-- Posted 16 December, 2008 | | Source: SilverSeek.com

The Metals:

Gold waffled within 1% of either side of unchanged in Asia and London and dropped to as low as $829.60 by a little before 8AM EST, but it then marched back higher in New York and ended near its session high of $841.78 with a gain of 0.59%.  Silver dropped as much as 22 cents to $10.42 by a little before 8AM EST before it shot to as high as $10.89 by about 11AM to see a gain of 2.35%, but it then fell back off in the last couple of hours of trade and ended with a gain of just 0.28%. 

Both metals have soared past their earlier highs in after hours access trade in reaction to the fed’s statement.  At the time of writing gold is over 2% higher from today’s close and has reached as high as $859.35 while silver is over 5% higher after hitting as high as $11.255.

Euro gold fell to about €609 on more euro strength, platinum gained $18 to $846, and copper fell a few cents to about $1.36.

Gold and silver equities rose over 2% in the first hour of trade before they fell back to see slight losses by late morning, but they then soared higher after the fed’s decision and ended with about 8% gains.

The Economy:

CPI fell the most on record and new housing starts and permits also fell to record lows. 

The fed announced that they wish to set a target range of 0.00% to 0.25% for the fed funds rate from their previous rate of 1.0%.  The fed stands ready to make large purchases of longer term treasury securities, agency debt, and mortgage-backed securities as conditions warrant.  They also intend to keep rates low “for some time.”  There was also a 75 basis point decrease in the discount rate to 0.25%.  They noted that financial markets are quite strained and that weak economic conditions are likely to continue.  They will use other measures to sustain their balance sheet at a high level.  Today’s actions were done with a unanimous vote.

There are no major economic reports due out tomorrow.

The Markets:

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

Oil rose to over $46 in early trade on more speculation over a large cut from OPEC, but more dismal demand reports brought prices back down to see a slight loss by the end of the day.

The U.S. dollar index plummeted and treasuries soared with the Dow, Nasdaq, and S&P after the fed gave the market exactly what it wanted with the slew of measures outlined above.  The kitchen sink has now been thrown.  What happens if it doesn’t work?  There is nothing else to try.  The dollar fell the most ever versus the euro for a two day period.

Among the big names making news in the market today were the FDIC, Goldman Sachs, Best Buy, Bank of America, and Comcast.

The Commentary:

“My Dear Friends,

Once again the gold banks stole your golden candy. They will do it again tomorrow and continue until they really have to trade real gold.

My question to the most financially able among you is as follows:

Have you had enough of the daily short side manipulation carried on by the same people blatantly on the floor of the make believe gold paper gold exchange, the COMEX? Over the weekend they thumbed their noses at you in an article concerning the increase in delivery taking. The COMEX member quoted laughed at us saying they had a warehouse of $8 billion that was too big to feel any effort to take delivery.

Maybe Madoff didn’t know about the COMEX. $8 billion in today’s world is chump change, however the chumps at the evil COMEX can’t count the amount of fingers they have.

To our most financially able readers, those who have all the physical gold they want, it only takes 21,000 one hundred ounce bars taken delivery of and removed from the COMEX to convert that market to a cash market from a make believe no gold, paper gold market and price maker.

STOP THE COMEX.

Respectfully yours,”- Jim Sinclair, JSMineset.com

“Dear Friends,

I am just returning from a short trip and am unable to put together much of a commentary on today’s market action so please reference the chart for the technical picture. I do want to note however that the HUI is trading above the 100 day moving average, a significant technical achievement. The XAU has not quite mustered the strength to best that level but the session high from yesterday and its current session high is right on that level so it is attempting a breakthrough. Should both indices manage two consecutive closes above that level, especially with the 10, 20, 40 and 50 days all turning higher, it will be difficult for even the most die-hard gold bear to argue against the move.

The fact is that the US Dollar’s horrendous fundamentals have caught up with it. The bear market rally caught a tremendous amount of speculative longs on the wrong side as the bottom fell out of it. We have remarked in the past that the rally in the dollar had NOTHING to do with fundamentals or safe haven buying as the talking heads in the press would have you believe but was rather the effects of a short-lived but massive repatriation of investment funds from abroad by US based hedge funds looking to deleverage, cut losses and meet margin calls and redemptions. I am particularly interested in what it is going to do after the new year begins as that will be the key to many other markets.” – Dan Norcini, JSMineset.com

“February Gold closed up 6.2 at 842.7. This was 9.2 up from the low and 0.3 off the high.

March Silver finished up 0.085 at 10.705, 0.155 off the high and 0.225 up from the low.

The gold market saw some pre-emptive strength ahead of the FOMC rate decision but the market wasn't expecting a 75 basis point rate cut and that in turn provided the gold market with an added burst of buying interest. With the US Dollar also diving to a fresh new low in the wake of the Fed's latest move to reduce interest rates, it was clear that the currency trade remained bearish toward the Dollar and that in turn provided the bull camp in gold with another bullish angle. With the US stock market at least initially emboldened by the latest Fed stimulus effort it was clear that a host of physical commodity markets were being lifted by inflationary hopes. In the end, it is somewhat surprising to such deflationary evidence in the morning only to see the market go in the opposite direction in the wake of the Fed's move.

Like the gold market the silver market managed to deflect the patently deflationary regularly scheduled US economic data and instead embraced the prospect of inflation in the future. Some silver and gold bulls might have been buying the metals because of rising uncertainty off the dire straights in the economy, while others might have simply been buying the metals because of the latest slide in the Dollar.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Ted Butler: Flight to safety first

Doug Pollitt on the possibly imminent end of paper gold

The Statistics:

As of close of business: 12/16/2008

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 and the LSE subtracted 1.29 tonnes.

COMEX Gold Trust (IAU)

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

Silver Trust (SLV)

Note: Change in Total Tonnes from yesterday’s data: 46.05 tonnes were removed from the trust.

The Stocks:

NovaGold’s (NG) bridge loan, Gold Reserve’s (GRZ) legal action, Agnico-Eagle’s (AEM) share issue and purchase of surface rights, Kinross Gold’s (KGC) tax notice, Great Basin’s (GBN) closed note financing, Indonesia’s new mining law, Keegan’s (KGN) project updates, Richmont’s (RIC) completed acquisition of Patricia Mining, Silver Eagle’s (SEG.TO) mine shut down, and Silver Dragon’s (SDRG.OB) transfer agreement 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:

Donner Metals Ltd.: Mineralization at McLeod Extended by High-Grade Intersections - More
- December 16, 2008 | Item | E-mail

Orex Exploration: Positive Drill Results East and Above Historic Boston-Richardson Belt at Goldboro Confirm the Discovery of New Stacked Gold Zones - More
- December 16, 2008 | Item | E-mail

Explor Resources Annual General Meeting - More
- December 16, 2008 | Item | E-mail

Rusoro Fully Committed to Its Bid for Gold Reserve - "Rusoro Mining Ltd. (CDNX:RML.V - News) ("Rusoro" or the "Company") is pleased to confirm its commitment to Gold Reserve shareholders and equity unitholders in respect of its premium, 3-for-1, all-share bid announced yesterday (the "Bid"). As of December 12, 2008 (the last trading day before the Bid was announced), the Bid represented a premium of 140% on closing prices and 209% on the 30-day volume weighted average prices, using Rusoro's and Gold Reserve's share prices for the relevant trading days on the TSX Venture Exchange and Toronto Stock Exchange, respectively." More
- December 16, 2008 | Item | E-mail

Richmont Mines Inc. Acquires Patricia Mining Corp. - "Richmont Mines Inc. ("Richmont") (Toronto:RIC.TO - News)(AMEX:RIC - News) and Patricia Mining Corp. ("Patricia Mining") (CDNX:PAT.V - News) today announced that the acquisition of Patricia Mining by Richmont has been completed." More
- December 16, 2008 | Item | E-mail

NovaGold optimistic it can extend key bridge loan - "NovaGold Resources (NG.TO: Quote, Profile, Research, Stock Buzz) is in talks on refinancing a $20 million bridge loan that is key to its ability to stay solvent, and the company is optimistic it will get a deal done, an official said on Tuesday." More
- December 16, 2008 | Item | E-mail

GoldSpring Announces Latest Assay Results - More
- December 16, 2008 | Item | E-mail

Bannerman Resources Announces Trading Halt - More
- December 16, 2008 | Item | E-mail

Kinbauri Options Fiedmont Pt/Pd Property to Pacific North West Capital - More
- December 16, 2008 | Item | E-mail

Agnico-Eagle to issue 900,000 shares at $38 apiece - "Agnico-Eagle Mines Ltd (AEM.TO: Quote, Profile, Research, Stock Buzz) (AEM.N: Quote, Profile, Research, Stock Buzz) said it will issue 900,000 common shares at $38 apiece to fund the purchase of surface rights and advance royalty payments at its Pinos Altos property in Mexico." More
- December 16, 2008 | Item | E-mail

El Nino completes acquisition in the DRC - More
- December 16, 2008 | Item | E-mail

Carlisle Goldfields closes private placement financing - More
- December 16, 2008 | Item | E-mail

Colorado Goldfields Reports Gold Assay Results (Part Two of Two-Part Release); CEO States Gold Analytics Is 100x of Standard Exploratory Drilling; Confirms Gold - More
- December 16, 2008 | Item | E-mail

East West Resource Corporation: Seagull PGE-Copper-Nickel Drilling Program Completed - More
- December 16, 2008 | Item | E-mail

Uranium Star Confirms 21 Kilometre Trend of Significant Vanadium Mineralization in Madagascar; Identifies Third Vanadium Trend in Northern Area - More
- December 16, 2008 | Item | E-mail

BacTech Partners With University of Toronto Researchers to Advance Its Bioleaching Technology - More
- December 16, 2008 | Item | E-mail

Rocmec Increases its Fleet of Thermal Fragmentation Units - More
- December 16, 2008 | Item | E-mail

Copper Fox announces the withdrawal of a private placement financing - More
- December 16, 2008 | Item | E-mail

Alturas Defines New Disseminated Gold Target at Its Chapi Chapi Copper-Gold Project, Peru - More
- December 16, 2008 | Item | E-mail

Firstgold Corp. Announces Production Begins at Relief Canyon - More
- December 16, 2008 | Item | E-mail

Zoloto Resources announces closing of second tranche of equity financing with Grafton Resource Investments Ltd. - More
- December 16, 2008 | Item | E-mail

Pacific North West Capital Corp. Options Fiedmont Platinum Group Metals (PGM) Property - More
- December 16, 2008 | Item | E-mail

Queenston's Deep Drilling Intersects Thick High-Grade Zone at Upper Beaver 30.3 g/t (0.88 oz/ton) Au With 1.0% Cu Over 20.8 m (68.2ft) - More
- December 16, 2008 | Item | E-mail

War Eagle Signs Letter of Intent With SaskPower International Inc. to Sample Fly Ash for Germanium - More
- December 16, 2008 | Item | E-mail

Latest Argentex drill results continue to expand Pinguino's mineralized system - More
- December 16, 2008 | Item | E-mail

Chariot Resources Provides Mine Plan Update - More
- December 16, 2008 | Item | E-mail

San Anton Announces Drilling Results Around Cerro Del Gallo - More
- December 16, 2008 | Item | E-mail

Lexam Explorations Inc: Otish Uranium Project Exploration Update - More
- December 16, 2008 | Item | E-mail

Amerigo Announces Shareholder Rights Plan - More
- December 16, 2008 | Item | E-mail

Golden Valley Mines Ltd.: Otish Basin Uranium Project Drill Result Update - More
- December 16, 2008 | Item | E-mail

Timmins Gold Intersects 11.64 g/t Gold Across 2 Meters, 6.17 g/t Gold Across 3 Meters, and 4.43 g/t Gold Across 4 Meters in Separate Drill Holes at Tequila - More
- December 16, 2008 | Item | E-mail

Zazu Receives More Excellent Results from Lik - More
- December 16, 2008 | Item | E-mail

Arabian American Development Provides Year-End Business Update - More
- December 16, 2008 | Item | E-mail

Rockcliff Focuses on Winter Drill Program at Snow Lake Project - More
- December 16, 2008 | Item | E-mail

GBS Gold Administration Update - More
- December 16, 2008 | Item | E-mail

Lake Shore Gold Significantly Extends Rusk Zone and Announces New High-Grade Gold Intercepts at Thunder Creek - More
- December 16, 2008 | Item | E-mail

Mineralogy takes up Waratah shares and extends offer acceptance date - More
- December 16, 2008 | Item | E-mail

Nevada Copper-Drilling Results Continue to Expand the Open-Pit North Deposit - More
- December 16, 2008 | Item | E-mail

Mediterranean announces new discovery at Celtik 6.51 g/t gold and 0.9 % copper over 18.4 metres - More
- December 16, 2008 | Item | E-mail

Corriente Resources Inc.: Marketing Process Moves to Exclusive Negotiation Stage - More
- December 16, 2008 | Item | E-mail

Tiger Resources Limited Presents its Annual General Meeting Presentation - More
- December 16, 2008 | Item | E-mail

Proposed acquisition of TEAL Minorities and the formation of a joint venture with Vale - More
- December 16, 2008 | Item | E-mail

Gold Reserve Commences Legal Action Against Endeavour and Rusoro - "Gold Reserve Inc. (TSX:GRZ - News) (AMEX:GRZ - News) announces that it has filed today an action in the Ontario Superior Court of Justice against Endeavour Financial International Corporation (“Endeavour") and Rusoro Mining Ltd. ("Rusoro") (TSX-V:RML.V - News) seeking an injunction restraining Rusoro and Endeavour from proceeding with the unsolicited offer, significant monetary damages, and various other items." More
- December 16, 2008 | Item | E-mail

Agnico-Eagle completes purchase of surface rights at Pinos Altos; Funded from issuance of common shares - "Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") announced today that it has agreed to issue 900,000 common shares at a price of US$38.00 per share to fund the previously announced purchase of surface rights and advance royalty payments in connection with the development of the Pinos Altos property in Chihuahua State, Mexico. The issuance is scheduled to close on or about December 19, 2008 and is subject to certain conditions, including the execution of definitive documentation and normal regulatory approvals, including the approval of the Toronto Stock Exchange." More
- December 16, 2008 | Item | E-mail

Silver Eagle Prepares for a Temporary Shut Down at Miguel Auza - "Silver Eagle Mines Inc. (TSX:SEG - News; "Silver Eagle" or the "Company") announces that it has received approval from the Mexican Government to an agreement reached with the Company's union to implement a temporary suspension of operations at its Miguel Auza Mine property located in Zacatecas, Mexico, due to the continued low prices of Silver, lead and zinc. The temporary suspension has been approved until June 15, 2009, and the suspension period could be extended." More
- December 16, 2008 | Item | E-mail

Kinross Gold Corporation: Notice to Former Common Shareholders of Aurelian Resources Inc. - "Kinross Gold Corporation (Toronto:K.TO - News)(NYSE:KGC - News) would like to provide a reminder of the approaching deadline for certain former common shareholders of Aurelian Resources Inc to make a joint tax election with Kinross. The deadline for providing the requisite tax information to Kinross is December 29, 2008. Details regarding the tax election, including eligibility, are contained in the offer documents and at https://www.taxelection.ca/kinross." More
- December 16, 2008 | Item | E-mail

Great Basin Gold Closes US$51.5 Million in Senior Secured Notes - "Great Basin Gold Ltd. ("Great Basin Gold" or the "Company") (TSX: GBG; AMEX: GBN; JSE: GBG) announces it has closed a Senior Secured Notes financing (the "Financing"), issuing a total of 51,500 Units and raising gross proceeds of US$51,500,000." More
- December 16, 2008 | Item | E-mail

FACTBOX-Indonesia's rich mineral resources - "Indonesia's parliament passed a new law on coal and mining on Tuesday that promises more certainty for investors but may not be enough to attract major new foreign investment to exploit rich mineral resources.

Several leading international mining firms, including Freeport-McMoran Copper & Gold (FCX.N: Quote, Profile, Research, Stock Buzz), already have operations in Indonesia, which has some of the world's largest deposits of gold, tin, coal, copper and nickel." More
- December 16, 2008 | Item | E-mail

Silver Dragon Receives Chinese Ministry of Commerce Approval for Sino-Top Equity Transfer Agreement - "Silver Dragon Resources Inc. (OTC BB:SDRG.OB - News) is pleased to announce that China's Ministry of Commerce (``MOC'') has issued the Certificate of Approval for the sale of 50% of Sanhe Sino-Top Resources & Technologies, Ltd. (``Sino-Top'') by Silver Dragon to its Chinese partner for RMB30 million (approximately USD$4.5 million), which is part of the Definitive Agreement reached between Silver Dragon and its state-owned Chinese joint venture partner, Exploration Unit of North China Nonferrous Geological Exploration Bureau, also known as Huaguan Industrial Corp. (``HIC'') (see press release dated July 14, 2008)." More
- December 16, 2008 | Item | E-mail

Indonesia's New Mining Law May Threaten Foreign Investment - "Indonesia's controversial new mining law -- which gives greater power to local governments and forces mine operators to process raw materials locally -- is likely to deter foreign investment at a time of falling global commodity prices, miners and industry analysts said." More
- December 16, 2008 | Item | E-mail

Indonesia parliament passes new coal-mining law - "Indonesia's parliament passed a new law on coal and mining on Tuesday that promises more certainty for investors but may not be enough to attract major new foreign investment to exploit rich mineral resources. Government officials say the new law will boost revenue from the mining sector as Jakarta is keen to gain greater control of its natural resources.

Factions in a parliamentary panel last week finally resolved differences over the bill, after more than three years of wrangling that created uncertainty for miners looking to invest in Indonesia, such as Newmont (NEM.N: Quote, Profile, Research, Stock Buzz) and Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz)." More
- December 16, 2008 | Item | E-mail

Keegan Provides Project Updates for Ghanian Gold Projects - "Keegan has drilled 118,000 meters to date including 58,000 meters this year at its Esaase project, where Keegan is currently delineating and expanding an existing 43-101 resource. Keegan will complete infill and stepout drilling by Dec 15, 2008 in preparation for its next resource estimate. Results are currently pending from both the infill and aggressive stepout drilling to the south and down dip drilling on the existing resource." More
- December 16, 2008 | Item | E-mail

- Chris Mullen, Gold Seeker Report

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