-- Posted 1 October, 2008 | Digg This Article |

The Metals:

Gold fell $7.90 to $868.40 by midday in London and rose to over $887 by about 10AM EST before it fell back near unchanged to $877.20 by late morning, but it then rallied to a new high of $893.20 in the last two hours of trade and ended with a gain of 0.67%.  Silver fell $0.23 to $11.96 by midday in London before it rallied fiercely higher throughout most of trade in New York and ended near its high of $12.967 with a gain of 3.69%.

Euro gold rose to about €628, platinum gained $27 to $1031, and copper fell nearly 10 cents to about $2.80.

Gold and silver equities held near unchanged for a good part of the morning before they rose to see about 4% gains by around 2PM EST, but they then fell back off into the close and ended only modestly higher.

European cenbank CBGA gold sales record low -council  Yahoo

The Economy:

The Senate votes on the Bailout Plan tonight some time after 7PM EST.  Tomorrow at 8:30AM EST brings Initial Jobless Claims for 9/27 expected at 475,000 and at 10AM is the Factory Orders report for August expected at -2.9%.

The Markets:

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

Oil fell over 2% as crude inventories built a larger than expected 4.3 million barrels, gasoline inventories rose 900,000 barrels rather than an expected drop, and distillates fell 2.3 million barrels.  Refinery Utilization increased 5.6% to 72.3%.

The U.S. dollar index found slight gains on hopes the Senate will pass the Bailout Bill tonight, but gains pared after ISM data came in much worse than expected and reported the biggest drop since 1984.

Treasuries “rose on speculation the U.S. will enter a recession regardless of whether lawmakers approve a plan to rescue the financial system.”

The Dow, Nasdaq, and S&P fell markedly by midmorning before they flirted with slight gains in early afternoon trade, but they fell back off to end a bit lower on apprehension over the passage and effectiveness of the Bailout Plan.

Among the big names making news in the market today were GE, Ford, Honda, GM, GameStop and Micromania, Pilgrim’s Pride, Northwest, Xstrata and Lonmin, UBS, Exxon Mobil, Total, and Eni.

The Commentary:

“Dear Friends,

Please stop being spectators and put an end to financial fabrication!

Get involved in the Wall Street Bailout Bill.

If this bill is passed financial institutions will be freed from fair accounting rules that require them to reveal the true market value of the value-less paper they hold. That would allow them to continue lying about their solvency.

You simply must not let that happen. It legislates financial fabrication!

This is the first time in my 67 years that legislators are listening to the public, so please tell them what you want on this bill, whether it be yes or no, but do not support lying as an economic tool.

Have we not already had ENOUGH of fabricated, spun, mistruths?

Vote No against a change in Fair Accounting Rules. Vote any way you wish on the rest of this meaningless exercise.”- Jim Sinclair, JSMineset.com

“December Gold closed up 6.5 at 887.3. This was 10.8 up from the low and 11.2 off the high.

December Silver finished up 0.495 at 12.77, 0.02 off the high and 0.57 up from the low.

The gold market traded mostly higher, but within Tuesday's wide range as the market was supported by safe haven buying tied to mostly weak stock market action during the majority of the session and ongoing turmoil in the credit markets. Uncertainty surrounding the passage of a US government rescue plan seemed to inspire buying during the session. Rising physical demand for gold was another supportive factor. The bull camp held an edge for most of the session as gold was able to rally despite bearish outside market influences of a firmer Dollar and weaker oil prices. For most of the session gold was able to push aside a much weaker report on the US manufacturing sector last month, even though it pushes the economy closer toward a recession. However, the gold market weakened into the close as a late rally attempt in the stock market seemed to inspire profit taking in gold.

Silver staged an impressive rally as the market also seemed to be attracting flight to safety buying interest. Like gold, silver was able to register a sizable price bounce despite mostly negative outside market influences including a stronger Dollar and sharply weaker copper prices. Perhaps the silver market was able to push aside the negative economic news on hopes that US economic prospects will improve once a bailout plan gets passed. However, with the market also holding a key chart level, it appears that some of the strength in silver was due to short covering on ideas that the market may have fallen too far too fast the previous session.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Investors start fresh gold rush

World begins to notice U.S. irreponsibility and hypocrisy

Remember, only gold and silver markets are NOT rigged

Ireland's guarantee of banks is twice country's GNP

'Unseen' and 'unprecedented' demand for bullion by rich

The Statistics:

As of close of business: 9/30/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 Note: Change in Total Tonnes from yesterday’s data: SPDR added 3.06 tonnes to a new record high holding.

SPDR Gold Holdings Advance 3.1 Tons to a Record, Data Show  Bloomberg

COMEX Gold Trust (IAU)

 Note: Change in Total Tonnes from yesterday’s data: 0.62 tonnes were added to the trust.

Silver Trust (SLV)

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

The Stocks:

Tanzanian Royalty’s (TRE) private placement, Gammon Gold’s (GRS) Senior Vice President of Exploration appointment, Richmont’s (RIC) drill results, Eldorado’s (EGO) exploration update, and South American Silver’s (SAC.TO) updated resource 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:

Strateco Closes C$8.0 Million Financing - More
- October 01, 2008 | Item | E-mail

Adanac Molybdenum Corporation: Ruby Creek Project-Exploration Update-Correction - More
- October 01, 2008 | Item | E-mail

Hana Mining Reports on Drilling and Exploration Activities at Ghanzi Copper-Silver Project in Botswana - More
- October 01, 2008 | Item | E-mail

Manicouagan Minerals-Provides Exploration Update on Mid-North Quebec Properties-Grants Stock Options - More
- October 01, 2008 | Item | E-mail

Tanzanian Royalty Chairman to Provide $1 Million Private Placement - "Tanzanian Royalty Exploration Corporation (TRE - News) announces that Mr. James E. Sinclair has agreed to provide $1,000,000 by way of a private placement with the proceeds being applied to general working capital. Mr. Sinclair has agreed to purchase 327,225 common shares at a purchase price of $3.056 per share for proceeds totaling $1,000,000. The price reflects the greater of the weighted average trading price of the Company's shares for the five consecutive trading days ended September 30, 2008 of $3.056 and the closing price on September 30, 2008 of $2.85." More
- October 01, 2008 | Item | E-mail

Medallion Announces Private Placement -