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Gold has traded between $1,316 and $1,333 so far today…as of 7:30 am Pacific, bullion is unchanged at $1,326…Friday’s significant drop was unsettling for some investors as Gold failed to hold above its 20, 50 and 100-day moving averages (SMA’s) despite the Fed’s decision last Wednesday not to scale back its bond-buying program at this point in time…a 4-year monthly chart from John (see below) puts the current situation into perspective, however…Silver fell as low as $21.40 overnight but is currently up 6 cents at $21.86 (John has updated charts at the bottom of this morning’s report)…Copper is down 2 pennies to $3.26…Crude Oil has fallen $1.57 a barrel to $103.19 while the U.S. Dollar Index is up one-tenth of a point at 80.49…

Bloomberg reported this morning that Gold output in Ghana, Africa’s largest producer after South Africa, may fall as much as 18% this year after declining prices prompted some mines to cut production, according to the state-run Minerals Commission….

Gold Long-Term Chart

John’s 4-year monthly chart provides additional evidence that Gold hit an important low of $1,179 in late June, marking the end of a 3-wave corrective phase…what we’ve seen this month is a normal Fibonacci retracement of the $255 move between late June and last month’s high of $1,434…important Fib. retracement levels to watch closely are between $1,283 and $1,309…Gold is finding strong support within that range, and those levels really need to hold…short-term resistance is in the mid-$1,360’s followed by $1,400…expect Gold to continue to trade between these support and resistance levels until an event “tips the scale” and (Gold bulls hope) pushes prices through the important $1,400 barrier…of course some analysts believe we haven’t seen the bottom yet in Gold, but the Venture Exchange – a reliable leading indicator of bullion prices – isn’t trading in a way that would suggest Gold prices are about to collapse again…in fact, the Venture’s resilience in the face of weakness in Gold this month is highly encouraging and suggests bullion in fact could be gearing up for a strong finish to the year…keep in mind, as well, that the U.S. Dollar Index is showing weakness – it has broken below a 2.5-year uptrend on the weekly chart, a significant technical development that lends support to the bullish case for both the Venture and Gold…

Today’s Markets

China’s Shanghai Composite surged 29 points or 1.3% overnight to close at 2221 following better-than-expected economic data…China’s economy is showing fresh signs of vigor as an initial gauge of manufacturing activity (HSBC’s flash PMI of small and medium-sized firms) hit a 6-month high of 51.2 in September, thanks to strong domestic and foreign demand…the improved reading reinforced expectations that the economy is continuing to gain strength after its weak first half and that the 2nd quarter was the bottom for the year…“Strong new orders suggests that this recovery has some legs, so it probably will continue at least into year-end if not beyond.  I would stay tuned for more upside surprises on growth for China,” said Frederic Neumann, managing director and co-head of Asian economics research at HSBC…

European shares were down modestly today…German Chancellor Angela Merkel and her Christian Democratic bloc scored a convincing election victory over the weekend, but Merkel’s party nonetheless fell just short of an absolute majority and will need a left-leaning coalition partner to govern Europe’s biggest economy…

Business activity in the euro zone continues to pick up as new orders flood in at their fastest pace in more than 2 years, surveys showed today…the region’s economic recovery is becoming more broadly based…

North America

The Dow is down 35 points through the first hour of trading today…the forward P/E ratio for the S&P, which is up 20% so far this year, is now at its highest (14.94) since early 2010, and that has some analysts concerned – especially considering that the expected profit growth for 2013 (6%) is far below the sizzling 31% achieved in 2010 when company earnings were improving rapidly as business activity rebounded from the depths of the recession…for the 3rd time in as many years, the U.S. government is caught up in a budget impasse that could force a government shutdown (which might not be such a bad thing)…Congress faces an October 1 deadline – the current fiscal year ends on September 30 – to pass a budget or shut down the government…assuming a budget is passed, the nation’s debt ceiling must also be raised or the Treasury will hit the borrowing limit sometime in October…somehow they’ll manage to sort things out (the circus act will be entertaining as usual) but the federal debt will continue to pile up…

The TSX is off 3 points while the Venture is up 3 points as of 7:30 am Pacific…Fission Uranium Corp. (FCU, TSX-V) and Alpha Minerals Inc. (AMW, TSX-V) announced this morning the discovery of a 5th zone of high grade uranium mineralization with off-scale radioactivity at Patterson Lake South…the breadth of near-surface mineralization – 76 metres – and the location of this zone (halfway between R390E and R780) – are both important…“This narrowing of the distance between zones is continued proof that PLS is host to a mineralized system of considerable size and strength,” stated FCU President and CEO Ross McElroy…

North American Nickel Inc. (NAN, TSX-V)

We’re continuing to keep a close eye on North American Nickel Inc. (NAN, TSX-V) which pushed through important resistance last week at 30 cents…the company has intersected significant nickel sulphide mineralization in several holes at its 100%-owned Maniitsoq Nickel-Copper-Cobalt and PGM Project in southwest Greenland, and assays are pending…the key for NAN, of course, will not only be high grades, which it appears they have, but tonnage potential – that’s what investors will be gauging…NAN is up 1.5 cents at 43.5 cents through the first hour of trading today…below is a 2.5-year weekly chart…the next Fib. level shows as 51 cents…

Canada Carbon Inc. (CCB, TSX-V)

Canada Carbon (CCB, TSX-V) enjoyed a strong week last week, climbing 25%, as the company reported continued exploration progress from trenching and drilling at its Miller hydrothermal lump/vein graphite project in Quebec…technically, 36 cents is an important resistance level as shown on John’s 3-year weekly chart…RSI(14) is in overbought territory at 81%, so an unwinding of that condition can be expected at some point – the big question, of course, is when…the project, however, appears to have merit and is being advanced, so investor interest in CCB should remain high in the coming weeks and months…as always, perform your own due diligence and be prepared for volatility in this play, as in others…CCB has gained a penny-and-a-half to 36.5 cents through the first hour of trading today…

Colorado Resources Ltd. (CXO, TSX-V) Updated Chart

Colorado has been beaten up since its last drill results came out at the end of August, but drilling at North ROK of course continues…keep in mind that this Copper-Gold porphyry system still looks productive based on results from 13 holes released to date…this is still early in the game, and the possibility of another stellar hole is very real as geologists get a better handle on the geometry of North ROK…this stock has shown a lot of volatility in recent months with astute traders buying into weakness and selling into strength…CXO appears to be building a solid base near current levels where there’s long-term technical support as shown on John’s 3-year monthly chart…will CXO give investors an October surprise that they will cheer?…anything is possible, and it would certainly be good for the Venture if CXO can get back on track by repeating numbers they first reported at the end of April…as of 7:30 am Pacific, CXO is off half a penny at 43.5 cents…

Updated Silver Charts

6-Month Daily Chart

11-Year Monthly Chart

Note: John and Terry do not hold share positions in FCU, AMW, CCB, NAN or CXO.  Jon holds share positions in NAN and CXO.