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Gold has traded in a range between $1,314 and $1,329 so far today, following yesterday’s powerful move…events on Capitol Hill this week have demonstrated yet again to investors that Washington just isn’t serious about tackling its deficit and debt problems, and the growing consensus is that the Federal Reserve is now not likely to begin tapering until well into 2014 due to political and fiscal dysfunctionality in the U.S. capital…President Obama wants to blame everything on “ideological” Republicans, but that’s an argument we’ll leave for another day…one benefit to having Obama in power is that, overall, he has provided a great boost for Gold since taking over the White House in January, 2009…the Fed’s hands are tied – their next step might actually be to ramp UP quantitative easing as opposed to trimming it back  – and they will cite continued weak employment growth (thanks in part to Obamacare which is hurting full-time job numbers) and a challenging fiscal and political environment…Congress is clearly headed for another major showdown early in the New Year…

As of 7:45 am Pacific, Gold is down $2 an ounce at $1,320…Silver is 9 cents higher at $21.98…Copper has added 2 pennies to $3.28…Crude Oil is up 38 cents at $101.05 while the battered U.S. Dollar Index has slipped further to 79.59…

The U.S. Mint’s web site shows that American Eagle bullion coin sales are at their highest level since July, with 1-ounce coin sales already double the amount that was sold in August and September…as of 2 days ago, 20,500 1-ounce American Eagle bullion coins were sold for the month vs. only 8,500 in September and 9,000 in August…

Another factor helping Gold yesterday was news that a Chinese rating agency downgraded U.S. debt overnight Thursday…Dagong Global Credit Rating trimmed the U.S. by 1 notch to A-minus from A, saying the agreement in Washington does not defuse worries about the U.S. deficit or improve the country’s ability to repay over the long-term…

China Reverses First Half Slowdown

China’s economy expanded 7.8% in the 3rd quarter from the same period a year earlier, marking an acceleration from the 2nd quarter when it grew 7.5%…the rebound in the world’s 2nd-largest economy was largely the result of government efforts to shore up growth with looser monetary policy and a “mini-stimulus” of investment in infrastructure such as rail and subway systems…the big question is whether this rebound can be sustained in the coming quarters…a raft of monthly data released today by China’s National Statistics Bureau showed growth in industrial activity, retail sales and fixed asset investment slowed slightly in September compared with previous months…many economists believe the Chinese economy faces several fundamental challenges over both the short and long-term including major structural reforms the government will have to implement…

China & Base Metals Demand

China is expected to become a bigger market for base metals by 2017 than the rest of the world combined, accounting for 52% of global demand, advisory firm Wood Mackenzie stated in its latest base metals demand forecast issued today…China’s demand for base metals is currently at around 46% of the 96-million tonnes produced globally…“Our forecasts for the next 5 years show that across all of the base metals – Aluminum, Copper, Lead, Nickel and Zinc – growth in demand will come predominately from China,” stated Helen Matthews, Wood Mackenzie head of base metals market research…demand growth in the next 5 years would not be as fast as the previous 5 years have been, owing to weaker GDP growth in China, but Matthews stressed that demand would only be slower and not lower…“Demand growth has slowed from the double digits we saw from 2008 to 2013 to single digits – ranging from 5% to 8% – however, it’s important to note that in absolute tonnage terms we still see significant numbers.”

Today’s Markets

Asian markets were mostly higher overnight with China’s Shanghai Composite finishing 5 points higher to close the week at 2194…the pan-European Euro Stoxx 600 Index was at levels today not seen since June 2008 with all key European indexes and sectors in positive territory…

The S&P 500 hit another new new all-time high this morning (it topped its September 19 high with a strong close yesterday), thanks to upbeat earnings...Google topped the $1,000 mark for the 1st time ever this morning…as of 7:45 am Pacific, the Dow is off 22 points…the Labor Department said yesterday that it would release its report on September employment next Tuesday, as it provided a fresh schedule for some of the economic data that was postponed due to the partial government shutdown…

In Toronto, the TSX is up 61 points through the first 75 minutes of trading today after touching 13000 yesterday for the first time in more than 2 years…Canada and the European Union have reached an agreement in principle on a free-trade deal that will give Canadian businesses preferential access to an EU market of 500 million consumers and lead to what should be cost savings for consumers – this is an important, historic agreement…the Venture, meanwhile, is off a point at 951 after a powerful move yesterday…let’s take a look at some charts…

The TSX has finally busted through stiff chart resistance at 12900, as you can see in John’s 2.5-year weekly chart, and this important breakout certainly bodes well for the rest of Q4…

TSX 2.5-Year Weekly Chart

The Venture held critical support this week in the 920’s, and may now finally be ready to power through – or at least grind its way through – a strong resistance band between 955 and 970…from all we can discern technically, the Venture is set for “lift-off” during this last half of October…

Venture Exchange 3-Month Daily Chart

Kootenay Silver Inc. (KTN, TSX-V)

There are some interesting Silver plays worth watching closely at the moment, Kootenay Silver (KTN, TSX-V) being one of them…KTN commenced a minimum 5,000-metre drill program last month with 2 drill rigs as part of a continuing resource expansion initiative at its flagship Promontorio Silver Project in Mexico…drilling is targeting a series of high-grade Silver intercepts recently identified within a new breccia zone of Silver mineralization situated between the Pit and Northeast zones as reported by the company in June…Promontorio contains a combined measured and indicated Silver resource of 92.4 million Silver equivalent ounces (39.9 million ounces Silver, 508,000 ounces Gold, 394.8 million pounds Lead and 462.2 million pounds Zinc) and an additional 26.8 million Silver equivalent ounces in the inferred category (12.8 million ounces Silver, 147,000 ounces Gold, 99.5 million pounds lead and 109.1 million pounds zinc, see company’s Sept. 18 news release for details)…

KTN has no debt and reported $8 million in working capital at the end of June…it has 62 million shares O/S for a total market cap of $40 million based on the last close at 65 cents…the stock hit a 3-year low of 54 cents in August but has strong support and has been basing in a horizontal channel between 62 and 75 cents since then…with a resource as well as potential exploration upside in the immediate future, KTN is well-positioned to move higher this quarter in the event Silver prices continue to firm up…

Garibaldi Resources Corp. (GGI, TSX-V) – Grizzly Plus Mexico Gives GGI Powerful 1-2 Punch

Kootenay’s Promontorio Project is just several kilometres south of Garibaldi Resources‘ (GGI, TSX-V) Tonichi Project in Sonora…Tonichi has a diversity of mineral deposit opportunities for GGI, and the company has been generating monthly royalty income since February from a pilot coal program there…in addition, assay results are pending from 6 holes recently completed at the Locust target in the northern section of Tonichi…GGI President and CEO Steve Regoci says the company is now beginning to bear the fruits of a few years of systematic due diligence and exploration at Tonichi which has narrowed down the most prospective areas in a 500 sq. km land package (click on the forward arrow to listen to this 2-minute excerpt – requires Adobe Flash Player version 9 or above):

[audio:https://e8d59e.a2cdn1.secureserver.net/wp-content/uploads/2013/10/Regoci-GGI-Mexico-Clip-1.mp3|titles=Regoci GGI Mexico Clip 1]

We’ll have more from Regoci on GGI’s Tonichi Project and other Mexican opportunities Monday, including the very interesting La Patilla Gold Property that could rapidly emerge as a major catalyst for GGI in Mexico…in British Columbia, of course, Garibaldi is in the heart of what’s emerging as the province’s most exciting new exploration camp – the Sheslay Valley – and more results are pending from GGI’s exploration program launched at the Grizzly last month…GGI holds the largest land position (175 sq. km) of any junior in the area…with a market cap just modestly above its strong working capital position ($4 million), no warrants, no financing paper to hurt the market, monthly cash flow and a pipeline of exciting properties, the short-term and long-term prospects for GGI have to be considered extremely positive…

Prosper Gold (PGX, TSX-V) has assay results pending from its 4th, 5th and 6th holes drilled at the Sheslay, and Doubleview Capital Corp. (DBV, TSX-V) starts drilling Monday at its Hat Property, contiguous to the eastern borders of the Sheslay and the Grizzly…we’ll have more on the Sheslay Valley situation Monday and the incredible opportunity it presents for investors…

Fission Uranium Inc. (FCU, TSX-V) Updated Chart

On the subject of discovery plays, one of our favorites continues to be Fission Uranium (FCU, TSX-V) with its PLS Property in Saskatchewan…Fission released more results yesterday and the stock climbed 11 cents on strong volume to close at $1.14…as of 7:45 am Pacific, FCU is off a penny at $1.13…consider the recent pullback an early Christmas gift…

Note: John and Jon hold both share positions in GGI while Jon also holds a share position in PGX.