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Gold has reversed higher after trading as low as $1,570 this morning…as of 7:20 am Pacific, bullion is up $10 an ounce at $1,583…Silver is 42 cents higher at $27.72…Copper has gained 4 pennies to $3.41…Crude Oil is off 27 cents to $93.09 while the U.S. Dollar Index, which so far has been unable to plow through a strong resistance band between 83 and 84, is down one-tenth of a point to 82.54…

Gold is coming off what historically has been the second-worst month of the year for the metal as seen in the Bloomberg chart below…April and May tend to be much more favorable for bullion which lends support to the idea that a spring rally could be brewing for Gold and Gold stocks, especially given the fact that sentiment levels are so low…extreme oversold conditions in this space became very evident last week, and that included both the Venture Exchange and the TSX Gold Index…whether there’s simply a bounce that helps to alleviate these oversold conditions, followed by new lows, or if in fact we’re in the early stages of a true reversal remains to be seen…while the Venture has been looking better in recent days, the risk of a drop to the 980 area this month certainly can’t be ruled out as John’s charts have shown…but there are reasons for cautious optimism…

Today’s Markets

Asian markets were mostly higher overnight…Japan’s Nikkei average erased early gains, after touching nearly a 5-year high, and closed flat at 13192…this is a market on steroids thanks to the actions of the Bank of Japan which is injecting massive stimulus with plans to double the monetary base by 2015…if it’s not wise to “fight the Fed”, it’s also not wise to fight the Bank of Japan which has the full support and encouragement of the Japanese government…more gains are certainly in store for the Nikkei as demonstrated in John’s 20-year monthly chart…ultimately, a move up to the long-term down trendline resistance (near 17000) is certainly possible, but for now the next major milestone is the Fibonacci target of 14000…since money goes to where it can get the greatest return over the shortest period, continued strength and momentum in Japanese and U.S. equities can be considered to be problematic for Gold…

Nikkei 20-Year Monthly Chart

As of 7:20 am Pacific, the Dow is flat at 14615…Alcoa (AA, NYSE) kicked off earnings season yesterday with numbers that weren’t as bad as some had feared…the TSX has gained 69 points through the first 50 minutes of trading while the Venture has added 3 points to 1045…European shares are mostly in positive territory in late trading overseas…industrial production in the U.K. rose by more than expected in February, diminishing the risk the economy slipped back into recession in the first quarter of 2013…meanwhile, the Bank of France forecast today that the French economy posted growth of 0.1% in the first quarter of 2013, in line with its estimates, meaning that the euro zone’s second largest economy will have narrowly averted recession after its economy contracted by 0.3% in the last quarter of 2012…but such low growth could lead France’s government to miss its budget deficit targets, which are based on growth of 0.8% this year…oh well, the socialists in power there will just keeping finding ways to spend other people’s money, which socialists are so very good at doing as the late Margaret Thatcher so famously pointed out…eventually, of course, they’ll run out of money…the world today so desperately needs another Margaret Thatcher…

Chinese Inflation Eases In March

China’s annual consumer inflation eased to 2.1% in March from February’s 3.2%, data showed today, leaving policymakers room to keep monetary conditions easy and nurture a slow recovery…the lower inflation number was aided by a 5.5% drop in pork prices – not surprising, of course, given the widely televised spectacle of dead pigs floating upstream from Shanghai…pork is an important staple of the Chinese diet but there certainly hasn’t been as much of it on dinner tables in that country recently…meanwhile, factories and other producers saw price deflation deepen last month…producer prices in China were down 1.9% in March from a year earlier, compared with a year-on-year decline of 1.6% in February…while asset prices may be rising, the price of goods in China has stayed weak as many industries still face overcapacity…

Chinese President:  “We Don’t Want To Grow Too Fast”

Chinese President Xi Jinping said China’s days of breakneck growth are over as the world’s No. 2 economy tries to balance expansion with sustainability and increasing environmental awareness…speaking before business leaders at the Boao Forum for Asia in southern China yesterday, Jinping stated, “It’s not impossible to grow faster, but we don’t want to grow too fast”, according to an article in this morning’s Wall Street Journal…”I don’t think China can sustain super-high or ultra-high-speed growth”, he added, citing the need to balance economic growth with other issues…he said China’s slowdown last year to 7.8% economic growth is “partially due to our efforts to control the speed of growth”…he said the global economic recovery is “fraught with instability and uncertainty”, alluding to the sovereign-debt crisis in Europe and high unemployment in Western economies…by contrast, he said, “China’s economy is in good shape” and its upward trajectory can be sustained “for a long period of time”…there is still “huge space for growth” in an economy pursuing industrialization, urbanization and manufacturing modernization, he said…

Charts – EPO, PRB, UGD, RRX

John has updates this morning on four situations that all look reasonably promising at the moment based on technical considerations…obviously, a rally in the Venture in the coming weeks, should it materialize, would be beneficial to all four…as always, perform your own due diligence…

Encanto Potash Corp. (EPO, TSX-V)

Probe Mines Ltd. (PRB, TSX-V)

Unigold Inc. (UGD, TSX-V)

Raging River Exploration (RRX, TSX-V)

Note: John, Jon and Terry do not hold positions in EPO, PRB, UGD or RRX.