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After a major intra-day reversal Monday, and a pullback yesterday, Gold is back in positive territory this morning with this week shaping up to be a possible important turning point – at least for the short-term…as of 7:30 am Pacific, bullion is up $17 an ounce at $1,393 – though it has quickly retreated from its high of $1,416 as it couldn’t hold the $1,400 level…Silver is 38 cents higher at $22.81…Crude Oil is off 37 cents a barrel to $95.81 while the U.S. Dollar Index has gained nearly one-fifth of a point to 83.97…the Dollar is at a critical point and must be watched closely…

Physical demand for Gold in key Asian nations remains strong, according to HSBC…strong physical buying, most notably from China and India, has been entering the market, the bank says…“Bullion’s price premium on the Shanghai Gold Exchange stood at U.S. $22/ozz, as it remained above $20/oz for a fourth consecutive trading day,” HSBC stated…the bank cites a report in the Economic Times of India saying buyers in Hong Kong and Singapore are currently paying a $5-per-ounce price premium, while buyers in India are paying a $40 premium…“Physical Gold buyers have significantly stepped into the market since bullion’s first price break below the $1,600/oz level earlier in the year…we expect this to continue with prices below 1,400/oz,” HSBC stated…

“End Of Commodities Supercycle”: Citi Bank

A slower-growing Chinese economy, lack of correlation between equities and commodities, and a stronger U.S. dollar are marking the “end of the commodities super-cycle,” according to Citi Bank in a research note released yesterday…but it’s not all doom and gloom from Citi…“Citi expects 2013 to be the year in which the death bells ring for the commodity supercycle after its duly noted sunset, ushering in a new decade of opportunities based on how individual commodities will perform against one another and against broader market indicators such as equities or currencies…it will be a period of focus on unique individual commodity cycles and new relations emerging between and among commodities and other asset classes from fixed income to foreign exchange to global equities,” they stated…the firm believes Gold has lost “investment glitter” as investors seek higher returns in other investments and inflation fears are further postponed…“As fears of inflation driven by global QE (quantitative easing) recede, for the time being, so should the Gold price…our current projections are for Gold price to average $1,555/oz in 2013 and $1,435/oz in 2014,” they said…

Is Gold Gearing Up For A Surprise?

Monday’s trading action in Gold was very bullish, and what’s also interesting is the chart below from John…the euro is finding support at the “neckline”, the Dollar Index faces stiff resistance around 84, while Gold for now appears to have put in a double bottom (lower prices later in the year are certainly possible, but for now Gold seems to have found important support in the low $1,300’s after successfully re-testing last month’s low)…these are volatile markets at the moment, so it’ll be interesting to see what unfolds in the coming days…

The HGD – TSX Gold Index In Reverse

Evidence for a potential rally in Gold stocks also comes from the HGD which is the double-reverse Gold Index ETF…it has more than tripled in value since last September but could be running out of steam for now…the RSI(14) overbought condition on the 2.5-year weekly chart will need to unwind, guaranteed, and the time for that may have arrived…the $25 level could prove to be a temporary top, followed by a retracement to one of the Fibonacci levels…

Will Fed Ramp Up Or Begin To Retreat?

Federal Reserve Chairman Ben Bernanke reiterated the central bank’s “intention to maintain highly accommodative monetary policy as long as needed” as he started his testimony before the Senate at 7:00 am Pacific…at 11:00 am Pacific, the Fed will also issue the minutes from its April 30/May 1 FMOC meeting…Federal Reserve Bank of New York President William C. Dudley said he has not decided whether the Fed’s next move should be to enlarge or shrink its bond buying program as he called for a fresh look at its eventual retreat from record asset purchases…“Because the outlook is uncertain, I cannot be sure which way –  up or down – the next change will be,” Dudley said in a speech yesterday in New York…Dudley adds his voice to a debate on the FOMC about what to do with its program of bond purchases, designed to lower the 7.5% unemployment rate…while many Fed officials have voiced support for shrinking purchases as the next step, Dudley, who is also vice chairman of the FOMC, signaled willingness to increase purchases…

Today’s Markets

Japan’s Nikkei average hit a 5.5-year high overnight, gaining 246 points to close at 15627…the Bank of Japan raised its assessment of the economy once again and stood pat on policy, showing confidence in its drastic easing program despite recent volatility in the bond market…China’s Shanghai Composite gave up 3 points to finish at 2302…European shares are mixed in late trading overseas…through the first hour of trading in New York, the Dow is up over 150 points…the TSX has gained 118 points while the Venture is up 9 points to 948…tomorrow we will be focusing again on the Iskut River play…

Solvista Gold Corp. (SVV, TSX-V)

Solvista Gold Corp. (SVV, TSX-V) closed 40% higher yesterday at 35 cents on the Venture Exchange after releasing impressive drill results from its Caramanta Project in Colombia, most notably 456.7 metres grading 1.40 g/t Au Gold equivalent…in a different market, this stock would have really exploded but we still see good upside potential for SVV as more investors become aware of the latest results and how this project is progressing…the 456.7-metre intercept from the El Reten target was the longest, continuous mineralization reported to date at Caramanta where there are 3 known centers (and possibly 2 more as revealed yesterday) of porphyry-related mineralization along a 3 km trend…the current surface footprint of this hydrothermal system measures 430 m x 360 m with a vertical extension of more than 400 metres…Solvista will need to widen the mineralized body, but the system remains open in all directions…results are pending from 2 other targets drilled on the property – El Corral and Ajiaco Sur…the company stated in yesterday’s news release that visual observations from drill core at El Corral and Ajiaco Sur suggest both systems are similar in alteration types and vein and fracture controlled mineralization as El Reten, but appear to be more Copper and Silver dominant…Solvista has strong insider ownership and completed a $5.6 financing in early February at 45 cents…the stock was as high as $1.29 last September and has 68 million shares outstanding…SVV gapped up yesterday morning on the news but closed on the Venture at its low of the day (35 cents), so how this behaves over the next couple of trading sessions is critical…to gain technical momentum and make a possible run this week, it needs a volume surge and must push through yesterday’s intra-day high of 46 cents – slightly above the still-declining 100-day moving average (SMA) where there is resistance…below is a 1-year weekly chart from John…as of 7:30 am Pacific, SVV is up a nickel on light volume at 40 cents…worth watching closely…

Madalena Ventures (MVN, TSX-V) Chart Update

We don’t follow too many Oil plays, but one that we do like and mentioned previously when it was trading in the 30’s continues to do very well – Madalena Ventures (MVN, TSX-V), an aggressive Calgary-based company with increasing production and reserves on 3 horizontal resource plays in Alberta…it also holds 135,000 net acres in the Neuquen Basin in Argentina where it’s focused on developing conventional sands and delineating shale resources…the chart has shown steady progression since late last year after the company made a strategic acquisition of Online Energy Inc., a move that came after a large drop in the MVN share price from an early 2012 high of $1.40…as always, perform your own due diligence, but this is certainly one to keep on your radar screen…