Montreal, Canada

After dropping $101 per ounce since hitting an all-time high in early December, gold prices have managed to recover about half of January’s draw-down. Prices are just 3% below their best levels this morning.

Investor sentiment in the gold sector is the most negative it’s been in more than a few years and that’s just fine by me. The more negative the market is, the more bullish I become.

Montreal, Canada

Is the big rally in lumber futures foretelling a resurgence of U.S. housing construction?

Lumber futures hit their highest levels in almost five years on Tuesday to close at $315.30 per 1,000 board feet.

Unfortunately, the trend remains markedly bearish for housing, new starts and construction activity. Building permits — an indicator for future construction, declined 10% to a 562,000 annual pace in January.

Montreal, Canada

The LME, or the London Metals Exchange, copper price continues to deviate from the Shanghai Futures Exchange copper price. Speculators are taking aim as the price divergence suggests a mini-bubble might be developing in the copper market after an explosive rally.

Over the last few months, inventories on the Shanghai Futures Exchange have climbed while those in London have declined. When this sort of anomaly occurs, commodity experts point to speculators like hedge funds whom strive to ride a trend to its fullest, usually with leverage.

Montreal, Canada

Anglo-American heavyweight, Rio Tinto (NYSE-RIO) packs a serious punch. Like its competitor, Australian giant, BHP Billiton (NYSE-BHP), earnings have been nothing short of spectacular since 2002. Rio has its hands in almost every facet of the commodity production chain, including coal, base metals, uranium, oil, salt – you name it.

Montreal, Canada

If you can’t own them outright, then maybe buy a stake.

That’s the strategy currently in-play by the Chinese as they continue to devour natural resource assets worldwide, mainly in Africa, Australia, Latin America and Canada.

Montreal, Canada

Can you name the only sector tied to the natural resources complex that’s still in the doghouse in early 2011? If you guessed alternative energy, then you’re right.

A host of bad news has sent stocks in this once-thriving sector to the basement since 2008 and for the most part shares are still lingering around their multi-year lows. Solar and wind energy dominate the space and have been in a deep bear market since 2008.

Montreal, Canada

The bull market in oil services is accelerating. As oil exploration budgets surge to fresh records this year to more than $500 billion dollars, according to Barclays Capital, the drillers are looking to expand production. That’s especially the case with deepwater drilling — home to the fattest daily lease rates for rigs.

Munich, Germany

I’m en route this morning from Vienna to Montreal via Munich. Lufthansa is taking me home shortly on an Airbus 330-300, the fourth-largest wide-body aircraft type in its massive long-haul fleet. The airline has other monsters like the Airbus A380, Boeing 747-400 and the Airbus 340-600.

Vienna, Austria

Dodging a massive snowstorm in Montreal just 24 hours earlier, I’m glad to be in Vienna. The weather here is almost beach-like for this Canadian at minus two degrees centigrade and not a speck of snow anywhere.

Austria does have its share of debt, though, at roughly 68% of GDP. And some of its banks went hog-crazy in the 2000s by aggressively lending throughout the region. But its domestic real estate market never simmered to the point of being in a “bubble” and unemployment is just under 4%.

- Dugald Malcolm, Montreal, Canada

It seems to happen without fail: every time gold makes a corrective move to the downside, the critics and talking heads start yammering on about how the ‘gold bubble’ has burst. And every time they do, I feel I must pull out the gold chart and demonstrate how these arguments are nothing if not ludicrous.