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Gold is moving cautiously higher this morning in advance of today’s important Fed announcement followed by Chairman Ben Bernanke’s media briefing…as of 7:35 am Pacific, the yellow metal is up $3 an ounce at $1,716…Silver is 23 cents higher at $33.23…Copper is up a penny at $3.66…Crude Oil has added $1.02 to $86.81 while the U.S. Dollar Index is off one-tenth of a point to 79.95…

Will Bernanke Disappoint?

Bernanke is widely expected to announce another round of Treasury buying after a two-day meeting of the FMOC…the results of the meeting will be announced at 9:30 am Pacific, followed by Bernanke’s comments to the media beginning at 11:15 am…the Fed will also release its latest economic forecasts at 11:00 am…

The Dow has risen five days in a row – its best streak since March – and is now less than 3% away from 2012 highs…whether the rally continues hinges largely, at least in the short term, on what Bernanke announces, and no doubt he will use his platform to encourage U.S. lawmakers to reach a compromise and avoid the so-called “Fiscal Cliff”…a drop in the U.S. jobless rate to 7.7% in November from 7.9% in October was driven by workers exiting the labor force, a fact certain to disappoint the Fed…as its last program of Treasury purchases, known as Operation Twist, draws to a close, officials look set to replace it with a fresh $45 billion per month in buying…unlike those in Twist, which were funded by sales and redemptions of short-term debt, the new Treasury purchases will further expand the Fed’s $2.8 trillion balance sheet – in effect, new money creation…roughly 89% of economists recently surveyed by the Wall Street Journal said the Fed will keep buying about $40 billion of mortgage-backed securities each month and almost 72% believe the central bank will end “Operation Twist” and replace it with outright purchases of Treasurys…Fed officials have sounded optimistic that their bond-buying programs are helping to push down long-term interest rates, making borrowing cheaper to spur spending and investment…

Some market watchers believe the Fed may disappoint today, that Bernanke may save some of his bullets for later on…Jim Sullivan, chief U.S. economist at High Frequency Economics, told the Wall Street Journal:  “Fed officials are almost universally expected to announce today that QE3 will be expanded…we agree…however, we see some risk that the new purchase program will be somewhat smaller than the $45 billion per month widely expected”…

After Bernanke’s moment today, the media and the markets will certainly be re-focusing on what’s happening, or not happening, in Washington…Bernanke could be more cautious than expected today in terms of additional Fed easing so as not to let the politicians off the hook…

Today’s Markets

Asian markets were bullish overnight with Japan’s Nikkei Index hitting a 7-month high…China’s Shanghai Composite, meanwhile, climbed 8 points to 2083…below is an updated 2.5-year-weekly chart from John on the Shanghai that shows how this Index remains in a downsloping wedge…recently, there has been a divergence between price and RSI which is a sign that this market could be ready to turn the corner which we believe would be positive for global equities in general, including the Venture Exchange which interestingly has shown very  similar trading patterns to the Shanghai…

North American markets are higher in advance of the Fed decision…as of 7:35 am Pacific, the Dow is up 18 points to 13267…the TSX has gained 33 points while the Venture Exchange is up 2 points at 1186…

Kaminak Gold (KAM, TSX-V)

Astute traders would have scooped up Kaminak Gold (KAM, TSX-V) in recent days which was heavily oversold and trading in the $1.00 to $1.10 support band…KAM broke out of its doldrums yesterday by jumping 29 cents to close at $1.29 – right up against its still-declining 20-day moving average (SMA) which is certainly one resistance area…near-term, KAM also faces stiff resistance beginning at $1.40 as John’s chart points out…as of 7:35 am Pacific, KAM is down 6 cents at $1.23…

SilverCrest Mines (SVL, TSX-V)

A quality Silver play we’ve been following this year is SilverCrest Mines (SVL, TSX-V) which is currently trading between support ($2.37) and resistance ($2.95)…it’s unchanged in early trading today at $2.57, just below its 50-day SMA…SVL needs an increase in volume and buying pressure in the near future to regain momentum…near the end of 2008, SVL was sitting at the bargain-basement price of 20 cents…below is an updated 2.5-year weekly chart from John…

Panora Minerals (PML, TSX-V)

Panora Minerals (PML, TSX-V), with a portfolio of potential large copper and copper-Gold deposits in Peru, has strong consistent strong support around 60 cents for much of this year with resistance in the mid-80’s…yesterday, PML climbed 7 cents to 66 cents after closing at its lowest level (59 cents) in several months…this is a play that our readers should certainly keep on their radar screens…as always, perform your own due diligence…below is an updated 2.5-year weekly chart from John…

Note: John, Jon and Terry do not hold positions in KAM, SVL or PML.