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Gold is attempting to push above resistance at $1,200…as of 8:30 am Pacific, bullion is up $7 an ounce at $1,199 after climbing as high as $1,206…Silver is up 2 cents at $16.16…Copper is off 4 pennies at $3.02…Crude Oil has fallen 78 cents to $74.87 while the U.S. Dollar Index has declined more than one-third of a point to 87.56…

The drop in Gold last month below the key $1,180 level that scared so many investors is looking increasingly like a “bear trap”, and shorts could soon be scrambling in a major way…John’s 5-year weekly chart, posted in Saturday’s Week In Review And A Look Ahead, confirmed a hammer reversal following the $1,130 low this month which also came with an RSI(14) divergence with price…this doesn’t necessarily mean the Gold bear market is over, but it does raise a growing possibility of a continued advance toward the top (around $1,300) of a downsloping flag that has been in place since last year…we could be in for a strong finish to 2014 in precious metals and quality stocks in this sector…

Another sign that Gold demand in India is accelerating – India’s central bank is in talks with the government to increase curbs on Gold imports, and an announcement could come any day according to news reports this morning…Holdings in SPDR Gold Trust, near a 6-year low, rose 0.33% to 723.01 tonnes yesterday, the first increase since November 3…Barbaric Act of Terror In Israel

Geopolitical hotspots continue to flare up…3 dual U.S.-Israeli citizens and 1 dual British-Israeli citizen were killed today in a brutal attack inside a Jerusalem synagogue that prompted a vow from Prime Minister Benjamin Netanyahu to “respond harshly” and even drew a rare condemnation from Palestinian Authority leader Mahmoud Abbas…2 Palestinians, members of a militant group, armed with meat cleavers and a gun stormed the building and began attacking people…8 others were injured – one critically – before the attackers were killed in a shootout with police…

“Red Warning Lights Flashing”, British PM Says

The global economy is again showing worrying signs of an imminent financial crisis, according to British Prime Minister David Cameron, who is warning of a dangerous backdrop of instability and uncertainty…writing in the U.K.’s Guardian newspaper, he said that last weekend’s G-20 summit in Brisbane had further underlined the problems facing the global economy.  “Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy,” he said in the article published late Sunday…global trade talks have stalled, the euro zone is teetering on the brink of recession and emerging markets are now slowing down, he said…the spread of Ebola, the conflict in the Middle East and Russia’s “illegal” actions in Ukraine are all adding to the global insecurity, according to Cameron…

“To Ensure The Success of Abenomics, Just Re-Elect Me”

Japanese Prime Minister Shinzo Abe has called a snap election to seek a mandate for his decision to delay by 18 months a further sales tax increase that had been planned for next year…he said he would dissolve the lower house of parliament later this week in preparation for an election in December, without specifying a date.  “To ensure the success of Abenomics, I’ve concluded that it (another sales tax increase) shouldn’t be carried out next October and instead be postponed by 18 months,” the Prime Minister told a nationally televised news conference, stressing that the additional tax burden would risk putting the economy back into deflation.  “I will seek the people’s judgment over our economic policy,” he said.

So the Japanese Prime Minister screws up by introducing a sales tax increase, throwing the country back into recession as GDP data demonstrated yesterday, then asks the citizens to re-elect him on the promise that he’ll delay the next sales tax hike…Abe’s opposition is weak, so he’ll most certainly survive, but the Japanese economic outlook, despite massive government and central bank intervention, remains questionable at best…the country is faced some major structural challenges including the highest government debt to GDP ratio in the OECD, aging demographics and a declining population…

Today’s Equity Markets

Asia

Japan’s Nikkei average climbed 370 points overnight, recouping more than half of Monday’s losses to finish back above 17000…economic weakness in Japan does means more QE…that’s means an even lower currency and that’s bullish for the Nikkei…this can’t last forever…one day down the road, the chickens will come home to roost…

China’s Shanghai Composite fell 16 points to close at 2457…China’s home prices posted a second consecutive annual drop in October, down 2.6% from the year-ago period, after falling an annual 1.3% in September against to Reuters’ calculations of official data released by the National Statistics Bureau…

Europe

European markets were up significantly today, thanks in part to some encouraging data out of Germany…the keenly watched German ZEW indicator of economic sentiment came in at 11.5 points for November, versus -3.6 in October…European shares closed higher on Monday after European Central Bank President Mario Draghi yesterday reiterated that he was willing to do more to stimulate the euro zone economy if necessary – including purchase sovereign bonds…

North America

The Dow is up 31 points as 8:30 am Pacific while the S&P 500 has added 8 points to 2049…

U.S. producer prices unexpectedly rose in October, but the underlying trend continues to point to a benign inflation environment…the Labor Department said this morning that its PPI for final demand increased 0.2%, driven by a jump in prices in the services sector…the PPI had declined 0.1% in September…

Low gas prices are here to stay, at least for the foreseeable future…in a dramatic shift from previous forecasts, the U.S. Energy Department has predicted that the average price of gasoline in the U.S. will be $2.94 a gallon in 2015…that’s a 44-cent drop from an outlook issued just a month ago…if the sharply lower estimate holds true, U.S. consumers will save $61 billion on gas compared with this year…that’s equivalent to an unexpected tax cut and puts more money into the pockets of consumers who account for 70% of GDP…price of gasoline is one of the 3 big drivers of consumer confidence, along with stock prices and the unemployment rate…

S&P 500 Updated Chart

How the S&P 500 behaves this week is going to be interesting…it’s currently battling important measured Fib. resistance while RSI(14) is showing diminishing up momentum and divergence with the Index as per this 2+ year weekly chart…so a near-term pullback is certainly possible after a more than 10% gain since the October low…the primary trend remains bullish, and buyers jump in on any dips to or marginally below the rising 200-day moving average (SMA)…

In Toronto, the TSX is up 74 points as of 8:30 am Pacific while the Venture has added 3 more points to 781 after confirming a breakout above resistance at 770…

Richmont Mines (RIC, TSX) continues to be a leader among smaller producers…there is much to like about this company and its prospects as we have detailed in recent weeks…it’s up another 18 cents to $3.43 as of 8:30 am Pacific…

Columbus Gold (CGT, TSX-V) confirmed a breakout yesterday above Fib. resistance at 45 cents (see yesterday’s chart)…the company is gearing up for a major drill program to follow-up on a discovery in Nevada (Eastside), while more results are pending from Phase 2 resource development diamond drilling at its Montagne d’Or Gold deposit (Paul Isnard Project) in French Guiana…CGT is up half a penny at 48 cents through the first 2 hours of trading…

TSX Gold Index

This long-term monthly TSX Gold Index chart is quite fascinating and shows how the Index held critical support at 135, and could be gearing up for another attempt to break out above the long-term downtrend line in place since late 2011…over the last few years, we’ve seen several counter-trends within a primary bear market – ultimately, the biggest challenge for the Gold Index will be to overcome the downtrend line and then critical resistance around 210…

What’s intriguing about the recent action is that the 13-year intra-day low of 128.54 November 5 was accompanied by a divergence with the RSI(14), and the Index quickly rebounded above the 135 support and is now attempting to push through resistance at 150…where the Gold Index finishes this week, and at the end of this month, will be very telling…

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

Ascot Resources‘ (AOT, TSX-V) Premier Property near Stewart in northwest B.C. has certainly shown its high-grade potential this year with Ascot now having completed its 2014 drilling (assay results for an additional 21 holes are still pending)…

The Premier Property includes the past producing Premier Gold Mine and is a separate system outside of Ascot’s current nearby resource areas (Big Missouri, Martha Ellen and Dilworth)…

As reported by the company last week, recent drilling at the Premier West zone intersected an interval of 1,115 g/t Au and 481 g/t Ag over 1 meter in hole P14-717 from 120 to 121 m depth…that hole is located approximately 20 m southeast of P-14-707 which, as previously announced, intersected 14,394.5 g/t Au and 6,830 g/t Ag over 0.75 m…significantly, this exceptionally high-grade Gold and Silver zone has now been traced over a strike length of 400 m and remains open on strike in both directions…company geologists believe that drilling at the Premier West Zone, Main Zone and downdip of the Glory Hole now confirms that all these zones are part of 1 continuous system…

Technically, AOT retraced almost to the Fib. 61.8% level ($1.40) earlier this month and has since bounced back to the top of a downsloping flag…a confirmed breakout above this flag would be bullish…buy pressure has been on the increase and a potential +DI bullish crossover could be in the works…higher Gold prices would help immensely in the absence of drilling…

Note:  John, Terry and Jon do not hold share positions in AOT or RIC.  Jon holds a share position in CGT.