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Gold has hovered between $1,283 and $1,301 so far today, ahead of the start of 2 days of semi-annual Congressional testimony by Ben Bernanke…the Fed Chairman appears before the House today and the Senate tomorrow, and investors will be focusing on every word he speaks for more clues as to when the Fed may start scaling back its bond buying program…bullion has already gotten a lift after the release of prepared remarks from Bernanke (the bond buying program is “by no means on a preset course”)…he’s currently testifying, so expect jumpiness in Gold and perhaps the markets in general (up and down action) today and tomorrow…as of of 7:15 am Pacific, bullion is up $7 an ounce at $1,298…Silver is 11 cents higher at $20.12…Copper is off a penny at $3.15…Crude Oil is 24 cents lower at $105.76 while the U.S. Dollar Index is relatively unchanged at 82.62…

Some interesting comments from Gold Fields Nick Holland in an interview with Mineweb’s Geoff Candy (www.mineweb.com):

“The fundamentals that have underpinned the Gold industry over the last decade have not really changed, if you go and analyze them one by one, governments have been buying, the Chinese and the Indians have been the big source of demand and that will continue to be the case as the growth in those countries is far greater than anywhere else…Producer supply has declined, scrap sales are always a function of price, if the price pulls back the scrap comes off the market.  So we could well be heading again for a deficit in the Gold industry and that would help to underpin prices but sentiment is obviously driving these markets more than the fundamentals and sentiments can change positively and negatively very quickly.  So I don’t think Gold at all has lost its benefit in the portfolio and any investor, in my humble view, should have some Gold exposure in their portfolio because how confident are you of the values of the other asset classes you have.  Watch out over the next five to ten years  – we are going to see a contraction in supply in the Gold industry from the plus-minus 68m ounces we’re mining now, I think it will be a lot lower in five years than that“…

Chanos:  China Credit Bubble Getting “Worse And Worse And Worse”

Closely-watched short-seller and hedge fund manager Jim Chanos, who has plenty of followers and detractors, told CNBC today that the credit bubble in China is “world class” and is getting “worse and worse and worse”…the deteriorating credit situation “has worked its way through things like steel, cement, and commodities globally,” Chanos stated in a “Squawk Box” interview from New York…

Today’s Markets

Asian markets were mixed overnight…Japan’s Nikkei average rose slightly, climbing 16 points to 14615…China’s Shanghai Composite broke a brief winning streak, falling 20 points to 2045 despite some upbeat economic data…foreign direct investment in June surged over 20% from a year ago, a huge increase from May’s 0.3% annual gain…meanwhile, China’s holdings of U.S. Treasurys climbed to a record high in May despite a broad sell-off in U.S. government debt…China, the biggest foreign holder of U.S. sovereign bonds, raised its holdings of U.S. government debt by $25.2 billion to $1.316 trillion, according to the Treasury Department international capital (TIC) data published late yesterday…European shares are up slightly in late trading overseas…in New York, as earnings season and the Bernanke Watch continue, the Dow is up 24 points through the first 45 minutes of trading…the TSX is 68 points higher while the Venture has gained 2 points to 913…the next resistance level for the Venture is around 920…one of our readers asked this morning, has a final bottom been put in at 860?…too early to tell, of course, but the conditions seem ideal for a strong 3rd quarter…

Probe Mines Ltd. (PRB, TSX-V) Update

One of the best Gold exploration stories in Canada at the moment, in our view, is the success Probe Mines (PRB, TSX-V) is enjoying with its growing Borden Lake deposit in northeastern Ontario…we’ve been following developments there closely for more than a year, and John’s recent charts showed very strong technical support around the $1.50 level which held…Probe’s drilling focus has shifted shifted entirely to the important high-grade Gold zone discovered in the southeast, with all 4 drills on the property working in that promising area on expansion and infill drilling…Probe’s aim is to include as much of the new high-grade mineralization into an updated NI-43-101 resource estimate later this year…Agnico Eagle recently grabbed a nearly 10% position in PRB, and the major appears to be a logical candidate for a potential takeover of Probe within the next 12 months…PRB climbed 11 cents yesterday to close at $1.85…the EMA(20) is now at $1.61, which is strong new technical support, while the Fib. target (no timeline) in the 2.5-year weekly chart below is just under $3…that’s not a price target, as we don’t give those, but a theoretical level based on Fibonacci and technical analysis…as always, perform your own due diligence…Zenyatta Ventures (ZEN, TSX-V) is looking great in northern Ontario with its graphite deposit, but Gold enthusiasts need to be keeping a close eye on Probe as it could quickly develop into a star performer during the 2nd half of this year…lots of money in the treasury, and a very strong management and exploration team…PRB is off a nickel at $1.80 in early trading…

Paramount Gold & Silver (PZG, NYSE)

Nice intercept reported yesterday by NYSE-listed Paramount Gold & Silver (PZG, it also trades lightly on the TSX under the same symbol) from its Sleeper Project in Nevada – 305 metres grading 1.08 g/t Au and 10.5 g/t Ag…the hole cut across the zone at an oblique angle, so the true width of mineralization is estimated by Paramount to be approximately 150 metres…nonetheless, that’s still an exceptional result for this area and the best hole Paramount has ever drilled at Sleeper…2 other holes reported yesterday also returned long intercepts with average values well above the cut-off grade…more results are pending, and the exploration upside is still immense…the PEA that was released on the Sleeper last year showed robust economics at an average Gold price of $1,384 with an IRR of 26.8%…the base-case scenario incorporates an 81,000-tonne-per-day operation (approximate 30-million-tonne-per-year throughput), resulting in a projected 17-year operation with average annual production of 172,000 ounces of Gold and 263,000 ounces of Silver…projected life-of-mine average cash operating costs are $767 (U.S.) per ounce of Gold-equivalent recovered…start-up capital costs for this project scenario are estimated at $346-million…the past producing Sleeper Mine was one of the world’s lowest cost producers…SRK Consulting has been commissioned to update the Sleeper resource estimate to incorporate data from 44 new drill holes totalling over 15,000 metres completed since the resource estimation used in last year’s PEA…Paramount also holds the San Miguel Project in Mexico which boasts measured, current and indicated resources of 100 million ounces of Silver and 1.5 million ounces of Gold…

Paramount obviously offers excellent leverage to higher Gold and Silver prices, and so far the 3rd quarter is looking quite promising for a rebound in those metals…by the way, Garibaldi Resources (GGI, TSX-V) holds approximately 2.5 million shares of Paramount which originated from a deal between the companies 4 years ago on a Mexican property adjacent to San Miguel…below is a 2.5-year weekly PZG chart from John…RSI(14) is moving up from a bullish low “W”…PZG climbed 11 cents to close at $1.39 on the NYSE yesterday, and it’s edging higher in early trading today…

More Good Exploration News For British Columbia

Copper Fox Metals Inc. (CUU, TSX-V) has formed a joint venture with Teck Resources Ltd. (TCK, TSX) to further explore and develop the Schaft Creek project in northwestern B.C., an agreement that replaces and supersedes the 2002 option and joint venture deal between the 2 companies with respect to Schaft Creek…10,000 metres of diamond drilling, aimed at increasing the value of the project, is also expected to commence before the end of this month…CUU jumped nearly 30% yesterday (21 cents) to close at 80 cents on volume of more than 3 million shares on the news…as of 7:15 am Pacific, CUU is down 3 pennies at 77 cents…

Fission Uranium (FCU, TSX-V) Updated Chart

It should be an exciting summer for the Patterson Lake South (PLS) project now being drilled again by partners Fission Uranium (FCU, TSX-V) and Alpha Minerals (AMW, TSX-V)…with regard to Fission, one of John’s recent charts showed an excellent entry point around 70 cents at the bottom of an upsloping channel…yesterday, FCU jumped 8 cents on volume of more than 2 million shares to close at 88 cents…you may recall, and it’s shown again in this chart, the Fib. level John gave was 92 cents…resistance can be expected at this level, and the stock could take a short “breather” and consolidate after reaching this price, but by no means is he implying that FCU might be topping out…in fact, the next Fib. level (not shown on this particular chart) is $1.31…as of 7:15 am Pacific, FCU is unchanged at 88 cents…

Pacific Potash Corp. (PP, TSX-V)

Continue to keep a close eye on Pacific Potash (PP, TSX-V) which remains one of our favorites…excellent liquidity in the stock, and management has shown the ability to execute in every way so far…interest should pick up even more as drilling commences…the technicals are looking very strong with a cup-with-handle formation in its final stage…below is a 2.5-year weekly chart…as of 7:15 am Pacific, PP is up half a penny at 17 cents…

Note: John, Terry and Jon do not hold positions in PRB, PZG, or FCU.  Jon holds a share position in PP (John and Terry do not).