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Gold has traded between $1,278 and $1,297 so far today…Gold watchers (and all investors) will be paying close attention tomorrow as Federal Reserve Chairman Ben Bernanke appears before the House of Representatives where he will report on U.S. monetary policy and the economy…as of 7:50 am Pacific, bullion is up $10 an ounce at $1,293…Silver is up 8 cents to $20.01…Copper has added 3 pennies to $3.16…Crude Oil has is off 12 cents to $106.20 while the U.S. Dollar Index has given up more than one-third of a point to 82.71…

As John’s Gold chart showed yesterday, an important resistance band the yellow metal needs to overcome is between $1,320 and $1,350…

When the herd is racing in the same direction in a particular market, when sentiment is overwhelmingly bullish or bearish, this is always the best time to either lock in profits or scoop up bargains…look at the chart below from Bloomberg which tracks the short positions in Gold for the “speculators” (not the commercial traders, who have been dramatically scaling back their short positions)…at the beginning of this month, the number of outstanding Gold short contracts was close to 140,000 – a record high…

As Frank Holmes commented in his Investor Alert over the weekend (www.usfunds.com):  “While I was on CNBC’s Squawk Box, Howard Ward, the chief investment officer of GAMCO Investors, made a bullish call based on the severity of the speculative short position:

“It was off the charts, just like it was a week ago for the short position and the yen, the pound and euro. Well, we’ve seen what happened to that. You wanted to be on the other side of that trade. I’ll take the other side of the Gold trade as well. Whenever so many people are on one side, I will take the other side. I think Gold probably rallies between here and the end of the year.”

U.S. Dollar Index Updated Chart

Bernanke’s dovish comments last week took the wind out of the sails of the greenback, at least temporarily, and perhaps that was his intention as the U.S. Dollar Index was threatening to push through 85 with strong momentum…it quickly went into reverse but found support just above 82.5…overall, the trend remains bullish and it’ll be quite fascinating to see how the greenback performs during this last half of the year (and tomorrow when Bernanke testifies before the House)…can the Dollar Index and Gold move in tandem?…yes, this has occurred at times in the past, but Gold (and the Venture for that matter) have generally performed much better when the greenback is weak…below is a 6-month daily chart from John…

CNBC reported this morning that fund managers are more bullish on the dollar than ever before, with a record number expecting the greenback to strengthen in the next 12 months, according to a new survey…a monthly poll from Bank of America Merrill Lynch showed that a net 83% of fund managers worldwide expect the dollar to appreciate in the next 12 months…this is a new record, breaking a previous record set in March when 72% of respondents forecast the dollar would rise over the following year…

Today’s Markets

Trading resumed in Japan after yesterday’s public holiday, and the Nikkei climbed 93 points overnight to close at 14599…China’s Shanghai Composite was up 6 points to 2066…European shares are off modestly in late trading overseas, thanks in part to disappointing economic sentiment data out of Germany…in New York, through the first 80 minutes of trading, the Dow is down 3 points at 15481…a slew of economic data out of the U.S. this morning…homebuilder confidence jumped in July to its strongest level since January, 2006, according to the National Association of Home Builders…the NAHB/Wells Fargo Housing Market index rose to 57 from a revised 51 in June…meanwhile, industrial production edged up 0.3% in June after an unchanged reading in May, according to the Federal Reserve…economists polled by Reuters had expected a gain of 0.2%…other numbers released this morning included consumer prices which posted their sharpest rise in 5 months in June…they advanced a seasonally adjusted 0.5%, thanks in part to a jump in gasoline prices…the TSX is off slightly as of 7:50 am Pacific while the Venture has gained 6 points to 903, the first time the Index has been above the 900 level in nearly a month (June 20)…

Updates On 3 Interesting Charts

There are about 2 dozen situations we’re looking at intensely at the moment that we would describe as having “superior” or unusual potential for the 3rd and 4th quarters of 2013, and these include GoldQuest Mining (GQC, TSX-V) and 2 other companies we haven’t mentioned for probably a few weeks – Aldrin Resource Corp. (ALN, TSX-V) and Amarc Resources (AHR, TSX-V…if you haven’t performed any due diligence on Aldrin or Amarc, we suggest you do…

GoldQuest, of course, has been a long-time BMR favorite for the potential of its land package in the Dominican Republic…initial assay results from drilling along the very prospective Guama trend, west of the Romero discovery, should be on the way soon…we like what the GQC chart is saying because there’s certainly a bullish undertone to it…below is a 2.5-year weekly chart from John…notice how the RSI(14) started trending higher in April…as of 7:50 am Pacific, GQC is down a penny at 45 cents…

Aldrin Resource Corp. (ALN, TSX-V)

Aldrin’s Triple M Uranium Property totals 120 sq. km, and is 9 km south to 11 km west of the Patterson Lake South (PLS) discovery…this chart is very interesting as it shows a cup-with-handle pattern in its final stages, combined with a long-term down trendline just a penny or so above the current price…it’s reasonable to expect a breakout above the top of the cup and the down trendline this summer…ALN closed yesterday at 10 cents…

Amarc Resources Ltd. (AHR, TSX-V)

British Columbia is going to be an exploration hot spot this summer, and Amarc Resources (AHR, TSX-V) is in an excellent position to benefit from that as we’ve mentioned on several occasions the last few months…below is an updated chart from John…the stock has formed a strong base around 5 cents…

Note: John holds a share position in AHR.  Jon holds a share position in GQC.