Gold Seeker Closing Report: Gold and Silver End Mixed While Paulson Asks For A Bazooka

	Close	Gain/Loss
Gold	$977.15	+$4.75
Silver	$18.965	-$0.14
XAU	195.86	-2.62%
HUI	455.81	-2.88%
GDM	1364.56	-2.32%
JSE Gold	2452.51	+125.46
USD	71.79	-0.17
Euro	159.01	-0.08
Yen	95.47	+1.28
Oil	$138.74	-$6.44
10-Year	3.844%	-0.036
T-Bond	116.875	+0.140625
Dow	10962.54	-0.84%
Nasdaq	2215.71	+0.13%
S&P	1214.91	-1.09%

Gold and silver remained near unchanged in Asia, rose roughly 1% in London, and climbed to as high as $988.17 and $19.45 by about 10AM EST in New York, but both metals next collapsed in late morning trade and dropped to $968.35 and $18.522 by a little before noon. Prices then rebounded in the last two hours of trade and gold ended with a gain of 0.49% while silver ended with a loss of 0.73%. Not too shabby considering that the dollar ended well off its lows and oil experienced its biggest one day dollar drop since 1991.

Euro gold rose to over €613, platinum lost $42.50 to $1974.50, and copper fell roughly 5 cents to about $3.72.

Gold and silver equities rose over 2% at the open and fell over 3% by late morning before they traded roughly 2% lower for the rest of the day.

Report	For	Reading	Expected	Previous
PPI	June	1.8%	1.3%	1.4%
Core PPI	June	0.2%	0.3%	0.2%
Retail Sales	June	0.1%	0.4%	0.8%
Retail Sales ex-auto	June	0.8%	0.9%	1.2%
NY Empire State Index	July	-4.9	-8.0	-8.7
Business Inventories	May	0.3%	0.5%	0.5%

Bernanke spoke before the Senate Banking Committee today about returning stability to the financial markets while also expressing worries over growth and inflation. Paulson and Cox joined the panel in early afternoon trade and revealed limits on short sales of Fannie Mae and Freddie Mac. The emergency order is aimed at preventing naked short sales in the primary dealers by implementing new rules (or actually enforcing current rules) covering the practice.

The fed, treasury, and SEC are essentially asking for unlimited funding and power from congress to do whatever they want to save their banking buddies no matter what the consequence for the average American taxpayer. Other than some pointed questions from Senator Jim Bunning, the banking committee gave little real opposition to the wishes of Bernanke, Paulson, and Cox and will likely give them the blank check or “bazooka” they say they need to save Freddie and Fannie rather than just a squirt gun as Paulson put it at one point. Paulson argued that if only given a squirt gun (small check) then they may need to use it, but if given a bazooka (blank check) then perhaps the threat of having a bazooka in your pocket may be force enough to not need to use it. Senator Jim Bunning pointed out that seldom if ever has there been power granted and not later used no matter how much it was argued at the time that it hopefully would not need to be used in the future. WSJ Blog today with some of Bunning’s other comments - Bunning: The Fed, GSEs and Socialism

Tomorrow at 8:30AM EST brings CPI for June expected at 0.7% and Core CPI expected at 0.2%. At 9AM is the Net Foreign Purchases report for May expected at $65.0 billion and at 9:15 is Capacity Utilization expected at 79.4% and Industrial production expected at 0.0%. Finally at 2PM is the release of FOMC minutes from the fed’s June 25^th meeting.

Oil fell as much as $9.26 in late morning trade and ended over 4% lower on an acceleration of liquidation of positions on margin calls and worries that a severe economic downturn will cut into demand. Bernanke was given the chance by several senators to blame speculators for the recent price run-up and instead pointed to market fundamentals in his testimony today.

The U.S. dollar index fell on economic worries and the euro rose to a new record high versus the USD in early trade, but the dollar ended well off its lows with only a minor loss as lower oil and speculation Paulson may get a bazooka to blast the Forex market encouraged some short covering.

Treasuries rose on the short end after Bernanke said there are “significant downside risks” to economic growth, but gains were limited as PPI came in higher than expected at the highest year over year rate since 1981 and at least pushed rates on the long bond higher.

The Dow, Nasdaq, and S&P dropped markedly at the open on more worries about the economy and health of the financial system overall. All three indices rebounded to find marginal gains as oil dropped over $9 at one point and traders digested congressional testimony, but stocks fell back off by the close and only the Nasdaq was able to end with a gain ahead of Intel’s earnings after the bell. The Dow closed under 11,000 for the first time in over two years.

Among the big names making news in the market today were Volkswagen, GM, Fannie Mae and Freddie Mac, U.S. Bancorp, and J&J.

“August Gold finished up 5 at 978.7, 9.9 off the high and 9.4 up from the low.

September Silver closed down 0.237 at 19.013. This was 0.333 up from the low and 0.527 off the high.

The gold market started out firm but the market was clearly undermined in the face of a sharp reversal in oil prices just ahead of mid session. While the reversal in oil prices provided the stock market with some temporary respite and that action also seemed to take some of the pressure off the US Dollar, it would not seem like the flight to quality condition was completely erased. In fact, in the wake of concerning dialogue from the US President and similar unnerving concerns from the US Fed Chairman, one might suggest that flight to quality issues remained front and center despite the rather violent two sided trade in the gold market on Tuesday. On the other hand, seeing hotter than expected US inflation readings and weaker than expected US retail sales readings fomented concerns of stagflation and the impact of stagflation on the price of gold is a complicated subject.

The silver market forged a very expansive trading range on Tuesday after an early rally was reversed in the wake of a sharp mid morning decline in oil prices. While a sharp slide in oil prices could reduce flight to quality conditions, it is also possible that disconcerting macro economic psychology was responsible for the failure in silver prices from the early highs. Clearly US inflation remains a problem in the wake of the US PPI readings, but with US retail sales coming much weaker than expected it is possible that some silver longs decided to bank profits off the fear of too much slowing ahead in the US economy.”- The Hightower Report, Futures Analysis and Forecasting

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 3.99 tonnes from yesterday’s record high holding and the JSE added 0.61 tonnes.

Gold Field’s (GFI) worker death, Harmony’s (HMY) worker stoppage, Orezone’s (OZN) mining convention signing, First Majestic’s (FR.TO) second quarter production, and Minco’s (MSV.TO) Bankable Feasibility Study update were among the big stories in the gold and silver mining industry making headlines today.

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

Capstone Announces Normal Course Issuer Bid - More
- July 15, 2008 | Item | E-mail

Update on Amerigo Q2 Power Costs - More
- July 15, 2008 | Item | E-mail

Amerigo Announces Q2 2008 Production Results - More
- July 15, 2008 | Item | E-mail

UNOR Announces Efforts to Increase Visibility to Global Investment Community - More
- July 15, 2008 | Item | E-mail

Bancroft Uranium Hires the Investor Relations Group - More
- July 15, 2008 | Item | E-mail

Globex Agrees to a $4 Million Financing at a Premium to Market - More
- July 15, 2008 | Item | E-mail

Cogitore Resources Inc. Initiates 2008 Diamond Drilling Program at its Lemoine Project Near Chibougamau, Quebec - More
- July 15, 2008 | Item | E-mail

Opawica Explorations Inc. Announces New CFO - More
- July 15, 2008 | Item | E-mail

TEAL finalizes funding of additional US$35 million - More
- July 15, 2008 | Item | E-mail

Harmony says miners stop work in S.Africa, output hit - "South Africa's Harmony Gold (HARJ.J: Quote, Profile, Research, Stock Buzz) said on Tuesday that work at its Virginia operations stopped after workers downed tools following the death of a mineworker last Friday, reducing output.

Amelia Soares, a spokeswoman for Harmony, told Reuters the group expected to lose between 30-35 kg (1,059-1,236 ounces) of gold per day at its Virginia operations, which comprise a number of mines in South Africa's Free State province." More
- July 15, 2008 | Item | E-mail

2008 Gold Exploration Program Initiated at Rare Element's Sundance Project - More
- July 15, 2008 | Item | E-mail

UC Resources Ltd., Spider Resources Inc. and KWG Resources Inc. Receive Initial Resource Estimates for McFaulds Project - More
- July 15, 2008 | Item | E-mail

New Jersey Mining Company Stakes New Gold Property - More
- July 15, 2008 | Item | E-mail

United Uranium Corp. Announces Land Acquisition - More
- July 15, 2008 | Item | E-mail

Stellar Pacific Ventures Inc: Additionnal Resources on Heva With 209,000 Ounces of Gold - More
- July 15, 2008 | Item | E-mail

Queensland Minerals Update on Exploration Program Encouraging Results From the Dingo Peak Copper-Gold Discovery in North Queensland, Australia - More
- July 15, 2008 | Item | E-mail

Amarillo Drills 120m @ 3.52 g/t Au at Butia, Lavras do Sul, on 2nd Step-Out Section - More
- July 15, 2008 | Item | E-mail

GBS Reports Record Second Quarter Gold Production - More
- July 15, 2008 | Item | E-mail

Almo Capital Corp. - Drilling starts on Moore Property, Kamloops Mining Div., B.C. - More
- July 15, 2008 | Item | E-mail

Mr. Colin K. Benner Appointed to Creston's Advisory Board - More
- July 15, 2008 | Item | E-mail

Tombstone Exploration Drill Program's First Hole at 730' - More
- July 15, 2008 | Item | E-mail

FNX Completes Gold Wheaton Transaction - More
- July 15, 2008 | Item | E-mail

High Grade Nickel Mineralization Intersected at Langmuir Nickel Discovery and Deep Drilling Confirms the Potential for Additional Nickel Discoveries at Depth - More
- July 15, 2008 | Item | E-mail

Golden Hope Mines Engages Auburn Partners for Investor Relation Services - More
- July 15, 2008 | Item | E-mail

Manicouagan Provides Exploration Update - More
- July 15, 2008 | Item | E-mail

Lund Acquires Gold Property in Schreiber-Hemlo Greenstone Belt, Ontario - More
- July 15, 2008 | Item | E-mail

Fortune Minerals awards contract for Hemlo Mill dismantling, equipment salvage & demolition - More
- July 15, 2008 | Item | E-mail

Campbell Resources updates second quarter 2008 operations - More
- July 15, 2008 | Item | E-mail

Gold Wheaton completes FNX transaction - More
- July 15, 2008 | Item | E-mail

First Majestic Silver Corp.: 2nd Quarter Production Shows Continued Ramp-Up - "First Majestic Silver Corp. (Toronto:FR.TO - News) (Other OTC:FRMSF.PK - News) (Frankfurt:FMV.F - News) (WKN: A0LHKJ) ("First Majestic" or the "Company") is pleased to announce that production in the second quarter ending June 30th 2008 increased again to a record 1,271,141 equivalent ounces of silver representing a 20% increase over the prior quarter production and an increase of 49% over the same quarter in the prior year." More
- July 15, 2008 | Item | E-mail

Miners vs multinationals: Ghana on front-line - "The illegal miners had left their mark. Tools, explosives, sacks and ropes lay beside chopped power cables some 2,300 ft below ground in AngloGold Ashanti's Obuasi mine in Ghana.

They had chiseled off anything they suspected might conceal gold ore, including support structures like shaft pillars." More
- July 15, 2008 | Item | E-mail

Tumipampa: three types of gold mineralization uncovered - More
- July 15, 2008 | Item | E-mail

Firstgold Opens up Commercial Assay Laboratory as It Continues to Develop Relief Canyon Exploration Project - More
- July 15, 2008 | Item | E-mail

Uruguay Mineral Exploration: Notice of Exploration Report - More
- July 15, 2008 | Item | E-mail

East West Resource Corporation: Drilling Confirms Continuity of Copper Mineralization at Marshall-Thunder Bay, Ontario - More
- July 15, 2008 | Item | E-mail

Gold Fields-worker killed at Kloof mine, shaft shut - "Gold Fields (GFIJ.J: Quote, Profile, Research, Stock Buzz) said a worker had been killed at the group's underground operations at its Kloof mine early on Tuesday, and the mine's main shaft had been shut for risk assessment and an investigation." More
- July 15, 2008 | Item | E-mail

Minco Silver Provides Update on Bankable Feasibility Study and Permitting at Fuwan - "Minco Silver Corporation (the "Company" or "Minco Silver") (Toronto:MSV.TO - News) is pleased to announce that the 43-101 compliant Bankable Feasibility Study ("BFS") and the permitting process are progressing well at its Fuwan Silver Project located in Guangdong Province, China." More
- July 15, 2008 | Item | E-mail

Orezone Signs Essakane Mining Convention - "Orezone Resources Inc. (Toronto:OZN.TO - News)(AMEX:OZN - News) is pleased to announce that the mining convention for the Essakane gold project has been signed by His Excellence Abdoulaye Abdoulkader CissÃ¯Â¿1/2, Minister of Mines and Energy for Burkina Faso. The signing of the convention was the last stage required in the Burkina Faso mining approval process." More
- July 15, 2008 | Item | E-mail

- Would you like to receive the Free Daily Gold Seeker Report in your e-mail? Click here

Note: This article may be reproduced provided the article, in full, is used and mention to Gold-Seeker.com is given.

Disclosure: The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. The author of this report is not a registered financial advisor. Readers should not view this material as offering investment related advice. Gold-Seeker.com has taken precautions to ensure accuracy of information provided. Information collected and presented are from what is perceived as reliable sources, but since the information source(s) are beyond Gold-Seeker.com’s control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities & therefore information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. Investors are advised to obtain the advice of a qualified financial & investment advisor before entering any financial transaction.