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Gold has traded between $1,278 and $1,292 so far today…as of 8:30 am Pacific, bullion is up $8 an ounce at $1,284…Silver has gained a dime to $19.45…Copper is unchanged at $3.21…Crude Oil has added 73 cents to $94.08 while the U.S. Dollar Index is off slightly at 82.52…

The central banks of Russia and Kazakhstan continued to boost their Gold holdings in July, suggesting emerging markets remain committed to bolstering their reserves of the precious metal despite a pullback in its value…Russia, one of the world’s biggest holders of Gold, increased its official reserves by nearly 340,000 troy ounces in July, to 35.5 million ounces, according to data today from the International Monetary Fund…Kazakhstan’s central bank, which has also become an active buyer of Gold in recent years, raised its official reserves by 45,000 ounces last month, to 5.1 million ounces, according to the data…

As Gold prices hover around 2-month lows, demand in Asia has started edging higher with buyers in India increasing purchases ahead of a Hindu religious festival this week…the premium in India has climbed to $10 to $13 a troy ounce from zero in July, a sign that appetite for Gold is picking up in the world’s second-largest consumer of the precious metal, according to a report in this morning’s The Wall Street Journal…Prithviraj Kothari, vice president of Indian Bullion and Jewellers Association, said Gold imports in August will likely total 40 metric tons but are expected to rebound to June’s level of around 70 tons in September.  “Everybody was fearing that a bad monsoon will hit the festival demand. Fortunately, the monsoon has picked up and it is not so bad,” he said.  “The majority of India’s Gold demand comes from rural areas and therefore, the monsoon plays a big part in purchases.”

The behavior of the Venture is telling us that a breakdown in Gold is simply not in the cards…the Venture has broken above a short-term downtrend in place since early last month, and the longer-term recovery remains firmly intact with rising 200 and 300-day moving averages…in that kind of environment, Gold has always held up and performed well…the series of higher lows the Venture has put in since early this year, including 989 August 15, have been supported by its 200-day SMA…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 22 points or 1% overnight to its lowest levels in over two weeks due to a sell-off in the airline space…meanwhile, Japan’s Nikkei lost 92 points to close at a one-week low just a day after hitting its highest level in over three weeks…

Europe

European markets are up significantly today…ECB President Mario Draghi has helped sentiment in the region after he sent out a dovish message over the weekend at Jackson Hole…many analysts now believe that a major QE program is closer to being announced…

North America

The Dow is up 76 points as of 8:30 am Pacific…the S&P 500 crossed the 2000 level for the first time ever yesterday and is extending those gains this morning…U.S. consumers continued to feel extremely optimistic in August, according to the latest data from the Conference Board, adding to July’s massive gains…the board said this morning that its monthly Consumer Confidence Index rose to 92.4, from July’s revised reading of 90.3 – the highest level of consumer confidence since October 2007…

Orders for big-ticket manufactured goods in the U.S. surged in July to a record thanks to a jump in aircraft purchases (Boeing reported taking orders for a record 324 plans last month), though underlying readings showed softening business spending last month…purchases of durable goods-products like airplanes, cars, and heavy machinery that are designed to last at least three years rose a seasonally adjusted 22.6% to $300.1 billion in July from the prior month, the Commerce Department said this morning…that was the sharpest increase and highest level in a data series dating back to 1992…excluding transportation, orders fell 0.8%, though the prior month’s gain was revised up to 3%…

The TSX is up 31 points while the Venture has added 4 points to 1012…with the Venture there’s is a band of Fib. resistance between 1010 and 1020, but we expect the Index to work through this over the next week or so…

Copper Updated Chart

Copper has looked strong since tumbling just below $2.90 a pound in March…since then, the metal has been climbing in an upsloping channel…it seems likely that Copper will once again test the top of this channel and key RSI(14) resistance at 60%…that’s when the big test will come – if Copper can push through that (resistance in the $3.30’s right up to the $3.40 area which has been challenged three times since last year)…

Crude Oil (WTIC) Updated Chart

Crude Oil has taken a pounding since late June (a contributing factor to the Venture’s mini-pullback), and a clear signal that trouble was on the way came when RSI(14) on this 1-year weekly chart broke below an uptrend line in place since last year…that’s why it’s so important to keep an eye these trend lines…however, look for Crude Oil to find exceptional support around the $92 Fib. level…

Discovery Ventures Inc. (DVN, TSX-V) Update

We’ve been very excited about the prospects for Discovery Ventures (DVN, TSX-V), especially following the important breakout above the 23-cent level in early June – an area that has since held as important support…John’s TA has been bang-on here, as it has with numerous other situations…

Yesterday, DVN announced it recently filed an application with the Ministry of Mines to conduct underground exploration activities at the Willa deposit including percussion drill sampling of the mineralized zones…new composite samples will be submitted for detailed metallurgical testing and characterization of concentrates and tailings products…this is a high-grade Gold-Copper system with measured and indicated resources of 758,000 tonnes grading 6.7 g/t Au, 0.85% Cu and 12.5 g/t Ag…what can make this project really fly is DVN’s acquisition of the nearby Max mine and mill facilities – there is very powerful synergy between the two as reflected in DVN’s highly encouraging PEA for Willa-Max released near the end of May…

DVN’s overall technicals remain very positive as per John’s updated 2.5-year weekly chart…DVN is off half a penny at 34 cents through the first two hours of trading…

Ascot Resources Ltd. (AOT, TSX-V) Update 

There are some exciting things happening at Ascot Resources‘ (AOT, TSX-V) Premier Property near Stewart as we pointed out recently, and yesterday AOT climbed another 23 cents to close at $2.08…refer to yesterday’s post for more information on the current drilling and the latest results…

The geological possibilities with this high-grade play are exciting, and we’ll be keeping a very close eye on developments at Premier in the coming weeks…technically, the stock is obviously vulnerable to a pullback at some point soon if for no other reason than the fact it has advanced for 7 straight sessions…certain investors, we’re sure, will use any weakness as an accumulation opportunity as this situation looks potentially quite prolific…as always, perform your own due diligence…

Below is a 1-year daily AOT chart…in the event of any pullback, it’ll be interesting to see if the previous measured Fib. resistance level ($1.90) holds as new support…in bullish situations like this, often the 10-day SMA will provide strong support, so watch for that too…

AOT is off 8 cents at $2.00 as of 8:30 am Pacific…

Contact Exploration Inc. (CEX, TSX-V) Update

One of our favorite oil and gas plays since last year continues to be Contact Exploration Inc. (CEX, TSX-V)…last week, the company reported that drilling at three new Kakwa (Alberta Montney) wells was successfully completed and the company expects to announce the initial 30-day production volumes from the new wells in due course (CEX holds a 25% working interest)…CEX remains very active on other fronts in the Montney…

Contact experienced significant growth during its 2014 fiscal year ended March 31, with petroleum and natural gas revenues more than doubling and total assets increasing by more than 50% when compared with the 2013 year-end…net income was $2.8 million compared to $2 million the previous year and a loss of $4 million in 2012…so things are headed in the right direction…

A successful strategy with CEX over the last year has been to buy at or near the bottom of this very impressive upsloping channel…as of 8:30 am Pacific, CEX is up 2 cents at 48 cents on strong volume…

 

Note:  Jon holds a share position on DVN.