-- Posted 28 May, 2008 | | Source: SilverSeek.com

The Metals:

Gold rose slightly to $909.75 in Asia before it dropped over $20 to as low as $888.95 by midday in London, but it then rallied back higher in New York and ended over 1% off its low with a loss of just 0.82%.  Silver rose to over $17.50 in Asia and dropped to $17.06 in London before it rose to a new session high of $17.63 and saw a gain of over 1% by a little after 10AM EST in New York, but it then fell back off into the close and ended with a small loss of 0.34%.

Euro gold remained at about €577, platinum gained $41 to $2064, and copper fell a couple of cents to about $3.72.

Gold and silver equities fell roughly 2% at the open, but they then rallied back higher for the rest of trade and ended with about 1% gains.

The Economy:

Fed governor Mishkin announced his resignation today.  Tomorrow at 8:30AM EST brings Initial Jobless Claims for 5/24 expected at 370,000, first quarter GDP expected at 0.9%, and the Chain Deflator expected at 2.6%.

The Markets:

Charts Courtesy of http://finance.yahoo.com/

Oil started off the day lower on demand concerns, but it then rose throughout the rest of trade on supply concerns in Nigeria and ended over 1% higher above $131 after making a low of $125.96 earlier in the session.  Traders are also waiting for tomorrow’s inventory reports that were delayed from today due to the Memorial Day holiday.

The U.S. dollar index rose and treasuries fell after Durable Goods Orders did not fall as much as expected and reduced recession worries.  A 2-year note auction also went well as the yield on the 10-year rose over 4.0% for the first time in 2008 and the yield on the 30-year rose to a 7 month high.

The Dow, Nasdaq, and S&P opened slightly higher as oil prices moderated and then reversed lower as oil rose back above $130, but all three indices rallied back higher in late trade and ended decently higher on apparent satisfaction with the Durable Goods Orders report.

Among the big names making news in the market today were Exxon, XTA and Bakken, Dow Chemical, and Polo.

The Commentary:

“Dear Friends,

Gold is not acting in a manner outside of what should be anticipated in the smallest market anywhere being played by the largest money in the world.

The violence you are experiencing is based on the above along with a misunderstanding of the mechanics of a metals dealer.

The big six that are generally identified as the enemy of gold also represent major metals dealers and in some cases are metals dealers themselves via subsidiaries such as J. Aron in London.

1. Metals dealers buy metals from producing companies at a discount to form, condition and location.
2. The metals dealer prices their buy according to their ability to sell the metal in the forward market.
3. That transaction is a true hedge.
4. The short side of the gold trade as in this example is risk free at that point.
5. In the old days a modest profit fulfilled the desire of the metals brokers.
6. The short was covered when the purchased bullion metal was sold to industry.
7. Today the world has no ceiling on desires.
8. The metals dealer of today wants to make $50 or more, not 50 cents.
9. The gold market becomes prone to declines from time to time by entities like crude oil or the euro.
10. The metals dealer has a risk-less short position on.
11. At this point risk is taken by selling to hammer prices lower, not to sell volume.
12. This can be identified by a floor trader in open outcry or later by computer entry offering thousands of gold contracts for sale when a few hundred or even ten is the only buyer showing.
13. The bravado has a purpose. That is to scare the gold market lower using the least sales required.
14. As gold moves into areas of major support the metals dealer buys back the short.
15. As the producers continue to sell, dealers then buy as in number one but play the market and back higher the gold price goes.
16. The short is then put on by the metals dealer at Angels or round numbers.
17. This along with mindless black boxes and follow the leader hedge funds results in the largest money on the planet playing the smallest market on the planet. This creates a large degree of unprecedented volatility.
18. The net result is that people assume a huge dedicated short, which is wrong.
19. What is correct is a turning short that keeps the number high but in fact is made up mostly of risk-less trades.
20. The trades are not registered as hedges rationalizing that; in today’s world a hedge is defined as a different transaction than outlined.
21. Since these trades are made generally either as broker or principle by the big six who can do no wrong, who cares how they report it.
22. The metals dealers do all possible to invite the assumption that they are dedicated shorts when they are NOT. This benefits their desires as up moves try and push a short that in fact turns over at a profit and has no dedication to anything other than the 21 points just made.
23. What people refuse to believe is that just those that are identified as the enemies of gold will be the ones that make the most long gold.
24. We will discuss 24 as times moves along. I have outlined to the attendees recently in New York and Toronto why 23 is FACT, not fancy. ”- Jim Sinclair, JSMineset.com

“June Gold finished down 7.4 at 900.5, 2.5 off the high and 11.5 up from the low.

July Silver closed down 0.05 at 17.415. This was 0.205 up from the low and 0.225 off the high.

The gold market started out under moderate pressure and generally remained under pressure in the wake of a mostly positive US Dollar trade. However, the gold market did manage to throw off some of the weakness in the face of a mid Day recovery in oil prices and it also seemed as if the gold market was attempting to give the even number price zone of $900 some credence. However, the gold market was also dogged by the fact that both platinum and copper prices were under moderately aggressive pressure throughout the trading session. Fortunately for the bull camp in gold, the US Durable goods report was better than expected, but not so much better than expected that the Dollar gathered significant additional upside momentum.

The metals markets were under universal pressure early in the trade on Wednesday, but at times the silver market managed to climb out from under selling pressure to track higher on the day. Certainly ongoing strength in the US Dollar and negative leadership from the gold market were early burdens to the silver market, but with the silver market unable to fully benefit from a slightly better than expected US Durable goods report, it was clear that the market remained at least partly concerned about the ongoing threat of US slowing growth. Not surprisingly the recovery in oil prices was of little lasting support to silver prices, which were roughly 25 cents below their morning highs into the close.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Gary North: The next attack on gold has begun

Ted Butler: A few thoughts on silver

The Statistics:

As of close of business: 5/27/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 Note: Change in Total Tonnes from yesterday’s data: The JSE added 0.12 tonnes.

COMEX Gold Trust (IAU)

 Note: No change in Total Tonnes from yesterday’s data.

Silver Trust (SLV)

 Note: No change in Total Tonnes from yesterday’s data.

The Stocks:

Buenaventura’s (BVN) completed $450 million syndicated term loan, Paramount’s (PZG) exploration progress, Gammon Gold’s (GRS) presentation, Keegan’s (KGN) drill results, ECU Silver’s (ECU.TO) assay results, and Coeur’s (CDE) mine start-up in Bolivia were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.

All of today's gold and silver stock news:

Buenaventura Completes US$450 million Syndicated Term Loan and Repayment of Bridge Loan - "Compania de Minas Buenaventura S.A.A. ("the Company" or "Buenaventura") (NYSE: BVN; Lima Stock Exchange: BUE.LM), Peru's largest publicly-traded precious metals mining company announced that it has completed a US$450 million syndicated term loan borrowing. Proceeds from the syndicated term loan were used to repay in full the Company's US$450 million bridge loan, which Buenaventura used to finance the unwinding of its gold hedge book in February, 2008." More
- May 28, 2008 | Item | E-mail

Permitting for Abcourt-Barvue Project Progressing Well - More
- May 28, 2008 | Item | E-mail

Lincoln announces adoption of Shareholder Rights Plan - More
- May 28, 2008 | Item | E-mail

Tiomin Announces Proposed Acquisition of Radiant Resources Inc. - More
- May 28, 2008 | Item | E-mail

Tiberius provides update on activities and accomplishments - More
- May 28, 2008 | Item | E-mail

Tiberius announces new private placement - More
- May 28, 2008 | Item | E-mail

RSM Activities at Goldwedge, Dixie Comstock, Railroad Projects, Nevada and CFO Resignation - More
- May 28, 2008 | Item | E-mail

Typhoon Intersects 3,59 g/t Au on 4,6 Meters at More Than 450 Meters of Fayolle Deposit - More
- May 28, 2008 | Item | E-mail

Stingray Copper Inc.: Resource In Fill Drilling Program Nears Completion at El Pilar - More
- May 28, 2008 | Item | E-mail

Sage Intersects 10.89% Cu, 8.2g Au/T and 318.4g Ag/T-2.72 metres-Beardmore/Geraldton Gold Camp - More
- May 28, 2008 | Item | E-mail

Cogitore Resources Inc. initiates 2008 diamond drilling program on Scott Lake Project and updates winter drilling program - More
- May 28, 2008 | Item | E-mail

Meston Resources obtains additional extension to conclude Plan of Arrangement - More
- May 28, 2008 | Item | E-mail

Union Gold Inc. Enters Into a Binding Merger Agreement With Shoal Point Energy Ltd. - More
- May 28, 2008 | Item | E-mail

High Grade Results Continue From Hinge #4 Zone Near Surface - More
- May 28, 2008 | Item | E-mail

Dia Bras Drifts Into New High-Grade Bornite Zone at its Bolivar Mine, Chihuahua, Mexico - More
- May 28, 2008 | Item | E-mail

New Shoshoni Ventures Ltd.: Drill Program Planned for Kirkland Creek Gold Property, Sunrise Gas Well Update - More
- May 28, 2008 | Item | E-mail

Lateegra Reinforces Its Focus on Phosphate Exploration - More
- May 28, 2008 | Item | E-mail

RosCan to Acquire Prognoz Silver Property - More
- May 28, 2008 | Item | E-mail

Ore Fault North Zone Resource Development Drilling Hits 15m Grading 1.71% Ni, 0.48% Cu, and 2.14gpt PGM and Gold - More
- May 28, 2008 | Item | E-mail

CZM Commences 2008 Work Program at TAG Property - More
- May 28, 2008 | Item | E-mail

Artha Announces Historical Uranium Resources in Wyoming - More
- May 28, 2008 | Item | E-mail

Benton Intersects High Grade Gold at Armit Lake - More
- May 28, 2008 | Item | E-mail

B2Gold Corp. Announces Positive Stage One Exploration Drill Results From the Quebradona Property in Colombia - More
- May 28, 2008 | Item | E-mail

Scarce minerals force miners to take risks - "Mining companies have little choice but to invest in increasingly remote and politically risky regions to reap the rewards from ever scarcer reserves.

For the last few years, the metals and mining industry has witnessed a flurry of mergers and acquisitions, totaling $210.8 billion last year, as companies found it easier to buy a running operation rather than start from scratch." More
- May 28, 2008 | Item | E-mail

ECU Silver Continues Exploration Success in Northern Branch of Terneras East - "ECU Silver Mining (Toronto:ECU.TO - News) ("ECU Silver" or the "Company") is pleased to announce results at the main Velardena Property. Recent assays from a cross-cut in the northern branch of the eastern extension of the major Terneras vein ("Terneras East - North Branch") resulted in 19 cuts, total length of 70 metres, yielding an average of 2.15 g/t Au, 1257 g/t Ag, 5.06% Pb and 4.88% Zn over an average width of 0.4 metres (see Table 1)." More
- May 28, 2008 | Item | E-mail

Bell Copper Amends Joint Venture Agreement - More
- May 28, 2008 | Item | E-mail

Cardero Receives Drill Permit for Pampa de Pongo Project; 43-101 Inferred Resource 953Mt @ 44.7% Iron - More
- May 28, 2008 | Item | E-mail

High Desert Gold Corporation Announces Normal Course Issuer Bid - More
- May 28, 2008 | Item | E-mail

Trevali Continues to Intersect Broad Zones of Silver-Base Metal Mineralization at Santander, Peru - More
- May 28, 2008 | Item | E-mail

Golden Valley Mines Ltd./Abitibi Grassroots Exploration Program Update: Diamond Drill Program Underway-Bogside Prospect (Cadillac, Quebec) - More
- May 28, 2008 | Item | E-mail

StrataGold commences drilling at Dublin Gulch, Yukon - More
- May 28, 2008 | Item | E-mail

International KRL Resources acquires gold project in Quebec - More
- May 28, 2008 | Item | E-mail

Abbastar Signs A Letter Of Intent To Acquire A Mexican Exploration Company With A Gold Property - More
- May 28, 2008 | Item | E-mail

Golden Harp Resources provides exploration update - More
- May 28, 2008 | Item | E-mail

North Zone Assay Results From Diamond Drilling at Rockgate's U-Ag-Cu Falea Project, Mali, West Africa - More
- May 28, 2008 | Item | E-mail

Erdene Receives its First NI 43-101 Compliant Resource Estimate for Zuun Mod Molybdenum Project - More
- May 28, 2008 | Item | E-mail

High River Gold Announces Spin-Out of Prognoz Creating a World Class Pure Silver Company - More
- May 28, 2008 | Item | E-mail

Ore Fault North Zone Resource Development Drilling Hits 53m grading 0.82% Ni, 0.25% Cu, and 1.15g/t PGM and Gold - More
- May 28, 2008 | Item | E-mail

Mazorro Resources Lists on the Frankfurt Stock Exchange - More
- May 28, 2008 | Item | E-mail

KORES to Fund Ogcheon Uranium Drilling - More
- May 28, 2008 | Item | E-mail

Gentor continues to intercept high-grade moly at its IMA project in Idaho - More
- May 28, 2008 | Item | E-mail

Skybridge Development Corp. Closes Qualifying Transaction and Presents Update on Blue Caribou Project - More
- May 28, 2008 | Item | E-mail

Drilling targeted at expanding current NI 43-101 inferred resource estimate resumes at Okeover copper/molybdenum project in B.C. - More
- May 28, 2008 | Item | E-mail

Solex Resources Corp. Announces stock options grant to directors and employees - More
- May 28, 2008 | Item | E-mail

Goldrea Resources Corp. and Molycor Gold Corp.: Near Surface Molybdenum Intercepts Continue at Empress Moly Property - More
- May 28, 2008 | Item | E-mail

Northern Superior Announces Airborne Survey Completed Over North Thelon Joint Venture's Tanqueray Option Property - More
- May 28, 2008 | Item | E-mail

Grandview Gold Hires Veteran Geologist as Vice President Exploration Toby Hughes, P.Geo Brings Over 27 Years Mineral Exploration Experience - More
- May 28, 2008 | Item | E-mail

Forum Completes Airborne Survey Over Tanqueray Option Property Nearby Areva's Kiggavik Uranium Deposit, Nunavut - More
- May 28, 2008 | Item | E-mail

USEC Awards $92 Million Contract to Teledyne Brown - More
- May 28, 2008 | Item | E-mail

China to be top 2008 gold producer -industry group - "China, the world's second-largest gold producer last year, is expected to surpass South Africa to be the world's top gold producer in 2008, an executive at the China Gold Association, an industry group, said on Wednesday." More
- May 28, 2008 | Item | E-mail

Paramount Gold and Silver Corp. Complete Second Phase Exploration at the Andrea Project in Chihuahua, Mexico - "Paramount Gold and Silver Corp. (Toronto:PZG.TO - News)(AMEX:PZG - News)(Frankfurt:P6G.F - News)(WKN: A0HGKQ) has completed the second phase, helicopter-supported sampling of the 84,000 hectare Andrea Project. Samples have been shipped to ALS Chemex Labs for assay." More
- May 28, 2008 | Item | E-mail

Gammon Gold Presentation Available on Corporate Website - "The presentation provides updated financial and productivity metrics as of April 30th and May 23rd respectively that clearly demonstrate the ongoing positive traction that we are continuing to achieve as we execute our business model." More
- May 28, 2008 | Item | E-mail

Keegan Hits Excellent Gold Grades on Stepout Holes at Esaase Gold Property - "Keegan Resources Inc. ("Keegan") (CDNX:KGN.V - News)(AMEX:KGN - News) is pleased to announce the results of six new stepout drill holes drilled 260-380 meters north of the Main Zone, which hosts Keegan's current 43-101 compliant resource. Highlights include 24 meters of 2.64 g/t Au, 22 meters of 2.63 g/t Au and 56 meters of 1.22 g/t Au." More
- May 28, 2008 | Item | E-mail

- Chris Mullen, Gold Seeker Report

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