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Gold has traded between $1,215 and $1,227 so far today…as of 7:35 am Pacific, bullion is unchanged at $1,223…Silver is off 4 cents at $18.48…Copper is down 3 pennies at $3.13…Crude Oil has retreated 53 cents to $93.89 while the U.S. Dollar Index is down more than one-third of a point to 84.34…

Gold’s slide to an 8+ month low has brought it within sight of a cluster of critical chart support lines near its 2013 low, so the $1,200 area down to the $1,180’s is certainly key from a technical perspective…there are encouraging signs of a slight pick-up in physical demand out of China where premiums have climbed to $5 to $6 an ounce…

Interesting report from Bloomberg this morning…buyers of Silver exchange traded products are betting nearly $12 billion that big speculators are wrong about the outlook for prices, which have drifted to more than a 1-year low…ETP holdings are up 1.5% since mid-July to 19,898.8 metric tons, nearing a record reached in October, data compiled by Bloomberg show…at the same time, money managers shrank bullish wagers by 95%, government data show…to protect against the risk of lower prices, producer Coeur Mining Inc. (CDE, NYSE) has hedged about a third of its output at $18 an ounce – a move that may come back to haunt them…

Retail investors, who account for 80% of U.S. ETP purchases, expect long-term growth to spur industrial demand for Silver in everything from solar panels to electronics…for now, the commodity is the worst-performing precious metal this year…in what’s likely a positive contrarian sign, money managers and other large speculators – often overly bullish or bearish at the wrong time – have reduced their bullish bets on New York Silver for 8 straight weeks, the longest contraction in 17 months, according to the latest COT data…hedge funds have dismantled bullish positions that in July were the biggest since 2010…

“Unlike Gold, buyers of Silver ETFs are not the momentum players,” said Peter Jankovskis, who helps oversee $3.1 billion as co-chief investment officer of Lisle, Illinois-based OakBrook Investments LLC.  “You will see people holding Silver for a much longer period of time compared with Gold,” Jankovskis told Bloomberg.  “Last year, the ETF investors did not flee like you saw in Gold ETFs.”

China is giving foreign investors direct access to its Gold market for the first time today as the largest-consuming nation seeks to exert more influence over prices while boosting the yuan’s global use…the Shanghai Gold Exchange is now trading contracts in the city’s free-trade zone that are linked to its domestic spot market and available to about 40 international members including Goldman Sachs Group Inc. and UBS AG…access was previously limited to some Chinese subsidiaries…

Geopolitics

Australian police have thwarted an alleged ISIS plot to abduct and behead a member of the public as officers detained 15 people in the nation’s largest- ever anti-terrorism operation…authorities carried out the pre-dawn raids in Sydney today after receiving intelligence that a senior ISIS member was urging supporters in Australia to carry out “demonstration killings”, Prime Minister Tony Abbott told reporters…

Today’s Equity Markets

Asia

Asian markets were mixed overnight but China and Japan both posted gains…the Shanghai Composite edged 8 points higher to 2316…Chinese new home prices rose just 0.5% on year in August, compared with July’s 2.5% rise, according to the National Bureau of Statistics…on a monthly basis, prices posted their fourth consecutive decline, exacerbating worries about a correction in the real-estate market on the back of declining sales and a glut of supply…

The Nikkei average climbed 179 points to close above 16000, a new 8-month high as the yen weakened to a 6-year low against the greenback…

Europe

European markets are up significantly in late trading overseas…a lot of eyes are on Scotland where an independence vote is being held today…a total of 4.29 million, or 97% of the electorate, have registered to vote, the largest electorate Scotland has ever seen…the result of today’s historic referendum is expected early tomorrow with the opinion polls in the past two days suggesting it’s going to be extremely close…

North America

The Dow has surged to yet another record high while also passing Fib. resistance at 17150…as of 7:35 am Pacific, the Dow is up nearly 90 points at 17244…

Fed officials yesterday repeated their vow to keep interest rates pinned near zero for a “considerable time” after the central bank ends its stimulus program…some traders worried that removing that language would signal a more hawkish stance on monetary policy…but most officials, 14 out of 17, said they continue to believe the first increase in short-term interest rates will occur in 2015…this is a modest shift from June’s projections, when 12 officials pegged the first rate increase to occur next year…

The International Monetary Fund has become the latest group to warn on risk taking and equity valuations, as prices in “virtually all major asset classes” now look stretched, it stated…following in the footsteps of the Federal Reserve and the OECD, the IMF said pricey valuations coupled with flat volatility are now a cause for concern…

The TSX is off 12 points while the Venture is down 1 point at 972 as of 7:35 am Pacific…

U.S. Dollar Index Chart Update

The surging U.S. Dollar Index, which has been instrumental in pressuring Gold, is aiming for a remarkable 10th straight weekly advance but it has hit John’s initial Fib. target as well as chart resistance near 85, so a “cooling off” period is certainly warranted…the ADX indicator also shows +DI may have peaked, for now at least, just above 40…RSI(14) is in overbought territory at 81% on this 2.5-year weekly chart…a brief correction, followed by another challenge of resistance, could be in the works…

Euro Chart Update

Gold has been dropping with the euro recently but the euro is approaching strong support at 128 while RSI(14) is the mirror image of the Dollar Index – oversold at 22%…a recovery in the euro will be supportive of bullion…

TSX Gold Index Update

This long-term monthly chart gives a valuable “Big Picture” view of the TSX Gold Index and provides a strong case for an important low late last year at 149.29…

A bullish ascending triangle has formed and what would be critical from a technical perspective is if the Index were to push above its downtrend line in place for nearly 3 years…RSI(14) has been following an uptrend line, established after the 149 low, and is now testing that support…critical chart resistance is 210 as John has pointed out on numerous occasions…

Boxxer Gold Corp. (BXX, TSX-V) Update

More intriguing visuals reported yesterday from Boxxer Gold Corp. (BXX, TSX-V) from the second and final hole completed at the DOK Property, immediately south of the Sheslay district…it’s always wise to be cautious about visuals, no matter how encouraging they may seem, and Boxxer stated yesterday that assay results from the first hole aren’t expected yet for another few weeks…

The second hole, with a core length of 424.9 m, intersected visible occurrences of chalcopyrite mineralization from a core depth of 36.6 m to 389.5 m…trace bornite was noted to occur in the core from 57.3 m to 110.3 m and from 389.5 m to 424.9 m (end of hole)…mineralization observed in DOK-2014-02 is hosted in alternating strongly potassic and phyllic altered volcanics of the Stuhini group and multiple quartz monzonite intrusives…
hydrothermal biotite and gypsum veining, as well as disseminated and fracture controlled pyrite and magnetite, occur in variable concentration throughout the core…

Gypsum veining, an abundance of which was observed in the first hole, is formed by cool fluids, often late stage, and can be found throughout a porphyry environment from the core (as the hydrothermal system collapses) to the outermost fringe…the extent of gypsum veining is an encouraging sign but not necessarily directly linked to mineralization…trace bornite is certainly a positive indicator…

BXX is up half a penny at 4 cents as of 7:35 am Pacific while JV partner Continental Precious Minerals (CZQ, TSX) is 4 cents higher at 49.5 cents…

Fairmont Resources Inc. (FMR, TSX-V) Update

Fairmont Resources (FMR, TSX-V) announced this morning that it has commenced channeling at the Buttercup property in Quebec…this work, originally unplanned, was conceived upon the completion of the access road after excellent exposure of bedrock was uncovered during road construction…channeling will provide additional material for analysis and testing…Fairmont says it anticipates completing more than 400 m of channeling over approximately two weeks of fieldwork…FMR is up 1.5 cents at 29.5 cents as of 7:35 am Pacific…

Dios Exploration Inc. (DOS, TSX-V) 

Interesting results from Dios Exploration (DOS, TSX-V) yesterday nearly doubled the stock price on a closing basis on total volume (all exchanges) of 3.6 million, one of the highest volume days ever for DOS…the company reported it has made a significant fieldwork discovery at its AU33 Property in central Quebec – a hydrothermal-magmatic breccia pipe was found and yields up to 37 g/t Au and 14 g/t Ag, associated with bismuth and molybdenum…those are the highest grades ever returned from the property and that discovery is about 3.5 km from the main Heberto Gold showing…

The Heberto showing returned up to 5.18 g/t Au over 5 m (true width) in channel sampling (previous results) and is composed of disseminated pyrite along small quartz-sericite stringers in a quartz diorite…Heberto is coincidental with a weak 1-km long north-south IP conductor near the margin of a sub-circular magnetic anomaly, itself enclosed within a low magnetic one…the company said exploration will focus on drilling the Heberto targets and neighbouring hydrothermal-magmatic breccia pipes but gave no timeline for that…DOS is up another penny at 6.5 cents as of 7:35 am Pacific…

Critical Elements Corp. (CRE, TSX-V) Update

We’ve been closely tracking Critical Elements Corp. (CRE, TSX-V) since early June when it was trading below 20 cents…on August 22, it hit a multi-year high of 40 cents which was the Fib. measured resistance level…the confirmed breakout above Fib. resistance at 30 cents has served as new support as predicted…an overbought RSI(14) condition has been cleansed, so it’s possible CRE could be gearing up for a fresh advance though more basing is possible first…

On August 14 the company announced that its low iron lithium concentrate has been successfully tested by ceramic and glass manufacturers…samples sent to multiple end-users for testing in May all tested positively…Critical Elements is now proceeding with plans to diversify its material output featuring at least three different products – tantalum concentrate, low-iron lithium concentrate, and battery-grade lithium carbonate…

Below is an updated 2.5-year weekly CRE chart from John…CRE is off 1 penny at 32.5 cents as of 7:45 am Pacific…

 Note:  John, Terry and Jon do not hold share positions in BXX, FMR, DOS or CRE.