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Gold has traded between $1,281 and $1,295 so far today…as of 7:50 am Pacific, the yellow metal is down $4 an ounce at $1,286 in advance of tomorrow’s important U.S. non-farms payrolls report…Silver is off 13 cents at $19.84…Copper is down 2 pennies at $3.01…concerns about China’s economic outlook overwhelmed short-lived fears of supply disruptions (not expected) following a large earthquake in Chile that gave the metal a boost yesterday…Crude Oil is relatively flat at $99.57 while the U.S. Dollar Index has shot up one-quarter of a point to 80.47…

Gold premiums in India are expected to fall from current levels of about $30 an ounce after the central bank indicated it is considering removing some of the curbs to trade that have crippled imports…India, the second biggest consumer of Gold after China last year (perhaps the biggest if you include smuggling), imposed a record 10% import duty on the metal and said a fifth of all shipments should be re-exported as finished product to help narrow its current account deficit (CAD)…but the recent easing of the CAD has given Finance Minister P. Chidambaram and the head of the central bank, Raghuram Rajan, the space to consider lifting the restrictions on Gold…“I think what we have to do is slowly and steadily take actions to remove some of these curbs,” Reserve Bank of India (RBI) Governor Rajan told analysts yesterday according to a report from Reuters…

ECB Holds Steady

Following its monthly monetary-policy meeting today, the European Central Bank said it would leave interest rates on its main refinancing operation at 0.25%…the ECB also left rates on its marginal lending facility and the deposit facility unchanged at 0.75% and 0%, respectively…amid fresh concerns regarding a potential deflation problem in the euro zone, some market watchers expected the ECB might introduce QE measures as early as today…on Monday, Eurostats reported that annual consumer inflation fell to 0.5% in March, a drop from February’s reading of 0.7%, and the lowest level since November 2009…at a news conference following this morning’s policy decision, ECB President Mario Draghi stated, “The Governing Council is unanimous in its commitment to using all unconventional instruments within its mandate in order to cope effectively with risks of a too-prolonged period of low inflation…we do not exclude further monetary policy easing and we firmly reiterate that we continue to expect the ECB interest rates to remain at present or lower levels for an extended period of time.”

China Unveils Mini-Stimulus Plan

China’s leaders have unveiled a mini-stimulus aimed at shoring up sputtering growth…under the measures announced yesterday by Premier Li Keqiang, small businesses will get bigger tax breaks, social housing will be built to replace shantytowns and railway construction will be sped up…Capital Economics said in a commentary that Beijing’s latest steps are “simply reheated versions of previous announcements.” At most, some previously planned spending will occur sooner, and this suggests officials don’t believe China’s economic situation is as dire as financial markets fear, the report said…some analysts are expecting more stimulus in the near future in the form of looser monetary policy, such as a cut in bank reserve requirements…

Today’s Markets

Asia

China’s Shanghai Composite gave up 15 points overnight to close at 2044…Japan’s Nikkei climbed 126 points to finish at 15072…

Several emerging Asian equity markets enjoyed a stellar first quarter of 2014…Indonesia surged 22.7%…Thailand jumped nearly 8% while India was up 10.2%…GDP for emerging markets is on pace to expand 5.1% this year, twice as fast as the major developed economies including the U.S., Europe and Japan, which are expected to grow an average of just 2.2%…

Europe

European shares are generally higher in late trading overseas following the ECB announcement and Draghi’s news conference…

North America

The Dow is off 15 points as of 7:50 am Pacific…the number of Americans filing new claims for unemployment benefits rose more than expected last week, but the underlying trend continued to point to some strength in the labor market…initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 326,000, the Labor Department said today…the four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, nudged up just 250 to 319,500…

The TSX is off 82 points as of 7:50 am Pacific while the Venture is off 1 point at 1005…

TSX 5-Year Weekly Chart

An “awareness chart” from John…this 5-year TSX weekly chart shows a market with an increasing likelihood of a pullback – exact timing is uncertain of course, but there are some similarities between current conditions and what was witnessed in late 2010/early 2011…this could merely mean we’re getting close to another mini-correction to the rising 50-day moving average (currently around 14100), which has provided tremendous support since last summer, or perhaps a more substantial pullback is in the works to cleanse temporarily overbought conditions…recently, the TSX pushed slightly above the early 2011 high of 14329…

Venture-TSX Gold Index Comparative Chart

Interestingly, since the Crash, the TSX Gold Index has led the CDNX in upside reversals – you can see four instances of this in the chart below (the opposite was true before the Crash)…this is just another technical tool for the investor’s toolbox – it’s safe to assume going forward that strength in the TSX Gold Index will be a very bullish indicator for the Venture…through yesterday, the Gold Index was up 25% from its 149 December low while the Venture was up 17% from its June 859 low…

TSX Gold Index Updated Chart

So where does the TSX Gold Index stand at the moment?…this 10-year monthly chart paints a bullish overall picture…a key breakout level is clearly 210 – the Index tried to sustain a move above 210 last month but failed…this would equate to about 1050 on the Venture…strong support on the Gold Index is in the mid-to-upper 170’s (it recently retested its rising 200-day SMA) while the Venture is underpinned by tremendous support between its rising 200-day SMA, currently around 950, and the mid-980’s…the Gold Index is off 3 points at 183 as of 7:50 am Pacific…

Yamana Gold Jumps Ahead of Goldcorp In Innovative Or “Convoluted” Deal With Osisko

In an attempt to thwart Goldcorp’s (G, TSX) hostile bid, Osisko Mining Corp. (OSK, TSX) has executed a complex deal with Yamana Gold Inc. (YRI, TSX) and two Canadian pension funds that will allow Osisko to operate its flagship Canadian Malartic Gold mine in Quebec...Yamana will use cash and its stock to buy a 50% interest in Osisko’s mining and exploration assets for $1.37-billion…Osisko will keep the rest of its company…that will give Osisko shareholders cash, an interest in Yamana, and a new common share of Osisko that is worth $3.35 apiece…combining the new Osisko and the Yamana offer, the total per-share value is $7.60 for every Osisko share…that exceeds Osisko’s closing yesterday by 10% and is 20% higher than Goldcorp’s (G, TSX) current cash-and-stock offer of $6.33 a share…as part of the deal, two Canadian pension funds, the Canada Pension Plan Investment Board and Caisse de depot et placement du Quebec, will provide Osisko with a total of $550-million in funding…in return, Caisse will get a stream of 37,500 ounces of Gold a year from Canadian Malartic…the CPPIB will increase its credit facility to Osisko…

The next question is, will Goldcorp come back with a higher offer?…Goldcorp today reported that it is continuing its Malartic mine due diligence process…following a full analysis of due diligence findings, the company will consider its position and apprise its shareholders as to next steps related to its existing offer to acquire Osisko…“Our due diligence team is making progress, and we look forward to completing a full analysis of the team’s findings in due course,” said Chuck Jeannes, Goldcorp President and CEO. “In the meantime we will complete our analysis of the alternate scheme (our emphasis) proposed between Osisko and a number of other parties.” Goldcorp also announced this morning that it has extended its offer to acquire all of the outstanding common shares of Osisko until 5:00 p.m. EDT on April 15, 2014…

InZinc Mining Ltd. (INZ, TSX-V)

InZinc Mining’s (INZ, TSX-V) news caught our attention the other day, which is why John prepared this chart after the close of trading yesterday…it appears INZ has drawn the attention of others, as well, as the stock is up 6 cents at 20.5 cents as of 7:50 am Pacific after hitting a new 52-week high of 22 cents…on Tuesday, the company announced a very positive independent Preliminary Economic Assessment of its 100%-owned Desert West Zinc-Iron-Copper Project in Utah showing an IRR of 23% and a 3.7-year payback…average annual Zinc and Copper production is estimated at 107.9 million pounds and 9.9 million pounds, respectively, with an initial project capital costs of $247 million and good potential for resource expansion…

Below is a 4-year weekly INZ chart from John…technically, a cup-with-handle pattern has formed as you can see below, and what potentially could unfold is a breakout above the cup…as always, perform your own due diligence…Utah is an overlooked state and another situation we suggest our readers check into there is the Goldstrike Project held by Cadillac Mining Corp. (CQX, TSX-V)…

Note: Jon holds a share position in CQX.