Gold Seeker Closing Report: Gold and Silver Gain Over 4% and 3% While Miners Surge Over 10%

	Close	Gain/Loss
Gold	$808.70	+$35.25
Silver	$10.17	+$0.33
XAU	106.43	+10.80%
HUI	254.38	+10.04%
GDM	770.58	+10.30%
JSE Gold	2339.50	+171.07
USD	85.46	-0.36
Euro	130.18	+0.80
Yen	107.96	-0.59
Oil	$43.52	+$1.45
10-Year	2.684%	+0.015
T-Bond	135.03125	-0.5625
Dow	8761.42	+0.81%
Nasdaq	1565.48	+1.17%
S&P	899.24	+1.19%

Gold rose roughly 1% to about $780 in Asia and added another $10 in London before it accelerated its gains in New York and ended near its session high of $814.15 with a gain of 4.56%. Silver traded just mostly slightly higher in Asia and London before it also took off in New York and ended near its session high of $10.265 with a gain of 3.35%.

Euro gold rose to about €620, platinum gained $27.50 to $829, and copper gained nearly 5 cents to about $1.47.

Gold and silver equities rose over 11% by early afternoon before they backtracked a bit mid-afternoon as the major indices erased their morning gains, but the miners then rallied back higher in late trade and ended over 10% higher on the day.

Report	For	Reading	Expected	Previous
Wholesale Inventories	Oct	-1.1%	-0.2%	-0.4%
Treasury Budget	Nov	-$164.4B	-$171.0B	-$98.2B

Tomorrow at 8:30AM EST brings Import and Export Prices for November, Initial Jobless Claims for 12/06 expected at 525,000, and the Trade Balance for October expected at -$53.5B.

Oil rose in early trade on more talk over OPEC cuts before it cut its gains after inventory reports showed larger gasoline and distillate builds than expected, but prices ran back up near their earlier highs by the close as it was leaked that “Saudi Arabia told major customers it was reducing supplies substantially next month in a move that could bring the kingdom's output below its implied OPEC target of 8.47 million barrels per day.” Crude inventories built 400,000 barrels, gasoline inventories built 3.8 million barrels, distillates built 5.6 million barrels, and refinery utilization rose 3.1% to 87.4%.

The U.S. dollar index and treasuries fell while the Dow, Nasdaq, and S&P mostly rose on hopes that a deal can be reached to bailout the automakers, but doubts over that deal late in the day did pare those losses and gains by the close to result in a relatively unchanged day.

Among the big names making news in the market today were Office Depot, Neiman Marcus, Kodak, Yahoo, AIG, GMAC, Citigroup, GM, Foster Wheeler, and Rio Tinto.

Gold caught one heck of a tailwind this morning knifing through one resistance level after another as if they did not exist. It is evident from the ferocity of the climb that the shorts were squeezed in a big way with a plethora of buy stops being touched off in the relatively low volume trading conditions. Here is another example of that lack of liquidity I have been referring to over and over again with the declining open interest creating huge pockets of air both above and below this market. A few well placed orders, either on the buy side or the sell side, and the cascade or upside catapult ensues.

One look over at the currency boards and it is easy to see why the gold shorts were in trouble this morning. The euro took off to the upside, the euro-yen cross soared, crude oil moved up and away from the $40 level and back came the “risk” trades. The “risk aversion” trades were reversed or halted as traders latched onto the auto bailout news and attempts by the Central Banks globally to inject liquidity as a signal to plow back into the commodity sector. Nearly every single commodity quote on my board was once again in blue. Even if anyone did not understand the exact nature of the computer algorithms that these black box hedgies are employing, it does not take much in the way of observation to grasp the fact that those things are geared to movement in the dollar and the equities. That is why the signals always produce the exact same effect in the markets. They are all basically using the same computers to do their thinking for them. Hedge funds are basically mindless traders and if they are all using the same signals, then the result will be that they plow into and out of markets all at the same time. Nowadays this is referred to in the investing world as “genius”; that is, until the hedge fund goes belly up and shuts its doors.

Nonetheless, gold has had an undeniably strong technical performance. It is trading well above its 50 day moving average and peaked today right on its 100 day moving average. That level is very close to the downsloping trendline of the recent wedge formation on the daily chart. Should gold be able to muster the strength to take out the 100 day and then horizontal resistance from late last month near $830 - $833, it has the very strong possibly of beginning a trending run. Keep in mind that levels of open interest are low and the market is relatively illiquid so we will still want to see new fresh buyers coming in and not short covering alone. Light support moves up to near the $790 level followed by stronger, more substantial support near $770.

I am a bit hesitant to say with complete confidence that the mining shares as indicated by the HUI and the XAU have completed a complete separation between themselves and the broader market but they gave the first solid hint of that yesterday. Today they furthered the amicable divorce. Even as the broader market indices came off their best levels of the session, the HUI and the XAU seemed very hesitant to give up their gains. Yesterday the HUI and the XAU managed their second consecutive close above the 50 day moving average. That is generally enough to turn the technical posture into a bullish one. Sure enough the shorts began running today with indices easily breaking through their respective horizontal resistance levels at the late November highs. That translates to roughly the 250 level in the HUI and the 101-102 level in the XAU. To give you an idea how improved the HUI chart has become, the 100 day moving average on its daily chart comes in near 277. That is less than 20 points away from today’s session high.” – Dan Norcini, JSMineset.com

I completely agree that a study of similar historical periods argues strongly for an equity rally. Those rallies in the past have had one year legs but for the moment we must wait to see what transpires.

I am cautious about being bearish on equities right now. Models of 1873 and 1929 show humdinger rallies during the worst of these periods.

The most likely time for a rally to occur is when Obama starts the nation's two trillion fiscal stimulus which will trigger the $8.5 trillion bailout of the system, starting an inflation few people can imagine.

No lender will fail to loan on a government contract that probably guarantees payment.

Over time this fiscal stimulus will be famous for only one thing - triggering hyperinflation.

Gold will trade at $1,650 but I am sure even that number could be very low. Reasonable people are saying $3,000 to $5,000.

Base metals are not staying as low as they are now in a hyper-inflationary environment.

When the fiscal stimulus fails to establish a sustainable recovery, it will have pulled the trigger for hyper-inflation. This is a currency event, not an economic event.

“February Gold closed up 34.6 at 808.8. This was 18 up from the low and 5 off the high.

March Silver finished up 0.35 at 10.2, 0.07 off the high and 0.06 up from the low.

The gold market seemed to be lifted by the combination of a falling Dollar and initial gains in the US equity market. However, the gold market generally held onto the gains into the early afternoon setback in the equity market and that in turn would seem to suggest that the Dollar action was perhaps the more dominating outside market force for gold prices. In fact, gold was probably given some additional lift from the early rally in energy prices, but like the stock market, the oil market also suffered an early afternoon setback. While the hope for a House passage remains in place the markets in general were disappointed in the lack of a deal on Wednesday.

The silver market generally held onto the early gains into the early afternoon washout seen in a host of other markets. Therefore, one could suggest that the silver bulls were to some degree independent throughout the trade Wednesday. Certainly seeing weakness in the US Dollar emboldened the silver bulls, especially since the Dollar generally remained weak throughout the trading session.”- The Hightower Report, Futures Analysis and Forecasting

	Product name	Total Tonnes	Total Ounces	Total Value
New York Stock Exchange Arca (NYSE Arca) AND Singapore Exchange (SGX) AND Tokyo Stock Exchage (TSE) AND Hong Kong Stock Exchange (HKEx)	SPDR® Gold Shares	757.89	24,366,840	US$ 18,705m
London Stock Exchange (LSE) AND Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse )	Gold Bullion Securities	117.00	3,761,690	US$ 3,037m
Australian Stock Exchange (ASX)	Gold Bullion Securities	11.51	369,000	US$ 299m
Johannesburg Securities Exchange (JSE)	New Gold Debentures	26.94	865,991	US$ 664m

Profile as of 12/9/2008
Total Net Assets	$1,600,975,133	Ounces of Gold in Trust	2,072,932.322
Shares Outstanding	21,050,000	Tonnes of Gold in Trust	64.48

Profile as of 12/9/2008
Total Net Assets	$2,101,990,461	Ounces of Silver in Trust	213,860,065.800
Shares Outstanding	216,650,000	Tonnes of Silver in Trust	6,651.79

A free, new stock report by Peter Zihlmann on San Anton Resource Corp. (TSX: SNN), Rio Tinto’s (RTP) job cuts, International Tower Hill’s (THM) drill results, Yamana’s (AUY) equity financing, Hecla’s (HL) mine plan acceptance, ECU’s (ECU.TO) increased resource estimate, and MAG’s (MVG) drill results 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.

Eastmain: MegaTEM Project Drilling Underway - More
- December 10, 2008 | Item | E-mail

Stillwater Mining Names New Director - More
- December 10, 2008 | Item | E-mail

Aurora Gold Corporation Announces a Significant Gold Occurrence Has Been Found at Colibri on One of the So Domingos Gold Project Areas - More
- December 10, 2008 | Item | E-mail

FNX Mining Suspends Nickel Ore Production and Reduces Workforce in Sudbury - More
- December 10, 2008 | Item | E-mail

Hecla Announces Mine Plan Acceptance - "Hecla Mining Company (NYSE:HL) today announced it has been notified by its banking group the mine plan is satisfactory. Accepting the mine plan confirms the bridge loan maturity date of February 16, 2009. The loan was part of the financing obtained to purchase the remaining 70.27% of the Greens Creek joint venture in April 2008." More
- December 10, 2008 | Item | E-mail

Freewest Updates Exploration Activities on Its 100%-Owned McFaulds Property in Northern Ontario - More
- December 10, 2008 | Item | E-mail

Nord Resources Closes Portion of Copper Hedge and Receives Proceeds of $1.5 Million - More
- December 10, 2008 | Item | E-mail

International Tower Hill Mines Ltd.: Livengood Gold Deposit Expands in all Directions - "International Tower Hill Mines Ltd. ("ITH" or the "Company") - (CDNX:ITH.V - News)(NYSE-A: THM)(Frankfurt:IW9.F - News) is pleased to announce the latest drill results from its 2008 resource expansion drilling program at its bulk tonnage Livengood gold project near Fairbanks, Alaska (see Table 1). These results, many from the edges of the 2008 Core Zone drill pattern or significant step outs, demonstrate the significant expansion potential of the deposit. Of the 13 new holes announced in this release, seven have ended in higher grade mineralization, punctuating the excellent depth potential of the deposit." More
- December 10, 2008 | Item | E-mail

Capstone Reports Final Drill Intercepts of Near Surface Copper-Gold at Minto Mine - More
- December 10, 2008 | Item | E-mail

Norsemont Mining Secures Deferral of Mitsui Payment - More
- December 10, 2008 | Item | E-mail

Golden Tag Updates Resource Estimate-Confirms Discovery of New Major Silver-Lead-Zinc Deposit at San Diego Project in Durango State, Mexico - More
- December 10, 2008 | Item | E-mail

Goldeye Announces Diamond Drill Program on Tyrrell Gold Project - More
- December 10, 2008 | Item | E-mail

BSG Resources Guinea is Expanding Its Operations in Guinea - More
- December 10, 2008 | Item | E-mail

La Mancha Resources Inc.: Recent VMS Drilling Suggests the Presence of a Supergene Zone at Hassai - More
- December 10, 2008 | Item | E-mail

Victory Nickel Announces Positive Hydrogeologic Study, Updates Minago Status - More
- December 10, 2008 | Item | E-mail

Trevali Receives Transmission Line Permit - More
- December 10, 2008 | Item | E-mail

Unico, Inc. Announces Update on Activities at the Deer Trail Mill and Processing Facility Including Production of Concentrate - More
- December 10, 2008 | Item | E-mail

Acadian Mining scales back zinc-lead operations - More
- December 10, 2008 | Item | E-mail

Tombstone Exploration Announces Assay Results From 2007 and 2008 Drill Programs - More
- December 10, 2008 | Item | E-mail

Lake Shore Gold Significantly Extends Bell Creek Mineralization - More
- December 10, 2008 | Item | E-mail

New CFO joins CanAlaska Uranium - Four drill programs for uranium starting January, 2009 - More
- December 10, 2008 | Item | E-mail

Blue Note Makes Significant Gold Discovery in N.B - More
- December 10, 2008 | Item | E-mail

Colorado Goldfields Reports Silver Assay Results (Part One of Two-Part Release) - More
- December 10, 2008 | Item | E-mail

El Capitan Precious Metals, Inc. Reports Additional Commercial Laboratory Results - More
- December 10, 2008 | Item | E-mail

VMS Ventures Inc.: Drill Hole RD-08-73 Intersects 11.70 Metres of 6.12% Copper, at Reed Lake Discovery Zone, Snow Lake, Manitoba - More
- December 10, 2008 | Item | E-mail

Gold Resource Corporation Conference Call - More
- December 10, 2008 | Item | E-mail

Gold Resource Corporation and Hochschild Mining plc Form Strategic Alliance; $5 Million Private Placement - More
- December 10, 2008 | Item | E-mail

Pinnacle's Silver Coin Continues to Grow with Latest Drilling Results, Including 54.87 Meters Grading 4.45 grams per ton Gold at Northern Limit - More
- December 10, 2008 | Item | E-mail

Gabriel Resources Ltd.: Court Decision Not Expected to Impact Permitting Schedule of Rosia Montana Project - More
- December 10, 2008 | Item | E-mail

Yamana Announces Increase in Previously Announced Financing to CDN$135 Million - "Yamana Gold Inc. (TSX:YRI - News; NYSE:AUY - News; LSE:YAU - News) is pleased to announce that it has amended the terms of the previously announced bought deal with a syndicate of underwriters led by Canaccord Capital Corporation and Scotia Capital Inc. (collectively, the "Underwriters") to increase the size of the offering by an additional 5,800,000 common shares (the "Common Shares") subject to receipt by the Company of all necessary regulatory approvals." More
- December 10, 2008 | Item | E-mail

ECU Silver Significantly Increases NI 43-101 Mineral Resource Estimate - "ECU Silver Mining Inc. ("ECU Silver" or the "Company") (Toronto:ECU.TO - News) is pleased to report the results of its fourth National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate (the "Resource Estimate") on its Velardena District Properties in Durango State, Mexico ("Velardena"). The results confirm a silver equivalent increase in Measured & Indicated resources of 6% to 40 million ounces ("oz") and an Inferred resource increase of 118% to 391 million oz of silver equivalent." More
- December 10, 2008 | Item | E-mail

MAG Silver Intersects More High Grade Silver/Lead/Zinc Mineralization at Cinco de Mayo - "MAG Silver Corp. (Toronto:MAG.TO - News)(NYSE-A: MVG) ("MAG") is pleased to announce assay and geological results from the ongoing drill program on its 100% owned Cinco de Mayo property in northern Chihuahua State, Mexico. Drilling is focused on establishing the district-scale extent, zoning and geological controls on mineralization in what is emerging as a large Carbonate Replacement system. " More
- December 10, 2008 | Item | E-mail

YAMANA GOLD Announces CDN$100 Million Equity Financing - "YAMANA GOLD INC. (TSX:YRI - News; NYSE:AUY - News; LSE:YAU - News) today announced that it has entered into an agreement with Canaccord Capital Corporation and Scotia Capital Inc. (the "Lead Underwriters") pursuant to which the Lead Underwriters have agreed to purchase for resale to the public by the Lead Underwriters and a syndicate of underwriters (collectively, the "Underwriters"), 16,700,000 common shares of Yamana on a "bought deal" basis, at a price of Cdn$6.00 per common share for aggregate gross proceeds to Yamana of Cdn$100,200,000." More
- December 10, 2008 | Item | E-mail

Rio Tinto to cut 14,000 jobs, slash spending - "Global miner Rio Tinto , saddled with nearly $40 billion in net debt, said it would cut 13 percent of its workforce, slash capital spending by more than half and sell more assets as it battles a collapse in commodity prices.

Rio, which mines a range of metals and minerals from aluminum and copper to gold and diamonds, has been under pressure to detail plans to cut borrowings since its share price slumped after larger rival BHP Billiton scrapped a $66 billion takeover bid for the company last month." More
- December 10, 2008 | Item | E-mail

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