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Gold slipped as low as $1,309 overnight but is now trading near its high of the day, up $3 an ounce at $1,318 as of 5:00 am Pacific…Silver is up 4 pennies at $21.70…Copper is flat at $3.24…Crude Oil is off 20 cents at $94.42…WTIC is near a 4-month low amid speculation that U.S. inventories increased for a 7th straight week…the U.S. Dollar Index, meanwhile, is essentially unchanged at 80.58…

Bullion has fallen for the past 5 trading sessions and a 6th consecutive daily drop would be the longest losing run since May…physical demand from 2 key players – China and India – has been soft in recent days, according to reports…

Holdings in Gold-backed ETP’s fell 0.3 metric tons to 1,875 tons yesterday, remaining at the lowest since April, 2010, according to data compiled by Bloomberg…

“Jim Sinclair’s $50,000 Gold Call – Let’s Hope It Doesn’t Happen” – interesting article yesterday by Lawrence Williams at www.mineweb.com…Sinclair’s current shorter-term predictions are that Gold will hit $1,650 this year, rise to $2,400, fall back and then move up to between $3,200 and $3,500 by the end of 2016…if only we all had a crystal ball…Sinclair says he also sees unprecedented manipulation of prices in the precious metals markets which has been causing distortion, with huge amounts of paper Gold so far being successful in keeping the Gold price down…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite overcame early weakness to close 8 points higher at 2157…trading in Japan resumed after a public holiday yesterday, and the Nikkei average climbed 24 points to finish at 14225…Japan’s monetary base grew 45.8% in October from a year earlier to 186.87 trillion yen, hitting a record high for the 8th straight month as the Bank of Japan kept pumping money into the financial system to beat deflation under its ultra-loose monetary policy, the central bank said yesterday…eventually, how can this not have important ramifications?…

European equities came under moderate pressure today after the European Union’s Commission released a relatively subdued outlook for the economy in its Autumn forecast…

Stock index futures in New York as of 5:00 am Pacific are pointing toward a slightly lower open on Wall Street…

Signs Of More Structural Reform In China

A report from Associated Press says Chinese leaders have ordered local officials to stop expanding industries such as steel and cement in which supply outstrips demand, a cabinet statement says, in a sign previous orders to cut overcapacity were ignored…Beijing has been trying since 2009 to cut excess production capacity, which has triggered price-cutting wars that threaten the financial health of some industries…but lower-level leaders whose promotions depend on economic development have continued to support local industries…in a video conference yesterday, planning officials warned local leaders to stop ignoring orders to reduce overcapacity in industries including steel, cement, aluminium and glass…“Those who still violate discipline will be heavily punished,” said the deputy director of the cabinet planning agency, the National Development and Reform Commission, Hu Zucai, according to the government newspaper China Daily…

Many Americans Already Perceive China As World’s Dominant Economic Power

More than one quarter of Americans currently perceive China as the world’s dominant economic power, according to a new survey (GfK North America with TheStreet), a reflection of the changing global order…while China’s economic strength has been on the rise, particularly over the last decade, the size of the mainland economy at $8.23 trillion is just over half that of the U.S. at $15.68 trillion, according to 2012 GDP data…however, China is seen overtaking the U.S. as the world’s largest economy by 2030, according to the National Intelligence Council, an analytical arm of the U.S. government’s Office of the Director of National Intelligence…

U.S. Dollar Index Updated Chart

The direction of the U.S. Dollar Index is critical to both Gold and the Venture Exchange…recently, the Index found support as expected at 79 before rebounding and challenging resistance at 81 yesterday…it may challenge that resistance again in the coming days…the major pattern remains bearish, however, in particular due to the breakdown in September of the 2.5-year uptrend on the weekly chart…a bearish downsloping channel has now developed, and that’s likely to keep the Dollar Index under pressure…this suggests the Fed will likely maintain the pace of its current bond buying program well into 2014, longer than most pundits are now predicting…

Venture – U.S. Dollar Index Comparative Chart

The very close correlation between the Venture and the U.S. Dollar Index means investors in the junior exploration sector must keep a close eye on the direction of the greenback…below is a 15-year monthly CDNX-U.S. Dollar Index comparative chart…any major weakness in the Dollar Index (i.e., a break below strong support at 79) would give the Venture a much-needed boost…

Fission Uranium Corp. (FCU, TSX-V) Update

Fission Uranium (FCU, TSX-V) announced yesterday the discovery of a 6th mineralized zone at PLS, a significant step-out (525 metres) west of the initial discovery zone…PLS has been expanding rapidly eastwards, so hole PLS13-118 (21.5 m total composite mineralization) to the west is an important development in terms of the potential scale of this project…additional drilling will focus on this new zone…

FCU gained 6 cents yesterday on the news to close at $1.09…volume was nearly 1 million shares (all exchanges)…technically, FCU has been under some pressure in recent weeks but very strong support exists from 96 cents…yesterday, the stock climbed back above its still-rising 100-day moving average (SMA) at $1.07…

Investor patience with FCU should be rewarded…this is a very strong play in every respect…below is a 6-month daily chart from John…

Azincourt Uranium Inc. (AAZ, TSX-V) Update

Azincourt Uranium (AAZ, TSX-V), which has joint-ventured PLS North with Fission, continues to perform well…yesterday, AAZ broke above resistance at 33 cents, closing at 34 cents…this breakout requires confirmation today…for short-term traders, the time to accumulate aggressively was when this was in the low-to-mid 20’s, as John’s charts were showing…the low-to-mid 30’s could become new support…

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

Probe Mines (PRB, TSX-V) has consistently out-performed Gold and the TSX Gold Index since the late spring, and we see no reason why that trend won’t continue as the company’s promising Borden Lake deposit continues to evolve…at some point before year-end, it seems likely that PRB will push through resistance around $2.20 and start a fresh move higher…fundamentally and technically, this is another strong play…PRB closed yesterday at $2.16…

Note: John, Terry and Jon do not hold share positions in FCU, AAZ or PRB.