BullMarketRun.com

Gold has hovered between $1,721 and $1,734 so far today…as of 6:45 am Pacific, bullion is down $3 an ounce at $1,725…Silver is off 12 cents at $33.07…Copper is down 2 pennies at $3.47…Crude Oil has gained 54 cents a barrel to $87.29 while the U.S. Dollar Index is up slightly but significantly off its earlier highs at 80.97…

Today’s Markets

Asian markets powered higher overnight with China’s Shanghai Composite gaining 21 points to 2030…European shares are slightly higher…Greece’s international lenders failed for the second week running to agree how to get the country’s debt down to a sustainable level and will have a third go at resolving their most intractable problem next Monday…it’s the last trading session before Thanksgiving in the U.S., and the Dow is up 24 points at 12812 as of 6:45 am Pacific…the TSX is down 16 points while the Venture Exchange has gained 3 points to 1245…

Bernanke Warns Congress

Federal Reserve Chairman Ben Bernanke used a speech at the New York Economic Club yesterday to warn Congress about the importance of resolving the “Fiscal Cliff”…it was Bernanke who actually coined that phrase, and the mainstream media has been throwing it around like confetti at a wedding – scaring many investors in the process, but that’s what the media is good at doing…they love milking a story for everything it’s worth…Bernanke is not stupid, he knows that, and his words are always considered very carefully…he knows that monetary policy alone can’t solve the United States’ fiscal and economic woes, so he has been using the power of his position to focus the attention of Congress and the American people on the “fiscal issue” and the need for the President and Congress to get their act together…one can’t help but think some sort of a deal will be worked out and the markets will be able to put behind all this anxiety and uncertainty soon enough…

“The realization of all of the automatic tax increases and spending cuts that make up the fiscal cliff, absent offsetting changes, would pose a substantial threat to the recovery – indeed, by the reckoning of the Congressional Budget Office and that of many outside observers, a fiscal shock of that size would send the economy toppling back into recession,” Bernanke stated…he warned that there is little the Fed can do to protect the economy if the full $500 billion of “fiscal cliff” spending cuts and tax increases occurs….”A fiscal shock of that size would send the economy toppling back into recession,” he warned…he reiterated his call to lawmakers to enact a long-run deficit-reduction plan that doesn’t kick in too aggressively at once…such a plan, he said, could help reduce business uncertainty and support the economy today…”Even as fiscal policy makers address the urgent issue of longer-run fiscal sustainability, they should not ignore a second key objective: to avoid unnecessarily adding to the headwinds that are already holding back the economic recovery,” he added…Bernanke lately has been speaking more starkly about the significance of fiscal-policy decisions…debt-limit debates in 2011, he said, “badly damaged confidence,” and a repeat “could impose even heavier economic and financial costs…

“We will continue to do our best to add monetary-policy support to the recovery,” Mr. Bernanke said at the New York Economic Club, answering a question about how the Federal Reserve would respond to impending spending cuts or tax increases that might restrain economic growth…”What the Federal Reserve can do and will do is continue its stated policy which is to do additional asset purchases, buy MBS [mortgage backed securities], and take whatever actions are appropriate to try to ensure that the outlook for labor markets improves in a sustained way and a substantial way,” he added.

Long-Term Gold Chart

Bernanke has been one of Gold’s best friends and a continued aggressive monetary approach by the Fed in 2013 will maintain a bullish backdrop for bullion…below is an updated 12-year monthly Gold chart from John that shows some similarities between now and the period shortly after the Crash of 2008…Gold fell below its 12-month moving average (SMA) earlier this year and moved back above it in September…given this chart pattern, in addition to historical trends, we expect Gold to accelerate to the upside during the first quarter of next year…

What Is Copper Telling Us?

Copper has proven to be a very reliable leading indicator and it certainly hasn’t fallen off the cliff despite heightened concerns in recent weeks regarding the global economy…Copper has been trading in a symmetrical triangle for more than a year and it’s now very close to the apex which means “decision time” is near…volume and buying pressure both need to pick up for Copper to break to the upside…we’ll keep a close watch on this metal in the weeks ahead as its trading behavior should give us some important clues on the direction of the markets…

Probe Mines (PRB, TSX-V)

Probe Mines (PRB, TSX-V) has been a star performer recently and has climbed 34 cents over the last three trading sessions after closing yesterday above $2 per share for the first time since February…the market has finally been waking up to the quality of Probe’s Borden Lake Project in northern Ontario…John’s 6-month daily chart suggests there’s room for Probe to move higher over the near-term, but of course overall market conditions will be critical…as of 6:45 am Pacific, PRB is up another dime at $2.20…

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