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Gold has hovered between$1,319 and $1,340 so far today as it continues to trade within a resistance band ($1,320 – $1,350)…as of 6:45 am Pacific, bullion is off $9 an ounce at $1,325 but is still poised for a weekly gain as it pushed through the $1,300 barrier…the technicals still look favorable for the short-term despite today’s weakness…Silver is 26 cents lower at $19.99…Copper is 7 cents weaker at $3.10…Crude Oil is down 55 cents to $104.94…WTI is headed for its first weekly drop in more than a month on profit taking and amid rising crude output in the U.S. and speculation that China’s plans to cut excess manufacturing capacity will curb fuel demand…however, as we’ve pointed out, WTI has solid technical support between $100 and $104…the U.S. Dollar Index, which importantly closed below 82 yesterday, is off slightly at 81.67…

China’s Gold demand could hit a record 1,000 tonnes this year, the World Gold Council said yesterday, which means it would overtake India as the world’s biggest bullion consumer…Chinese Gold demand is likely to be in the range of 950 to 1,000 tonnes in 2013, the WGC’s managing director for investment, Marcus Grubb, said, but risks are skewed to the upside and could push demand past the upper end of that range…”China will probably be the world’s biggest Gold consumer this year for the first time on an annual basis,” Grubb said…”That will be driven by both jewellery and investment demand…Jewellery will be the biggest overall demand segment, but investment will grow fastest“…

Physical deliveries from the Shanghai Gold Exchange in the first half of 2013 exceeded total deliveries for all of last year, exchange data showed, while premiums over spot prices rose above $20 an ounce…

India’s Gold demand is likely to be at the lower end of earlier guidance, Grubb said, at around 850 tonnes, which is still impressive considering the Indian’s government’s aggressive efforts at trying to curb Gold imports this year in a bid to cut a record trade deficit and boost the rupee…Indians have a deep cultural affinity for Gold, and the government’s attempts to counter that in a significant way may prove to be more difficult than first thought…

Last month, the government also made it harder for dealers to use bank credit to buy the precious metal from suppliers overseas…the nation’s central bank restricted banks and trading agencies from importing Gold on behalf of customers and taking payment later…the move effectively required dealers to pay cash in advance for imports…on Monday, the central bank changed tack, scrapping the ban on deferred payment but requiring banks and dealers that import the metal to ensure that 20% of imports are re-exported…

“Overall, this measure would mean that Gold availability in open markets is going to reduce still further,” said Santosh Srivastava, managing director of Gitanjali Jewellery Retail Ltd., which runs a chain of 135 retail shops across the country…

The Indian government’s measures are having an effect…Gold imports declined 11% to 859.7 tons in 2012 from 969 tons in 2011…and the total for June fell about 80% to 30 tons from 162 tons in May, according to a trade ministry official…

But while supply may be falling, demand isn’t…Gold is the preferred form of savings for farmers, Srivastava said…it is also the traditional gift for brides and purchased by millions of Indians during Hindu festivals, he added…”We have always maintained that there is a very innate demand for Gold in India,” said P.R. Somasunderam, managing director of the World Gold Council’s India office…”Trying to manage this demand, which is so diversified, by restricting supply will lead to undesirable consequences“…India’s Gold demand is likely to be at the top end of the council’s forecast range of 865 to 965 tons, or 2.24 trillion rupees ($37.7 billion), this year, Somasunderam said…plentiful monsoon rains and an ample harvest are expected to drive up demand from farmers in the second half, during the height of the festival season, he stated…

Reports suggest that smuggling of Gold into India continues to increase on a monthly basis, rising in tandem with the government’s efforts to curb demand…a senior official in the Department of Revenue Intelligence, a part of the Finance Ministry that combats tax evasion, told the Wall Street Journal that smuggling is mostly coming from Dubai but also from Bangkok and Singapore…the official said some of the Gold comes by sea, but it also is being smuggled across land borders with Bangladesh and Nepal…the number of people arrested by the department for Gold smuggling rose to 32 in the quarter that ended in June from 4 during the same period a year earlier, according to the Revenue Intelligence official…the value of the Gold seized during the quarter was 270 million rupees, more than 10 times the 25 million rupees of precious metal retrieved from smugglers during the same period in 2012, said the official…but this is only a fraction of the Gold being smuggled into the country, Revenue Intelligence officials say…”I think we are able to detect only about 5% to 10% of the Gold smuggling in the country,” a second Revenue Intelligence official told the Wall Street Journal…

In June, a man was stopped at customs while carrying cardboard boxes containing household appliances, such as a television and a food blender…an excessive number of staples on the boxes aroused suspicion…on closer scrutiny, customs officers discovered that the staples were made of solid Gold, weighing 755 grams in total, worth around two million rupees…a couple and their 5-year-old child were stopped by customs this week at the southern Indian port of Mangalore…a search led to the discovery of over four pounds of Gold coins and jewelry, valued at 5 million rupees, inside the woman’s underwear…others continue to rely on time-tested methods – Gold carried inside hollowed-out shoes, false bottoms in luggage or stuffed inside their own bodies (source: Wall Street Journal)…

Central Bank Buying Of Gold Continues

Central banks in several emerging-market countries continued to boost their Gold reserves last month, buying as the price plunged to its lowest level in almost 3 years…regular Gold buyers Kazakhstan and Azerbaijan were among those that added to their holdings in June, when many other central banks were also active…not all were looking to buy, however. Germany and Guatemala both sold holdings, while Turkey’s official reserves also fell, according to data from the International Monetary Fund…

Ukraine returned for the second month running in June, adding 80,000 troy ounces of Gold to its official reserves, which now stand at nearly 1.3 million ounces, the IMF figures showed…Azerbaijan bought for the 6th consecutive month, adding nearly 65,000 ounces to its official holdings…its reserves, which in December stood at virtually nothing, now exceed 250,000 ounces…Kazakhstan, another regular bullion buyer in recent months, also increased its holdings in June…the country’s central bank bought more than 45,000 ounces of the metal, taking its reserves to 4.2 million ounces…Russia, a significant purchaser in recent years that has increased its reserves by almost 10% in the past year alone, added just 9,000 ounces to its holdings in June…according to the World Gold Council, Russia’s 32 million ounces represent the seventh-largest reserves of any country in the world…Greece added 1,000 ounces to its 3.6-million-ounce reserve, while Kyrgyzstan and Belarus also added a small amount of Gold to their holdings…

Net sellers in June included Germany, which lowered its Gold holdings by 25,000 ounces – a small amount given that the country’s reserves stand at more than 109 million ounces, putting it second only to the U.S., according to the Gold council…Guatemala, which last sold gold in July 2012, cut its holdings by 7,300 ounces, the IMF data show, leaving it with 214,300 ounces. Neighboring Mexico and the South American nation Suriname made small cuts to their official reserves too…Turkey’s Gold reserves similarly declined…the country’s holdings have nearly quadrupled over the past 2 years…analysts say a central bank decision to accept Gold as collateral from commercial banks is the main cause…in June, Turkey reduced its reserves by just over 120,000 ounces to 14.2 million ounces…

Today’s Markets

Japan’s Nikkei average tumbled to its lowest level in nearly 3 weeks overnight as the yen rose against the greenback while the rest of Asia traded mixed as attention turned to the region’s corporate earnings results...the Nikkei lost 433 points or 3% to close the week at 14130…China’s Shanghai Composite slipped 11 points to finish at 2011…European shares are off moderately in late trading overseas…in New York, the Dow has lost 77 points as of 6:45 am Pacific…the TSX is 24 points lower while the Venture is up a point at 925…

Fission Uranium (FCU, TSX-V) Chart Update

Of course we remain very bullish on the Saskatchewan uranium play, and John made a great call on Fission Uranium (FCU, TSX-V) when it pulled back into the 60’s in late June/early July…you can see how it has remained in an impressive upsloping channel in John’s 10-month weekly chart below…the next level to watch for, based on Fibonacci analysis, is $1.10…that’s not a price target, just a theoretical level FCU appears to be headed to over the near-term based on Fib. and technical analysis…as always, perform your own due diligence…

Castle Resources Inc. (CRI, TSX-V)

With interest in exploration on the rise in British Columbia, bottom-fishers may wish to take a look at Castle Resources (CRI, TSX-V) which recently engaged KPMG Corporate Finance as financial adviser to identify, analyze and execute a transaction that will fast-track the development of the Granduc Copper Project in the northwestern part of the province…”We are excited to be teaming up with KPMG,” stated Mike Sylvestre, President and CEO of CRI in a news release July 10…”Their global reach and proven expertise will be a strategic asset as we move forward with the redevelopment of the Granduc Copper Project…with a large, high-grade Copper resource and robust PEA level economics, we believe the best course for Castle is to find a strategic partner“…

Castle has been much more active in the past couple of weeks…it also gained a penny-and-a-half yesterday on volume of nearly 2.5 million shares (all exchanges), closing at 4.5 cents…the stock is very close to an all-time low after climbing as high as 95 cents in 2011…below is an 8-month weekly chart from John…a bullish engulfing pattern has formed in the past couple of weeks…the first Fibonacci resistance level is 10 cents…

Eastmain Resources (ER, TSX) Chart Update

Eastman Resources (ER, TSX) has much going for it in Ontario and Quebec, and has been gradually creeping higher since June 28 when it bottomed at 18.5 cents, a 12-year low, and reversed violently that day to close at 27 cents on volume of nearly 2 million shares…that was clearly a major reversal and perhaps a broader indication of a bottom in the overall market…ER closed yesterday at 33 cents…a key level to watch is 35 cents – that’s where there is important resistance…strong support exists at 25 cents…below is an 8-month weekly chart…

Alberta Oilsands Inc. (AOS, TSX-V)

This is a company that has gone through some internal strife and reorganization but appears to be in the early stages of a turnaround…at least that’s what the market and the chart are each saying…as always, perform your own due diligence…AOS has made a big move this week, closing yesterday at 6.5 cents where there was significant resistance…this morning, it surprisingly gapped up to 10 cents and through 15 minutes of trading it’s up 3 cents at 9.5 cents on volume of over 3 million shares (the Venture’s trading leader so far this morning)…there is Fib. resistance at 9, 11 and 13 cents, and it will also be interesting to see if this morning’s gap eventually gets filled (would seem unlikely at this point given the huge volume)…short-term, overbought conditions clearly exist, so there’s a risk in succumbing to temptation and chasing this at the moment…but clearly there is something happening with AOS…this also illustrates the growing opportunities in the energy sector given the strength in Oil prices…

Below is a 20-month weekly AOS chart through yesterday when we noticed something was up with this…such a big gap-up this morning was unexpected…all things are possible in the market…

Editor’s note:  AOS was halted at 7:13 am Pacific, pending an announcement from the company…at the time of the halt, it was up a nickel on total volume (all exchanges) of 7.5 million shares…

Note: John, Terry and Jon do not hold positions in FCU, CRI, ER or AOS.