Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 2% and 6% on the Week

	Close	Gain/Loss	On Week
Gold	$835.95	-$23.30	+2.05%
Silver	$10.82	-$0.30	+6.08%
XAU	112.75	+1.70%	+4.17%
HUI	271.37	-1.21%	+3.85%
GDM	830.41	+1.31%	+4.66%
JSE Gold	2047.62	-134.86	-13.08%
USD	81.53	+1.63	-2.43%
Euro	139.24	-3.51	+4.12%
Yen	112.20	+0.60	+2.26%
Oil	$42.36	+$0.69	-8.47%
10-Year	2.131%	+0.056	-17.69%
Bond	141.3906	-1.1563	+4.01%
Dow	8579.11	-0.30%	-0.59%
Nasdaq	1564.32	+0.77%	+1.53%
S&P	887.88	+0.29%	+0.93%

Gold dropped almost $30 to as low as $829.30 by a little before 8AM EST before it rebounded in New York, but it still ended with a loss of 2.7%. Silver fell all the way to $10.538 before it also rebounded in New York, but it still ended with a loss of 2.7%.

Euro gold rose to about €604, platinum lost $12 to $844.50, and copper rose a few cents to about $1.31.

Gold and silver equities pretty much ignored the nearly 3% losses in the metals and waffled on either side of unchanged for most of the day, but they then surged higher in late trade and the XAU and GDM ended with nearly 2% gains while the HUI ended over 1% lower on the day.

There were no major economic reports today, but “Treasury Secretary Henry Paulson said Friday that Congress will need to release the last half of the $700 billion rescue fund because the first $350 billion has been committed.”

Next week’s economic highlights include GDP, the Chain Deflator, Existing Home Sales, Michigan Sentiment, and New Home Sales on Tuesday, and Durable Goods Orders, Initial Jobless Claims, and Personal Income and Spending on Wednesday.

The January crude contract, which expired today, fell to $36.22 while the February contract rose to $42.36 as traders rolled over their contracts into the new front month and speculated that the bailout of the automakers will help spur demand.

The U.S. dollar index soared higher as the Bank of Japan cut its interest rates in another sign that the rest of the world is joining the fed in the race to near zero interest rates.

Treasuries fell as traders took profits from the remarkable run in bonds lately.

The Dow, Nasdaq, and S&P rose nicely at the open on word that the automakers finally got their bailout, but all three indices fell back near unchanged by late morning and ended mixed on apprehension over the effectiveness of recent bailouts and other measures taken to help the economy.

Among the big names making news in the market Friday were Panasonic and Sanyo, Toyota, GM, Chrysler, JPMorgan, Goldman Sachs, UBS, Deutsche Bank, Bank of America, Weyerhaeuser, Discover, and Capital One.

Yes, gold is a currency. To deny that is simply idiotic. However there are degrees of relationship that are exaggerated by the gold banks for their perma-bearish short manipulation. Today, like yesterday and all the days before, the Comex gang ripped off your gold price lollypop. Minus $22 between today and yesterday is somewhat over the top. The euro versus the US dollar is a simple equation. It is a financial value comparison between the world’s largest debtor nation’s currencies, the US dollar and a creditor group of nation’s currency, the euro. Now you understand.

Manipulation of the gold price can be stopped if delivery of 21,000 contracts are taken and moved out of the Comex warehouse. We absolutely do not seek to break the exchange, we simply wish to stop manipulation that uses your money to collect their profits.

Two of my friends reading this who we have nicknamed Dr. No and Chung Phat could, if they wished, bring an end to this tomorrow. You can in three months 100oz bar by 100 oz bar.”- Jim Sinclair, JSMineset.com

News that the American automakers would gain access to the government’s political slush fund, also known in some circles as the TARP – Troubled Asset Relief Program – sent the Dollar skyward and was initially good for a pop in the US equity futures. Yes sireee – now that all those concessions have been wrung out of the unions to enable Ford, GM and Chrysler to be competitive (excuse me – my alarm clock just went off and I woke up from my dream) – we can expect to see these companies swimming in profits once again. Right along that line Ford announced today that it was planning on bringing a line of hybrids, battery-hybrids and electric cars to production by 2012 (down here we call those things Go-Carts). Nice timing guys – gasoline prices are headed to $1.00 gallon and Detroit announces a line of battery powered cars. Yep – that should prove to be a real winner. Way to think outside the box!

While some are no doubt cheering the news and applauding the “bold and daring” political decision to back the loans that the American Automobile industry is screaming for, personally, I view it as a sad day in American capitalism. It seems to me that what we have no come down to in this nation is the rewarding of failure and mediocrity. We all know that car sales have slowed for all the entire automotive industry yet we do not see Honda or Toyota on their knees begging the political masters for money to keep them in existence in current form. I suspect that from this point forward, American industry will be spending far more money on staffing their lobbyists instead of research and development. And why shouldn’t they? It works. I should point out herein the interest of fairness that to Ford’s credit, they said that they do not need any short term financial assistance but are concerned what a possible failure of GM and Chrysler would do to them.

Perhaps after the unions have killed the goose that laid their golden egg the US auto industry can go the way of the US steel industry which also could not compete with foreign competition because of the outrageous burdens imposed upon it by the unions. I read the other day that Chrysler was going to shutter its plants for a month in order to reduce costs – yet did you know that the unionized workers will still receive a full 95% of their regular pay over that period. How would you like to get an extra month’s vacation and still get paid nearly all of your salary for sitting on your duff? And Detroit wonders why it cannot compete? Mark my words – we have not seen the last of the US automotive CEO’s begging for money from Washington. I suspect that we will also see them testifying before Congress about high medical insurance costs for their workers and the need to offload that expense onto the US taxpayers as well. My guttural response to all this is to say let’s just all go back to riding horses and a pox on their entire house.

All of these companies could go into Chapter 11 and reorganize, get out from under the ridiculous burdens imposed upon them by the unions, and begin producing vehicles that Americans are clamoring to buy and emerge meaner, leaner and stronger but in today’s climate that might mean some pain and hardship for a period of time – something which our noble statesmen in Washington cannot stomach as having occurred on their watch. Instead we get corporate welfare run amok and an unholy alliance between business and politicians. Please do not misunderstand – I want the US auto industry to succeed – but not at the cost of subsidizing stupidity.

My rant about all this is to state that if somehow this is all being viewed as Dollar friendly, such views are better likened to whistling past a graveyard in the hopes that one can convince themselves how brave and fearless that they are when in reality fear is clawing at your belly. Where does it all end? What industry will be next in line for goodies? Don’t forget we have not even taken into account some of the various states that are now officially bankrupt and are clamoring for a piece of the pie. The federal bailouts and loan guarantees might be one thing if the US were a creditor nation and possessed a large pool of savings. It has neither but is hopelessly in debt and merely compounding its predicament further by giving away money which it does not have, borrowing those sums from China. It would seem that Washington has become nothing but a cash cow milking future generations of Americans who are not yet even born for they are the ones that will be paying for this in one way or the other.

With the short-sighted ninnies forgetting the very reasons that they sold off the Dollar beginning a few days ago, gold was promptly trashed on the Comex moving further away from the $880 level and dropping until it uncovers the zone in which buyers become active. We are now probing for support so that the lines can be drawn on the chart to establish some sort of trading range. Right now it looks as if $830 is comfortable for buyers. That level corresponds precisely with the former swing high made back in November which at the time served to blunt upward momentum. To see it functioning as support is therefore encouraging as the reverse polarity effect kicks in (former resistance zones become support zones and vice versa for technical analysis purposes). Should this level be unable to hold, there is further support near the $820 level and more substantial support below that near the $805 level. Upside resistance centered around the $880 level will need to give way for gold to run to the next resistance level above that at $900.With liquidity rapidly drying up volatility should be expected to be quite high. Many traders are already gone for the holidays or will be leaving this afternoon not returning until the first of the New Year.

On the delivery front, another 36 deliveries were posted today bringing the total for December to 1.32 million ounces. Registered gold is at 2.83 million as of yesterday. Open interest in the December is moving down as the month comes to an end and of yesterday stood at 370 contracts remaining.

It should be noted that the mining shares are holding relatively well today - something which should not exactly inspire a great deal of confidence among the paper gold shorts at the Comex. The XAU in particular seems very reluctant to move much lower today. It is finding support right at its 10 day moving average. That average, the 20 day and the 40 day are all now moving solidly higher and are above the 50 day – a bullish technical picture. I would ideally like the see the XAU get back above the 100 day to put another nail in the bears’ coffin.

Crude oil continues to plummet and does indeed look like it is going to $30 as expected. The February contract has been reluctant to follow January lower as traders think that the OPEC announced production cuts might work but call me skeptical. That is one of the reasons we are seeing some weakness in gold by the way. When crude moves lower most of the rest of the commodity sector tends to move lower with it and that emboldens the gold bears and unnerves some of the weaker longs.

The Dollar bounce took it back above the 100 day moving average on the continuous daily chart but it is still well below the 50 day moving average up near the 8540. Trying to read too much into technical chart action at this time of year becomes increasingly suspect since so many firms and players are closing down positions, booking profits or taking losses and calling it quits until next year. The first full week of trading in the New Year is far more significant than what happens over the next couple of weeks mainly because the low volume and lack of liquidity exaggerates everything, both on the upside and the downside. Should the Dollar be able to muster enough year end short-covering related buying to take it back up near 84.50 – 85.00 I would expect to see sellers emerging once again.

Bonds are finally, showing a bit of weakness if a setback in price of such “dinkiness” could be considered weakness. I still marvel that anyone in their right mind would want to own long term US government debt as a “safe haven”…” - Dan Norcini, More at JSMineset.com

“February Gold closed down 23.2 at 837.4. This was 3.4 up from the low and 4.8 off the high.

March Silver finished down 0.27 at 10.85, 0.03 off the high and 0.03 up from the low.

The gold market seemed to fade as the session progressed and that wasn't surprising considering that the Dollar remained strong for most of the trading session. It also seemed like the US stock market was somewhat disappointed in the ultimate auto sector bailout plan or perhaps many markets were simply expecting too much from the situation. Clearly the gold market continues to be greatly influenced by the action in the currency markets but one also got the sense that part of the retrenchment in gold prices was book balancing in the wake of recent compacted gains.

While the silver market managed a noted bounce off the early morning lows, the trade really didn't seem to be significantly cheered on by the US auto sector bailout announcement on Friday morning. Certainly persistent strength in the US Dollar cast a cloud over a number of physical commodity markets on Friday, especially after the Dollar rally in the prior trading session. Since the silver market also didn't seem to garner any spillover support from an attempt to rally copper prices, that could suggest that sentiment toward silver was somewhat fixated on the bear's case.”- The Hightower Report, Futures Analysis and Forecasting

Note: Change in Total Tonnes from yesterday’s data: The LSE added 0.76 tonnes.

Note: Change in Total Tonnes from yesterday’s data: 1.07 tonnes were added to the trust.

Note: Change in Total Tonnes from yesterday’s data: 122.79 tonnes were added to the trust.

Rusoro’s (RML.V) gold production and NovaGold’s (NG) extended maturity date on its bridge loan were among the big stories in the gold and silver mining industry making headlines Friday.

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

Richmond Minerals Inc. Announces No Material Change - More
- December 19, 2008 | Item | E-mail

Olivut Resources Ltd. Announces Year End Financial Results - More
- December 19, 2008 | Item | E-mail

Pele Mountain Announces Closing of Financing - More
- December 19, 2008 | Item | E-mail

Skyline Gold Announces Private Placement - More
- December 19, 2008 | Item | E-mail

Yukon-Nevada Gold Corp. closes private placement - More
- December 19, 2008 | Item | E-mail

Norsemont Mining Closes C$6 Million Private Placement - More
- December 19, 2008 | Item | E-mail

Nevada Copper Announces Results of Annual and Special Meeting of Shareholders - More
- December 19, 2008 | Item | E-mail

Shoreham Welcomes Andriyko Hershak to the Board of Directors - More
- December 19, 2008 | Item | E-mail

Norsemont Mining Clarifies Listing Review - More
- December 19, 2008 | Item | E-mail

Laurion Mineral Exploration Inc. completes the sale of four mining claims to Goldcorp Canada Ltd.; Acquisition of Clary Iron Property assaying up to 49.3% Fe - More
- December 19, 2008 | Item | E-mail

Medallion Arranges Up To $250,000 Flow-Through Share Private Placement - More
- December 19, 2008 | Item | E-mail

HudBay Receives Meeting Requisition From Shareholder - More
- December 19, 2008 | Item | E-mail

Tamerlane Closes C$400,000 Financing - More
- December 19, 2008 | Item | E-mail

Bonaventure Enterprises Inc.: News Release - More
- December 19, 2008 | Item | E-mail

Breakwater Announces Sale of Lapa Royalty to Agnico-Eagle - More
- December 19, 2008 | Item | E-mail

Century Comments on Purported Takeover Bid - More
- December 19, 2008 | Item | E-mail

Strateco Resources Inc.: Scoping Study Now Available - More
- December 19, 2008 | Item | E-mail

Merc Announces Start of Work on Damoti Lake Gold Project - More
- December 19, 2008 | Item | E-mail

Geoinformatics Completes 1 for 10 Share Consolidation - More
- December 19, 2008 | Item | E-mail

Frontera Copper Announces Waiver of Application of Shareholder Rights Plan - More
- December 19, 2008 | Item | E-mail

Pinnacle Completes Private Placement of Units - More
- December 19, 2008 | Item | E-mail

Chancery Resources Comments on Recent Stock Activity - More
- December 19, 2008 | Item | E-mail

Bear Lake Gold Announces its Financial Results for the Year Ended September 30, 2008 and Phase 1 Work Program at Larder Lake - More
- December 19, 2008 | Item | E-mail

Guyana Goldfields Inc. Announces Filing of Amended and Restated Financial Statements and Management's Discussion and Analysis - More
- December 19, 2008 | Item | E-mail

IBX Announces Closing of Second Private Placement - More
- December 19, 2008 | Item | E-mail

San Anton Announces New Director - More
- December 19, 2008 | Item | E-mail

Bravo Resource Partners Signs Joint Venture on World Class Gold Mine in Ghana, Africa - More
- December 19, 2008 | Item | E-mail

Marathon Project Receives Positive Feasibility Study - More
- December 19, 2008 | Item | E-mail

Minera Andes anticipates cash call at the San Jose project - More
- December 19, 2008 | Item | E-mail

Rusoro Reports Record Gold Production and Record Low Cash Costs at Choco 10 - "Rusoro Mining Ltd. (CDNX:RML.V - News) ("Rusoro" or the "Company") is pleased to report that it has achieved record gold production at historically low cash costs at its Choco 10 mine for November 2008. The Company also reports that operations at the Isidora mine continue to exceed its expectations. Both mines are located near the town of El Callao in Bolivar State, Venezuela." More
- December 19, 2008 | Item | E-mail

Victoria Gold Completes Previously Announced CDN$4 Million Private Placement Financing - More
- December 19, 2008 | Item | E-mail

Uranium Resources, Inc. Reduces Annual Costs by $2.2 million - More
- December 19, 2008 | Item | E-mail

Aurora Gold Corporation Announces Further Mineralisation at the So Joo Gold Project Areas Located in the Tapajos Gold Province, Para, Brazil - More
- December 19, 2008 | Item | E-mail

NovaGold Reaches Agreement to Extend Maturity Date on Rock Creek Bridge Loan - "NovaGold Resources Inc. (the "Company" or "NovaGold") (Toronto:NG.TO - News)(NYSE-A: NG) is pleased to announce that it has entered into an agreement with Auramet Trading LLC. ("Auramet") to extend the maturity date on any portion of the Company's $20 million bridge loan not paid back by December 29, 2008 to March 13, 2009. As part of this agreement, the conversion price of the outstanding balance of the bridge loan will be reduced to the volume weighted average trading price on the Toronto Stock Exchange for the 5 days ending December 18, 2008 of C$1.53, the exercise price of the 750,000 Warrants issued at the time the bridge loan was advanced will also be repriced to C$1.53 and the Company will issue an additional 1,000,000 common share purchase warrants with a term of two years at an exercise price of C$1.53." More
- December 19, 2008 | Item | E-mail

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