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Gold has traded between $1,249 and $1,263 so far today as the Fed begins its two-day policy meeting…most analysts expect the Fed to cut back modestly again on QE, despite the weak December payrolls number, and bullion in our view has largely priced that in…yesterday, Gold hit a 9-week high in early trading before reacting at $1,275 resistance which includes a long-term downtrend line…that’s a critical level the bulls need to conquer, preferably by the end of this week, to keep the recent momentum in their favor…as of 7:30 am Pacific, Gold is down $4 an ounce at $1,253…Silver is off 13 cents at $19.56…Copper has added 2 pennies to $3.28…Crude Oil has surged $1.67 a barrel to $97.39 while the U.S. Dollar Index is up slightly at 80.57…

In its latest Global Gold Hedgebook analysis, prepared by Thomson Reuters GFMS, the Corporate and Investment Banking Division of Societe Generale (SocGen) notes that the outstanding global hedge book at the end of September only stood at 2.94 million ounces (92 tonnes), the lowest volume since the quarterly hedge book analysis reports were initiated in 2002…

Managed-money accounts raised their Gold futures and options net-long positions for the fourth consecutive week according to the latest COT data as of January 21…large speculators have increased their net-long positions for five straight weeks…commercials added more gross longs than gross shorts…Barclays stated, “Speculative positioning has slowly edged higher and is now at its highest since mid-November. Although net-non-commercial positions are relatively positive, gross longs and shorts are not aggressively elevated in either direction, suggesting scope for significant moves following the FOMC meeting this week.”

Today’s Markets

Efforts by emerging-market central banks to counter a vicious market sell-off in recent days brought a measure of calm today…

Asia

China’s Shanghai Composite stabilized overnight, gaining 5 points to close at 2039, following yesterday’s 1% decline after the People’s Bank of China (PBOC) injected funds into interbank markets, soothing fears over a new liquidity crunch…it was also reported that Chinese industrial profits rose an annual 6% in December, slower than November’s 9.7%…Japan’s Nikkei slipped 26 points to finish at 14980…

Europe

European markets are in strong positive territory in late trading, bouncing back from yesterday’s losses…the British economy recorded its fastest annual growth rate in 2013 since the start of the financial crisis, with full-year growth up 1.9% from just 0.3% in 2012…meanwhile, an upbeat German Ifo business confidence index report was released yesterday Monday…the index hit its highest level in two-and-a-half years and continues a string of encouraging economic data coming out of the EU…

North America

After five straight declining sessions totaling 621 points or 3.8%, which put RSI(2) at an extreme low not seen since a great buying opportunity in mid-December, the Dow is up 70 points as of 7:30 am Pacific…

An overwhelming 87% of the 45 top money managers, investment strategists and professional economists who responded to this month’s CNBC Fed Survey expect the Fed to taper by an average of $9.87 billion when the central bank’s policy decision is announced tomorrow…

President Obama will lay out his agenda for the year tonight in his State of the Union Address before a nation increasingly worried about his abilities, dissatisfied with the economy and fearful for the country’s future, according to a just-released Wall Street Journal/NBC News poll…since the rise of modern polling in the 1930’s, only George W. Bush has begun his sixth year in the White House on rockier ground than Obama…

The TSX has climbed 55 points as of 7:30 am Pacific while the Venture is up a point at 953…the combined 32-point drop in the Venture Friday and yesterday doesn’t concern us in the least – in fact, it was a healthy pullback after the Index posted gains in 19 out of the previous 22 sessions which included a 13-session winning streak, the longest in many years…

Below is a 6-month daily Venture chart from John showing strong support levels and an RSI(14) that has largely unwound an overbought condition over the last two trading days…

Sheslay Valley Area Heating Up

It should come as no surprise that all of northwest B.C. is a very hot topic of conversation at the “Roundup” in Vancouver that started yesterday and continues through Thursday…

Information from the B.C. Ministry of Mines web site shows a pick-up in staking activity in the Sheslay Valley area with Romios Gold (RG, TSX-V) also announcing yesterday that it has acquired a 2,800-hectare position…the mineral tenures acquired by Romios, as the company stated, are in two blocks with the northerly claim staked along the southern edge of a long airborne magnetic anomaly and the southerly claim staked over another large circular airborne magnetic anomaly, with both anomalies resembling the geophysical anomaly covered by Doubleview Capital Corp.’s (DBV, TSX-V) Hat property…

Action in the Sheslay Valley is going to continue to intensify in our view given the recent Cu-Au porphyry drilling discovery (widely spaced holes, increasing grades with depth) by Doubleview, excellent results delivered by Prosper Gold Corp. (PGX, TSX-V) last summer and fall at its Sheslay Project, and the highly prospective 175 sq. km Grizzly land package being explored by Garibaldi Resources Corp. (GGI, TSX-V)…also what’s very interesting is the huge 600 sq. km block (the Eagle Property) held by Teck Resources Ltd. (TCK, TSX) contiguous to the southern boundary of the Grizzly…Teck staked that ground in 2011 and has been more active on it than many had believed…assessment and historical reports show intriguing geological and geophysical similarities between the northern half of the Eagle and all the ground held for another 10+ km to the north and northeast by GGI, DBV and PGX where a series of parallel trends strike NW/SE…in short, the possibility of the under-exploited Sheslay Valley turning into another world class B.C. discovery area and future mining camp, as we speculated last year, has to be considered very real, and we’ll be expanding on that theory in the days ahead…

In the meantime, DBV and GGI continue to look very strong technically…a confirmed major breakout above a bullish downsloping flag has occurred in GGI as shown in this 3.5-year weekly chart from John…as of 7:30 am Pacific, GGI is unchanged at 16 cents…

Doubleview Capital Corp. (DBV, TSX-V) Updated Chart

Doubleview hit an all-time high last week after reporting its discovery at the Hat Property, approximately 9 km to the southeast of Prosper’s Star target that was drilled last summer…the fact that this hit is that distance away from the Star shows how potentially “pregnant” this entire system is…technically, DBV’s immediate challenge is to overcome Fib. resistance at the 15-cent level…below is a 3-year weekly chart that overall holds great promise…as of 7:30 am Pacific, DBV is up another penny at 16 cents…

Keep in mind, of course, that Fib. resistance and target levels are not price targets – just theoretical levels based on Fib. and technical analysis…as always, perform your own due diligence…

Red Pine Exploration Inc. (RPX, TSX-V) Drills 27.5 Metres Grading 8% Zn At Cayenne-Chili Property

Red Pine Exploration (RPX, TSX-V) reported initial drill results this morning from its Cayenne-Chili Project in the Porcupine Mining Division, 110 km southwest of Timmins…some encouraging near-surface values were encountered but figuring out this system at depth is the challenge…the company drilled its first three holes in late December to follow-up on mechanized trenching last summer that exposed an area of massive sulphides…hole CC13-01 returned 27.47 m grading 8.02% Zn, 0.34% Cu, 1% Pb and 8.48 g/t Ag from 11 to 38.47 m…hole CC13-02 cut a 16.44 m intersection grading 3.63% Zn, 0.35% Cu, 0.58% Pb and 3.20 g/t Ag…hole CC13-03 was drilled 120 m to the northeast and returned 30 m of 0.50% Zn stockwork material…early interpretation of electromagnetic and down-hole IP surveys suggests that the mineralization is plunging to the west along strike…drilling has resumed at the property and the company expects to complete another 10-15 holes by the end of February…RPX, which has a lot of shares outstanding (nearly 200 million), is down a penny at 9.5 cents through the first hour of trading…

Wellgreen Platinum Ltd. (WG, TSX-V)

The 2014 outlook for Platinum is quite bullish, according to many analysts, and this helps explain the recent activity in Wellgreen Platinum (WG, TSX-V) – formerly Prophecy Platinum – which has broken out of a 10-month horizontal channel…the company’s advanced-stage, past producing Wellgreen Project is in southwestern Yukon…an updated PEA is due within a few months…below is a 2-year weekly chart…WG is up 3 cents at 96 cents as of 7:30 am Pacific…

Azincourt Uranium Inc. (AAZ, TSX-V) Updated Chart

Note: John and Jon both hold share positions in GGI.  Jon also holds share positions in DBV and PGX.