testifies at 10 am eastern before the House committee on the European sovereign debt crisis and the Fed’s role…

China – Fiscal And Monetary Stimulus On The Way

According to a report published by Goldman Sachs today, the Chinese government’s fiscal revenues in 2012 are expected to exceed budget estimates…that’s no surprise and it will put more money in the government’s hands to spend on projects that will support consumption, in turn giving a boost to the retail, consumer goods and energy sectors…the report says, “Fiscal revenues will likely beat the budget by around Yuan 500 billion ($79.3 billion)”…it also states that historically expenditures have exceeded budget estimates each year together with revenues…”Executing a more proactive fiscal policy is a core part of China’s 2012 economic agenda,” the report says…with low fiscal deficit as part of gross domestic product (GDP) in 2011 and low government debt as part of GDP, we believe China has ample fiscal flexibility”…according to the report, the government’s 2012 fiscal deficit target is 2% of GDP, up from 1% in 2011 which indicates higher potential to spend on spurring a slowing economy…during the last financial crisis in 2008-2009, China announced a $586 billion stimulus plan to reignite its economy…

Updated Gold Chart- Bullish Inverted Head & Shoulders Formation?

We’ve written recently about the possibility of a bullish inverted head and shoulders pattern forming in Gold, and that’s indeed what appears to be happening after recent trading action that took Gold down to a low of just under $1,630 last Thursday followed by an intra-day recovery Thursday and advances Friday and Monday…this chart that John has prepared this morning is truly quite amazing…expect Gold to meet resistance near-term at and just above $1,700, as John showed in his chart Sunday, but these patterns do take time to play out…us Gold bugs must be patient…however, the current chart is definitely very supportive of a move to a new record high in 2012 around $2,000 an ounce (Silver should outperform)…

CDNX Chart Update

The CDNX rebounded to close at its 10-day moving average yesterday, 1581, and the key will be to see some continued follow-through over the next week or so which would allow the Index to get back into the mid-1600’s to decisively and convincingly recapture bullish momentum…there are positive indications on the chart as John details below…

Focus Metals (FMS, TSX-V) enjoyed a powerful day yesterday, blasting through an area of resistance to close at $1.28 on total volume (all exchanges) of nearly 1.5 million shares…this should be an exciting year for FMS…Gold Bullion Development (GBB, TSX-V) may have finally put in an important low at 11 cents (this was a major resistance area in early 2010) after releasing an update on its Granada Gold Property…GBB reversed during the day and closed unchanged on total volume (all exchanges) of nearly 2.5 million shares…GBB is expected to release a NI-43-101 resource estimate for the LONG Bars Zone by the end of this week, or early April, though this initial number will fall short of previous expectations in part due to the fact that only 70% of the holes drilled to date are being used in this calculation…there is no denying the incredible potential of the Granada Gold Property…as stated by GBB yesterday, “the overall potential strike length of Gold Bullion’s landholdings ranges from 10.1 to 13.6 kilometres with no exploration undertaken to date on the eastern Adanac extension”…Gold Bullion may indeed have a Malarctic-sized deposit but unfortunately the company has not followed the aggressive, quick and efficient Osisko (OSK, TSX) model of proving up a resource…in fact, GBB has demonstrated a lot of inefficiency in terms of its “ground game”…if Osisko sees the potential of the LONG Bars Zone, and rumor has it they’ve been following this story with some interest, then we speculate the time could be approaching when they may decide to swoop in and swallow up GBB at these seemingly attractive levels…Osisko and other companies would have the resources necessary to prove up a multi-million ounce deposit at Granada…

ATAC Resources (ATC, TSX-V)

Rest assured, especially with higher Gold prices, the Yukon will heat up this year and ATAC Resources (ATC, TSX-V) is the leader of the pack there…John continues to like what he sees in the ATAC chart…

Note: John, Jon and Terry do not hold positions in ATAC.