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Gold Seeker Closing Report: Gold and Silver End Barely Lower In Mixed Trade; Miners Gain

By: Chris Mullen, Gold-Seeker.com


-- Posted 13 January, 2009 | | Source: SilverSeek.com

 

Close

Gain/Loss

Gold

$820.45

-$0.05

Silver

$10.66

-$0.06

XAU

109.76

+2.66%

HUI

265.22

+2.48%

GDM

815.88

+2.52%

JSE Gold

2174.57

-10.40

USD

84.20

+1.12

Euro

131.96

-1.68

Yen

112.16

+0.06

Oil

$37.78

+$0.19

10-Year

2.297%

-0.012

T-Bond

134.828125

UNCH

Dow

8448.56

-0.30%

Nasdaq

1546.46

+0.50%

S&P

871.79

+0.18%

 
 

 

The Metals:

 

Gold fell as much as $6.78 to $813.72 by midday in London before it rebounded in New York to see a gain of $10.20 at $830.70 around 10:15AM EST, but it then fell back off into the close and ended near unchanged on the day.  Silver dropped as much as $0.30 to $10.42 around 9AM EST before it rebounded to see a gain of $0.115 at $10.835 by late morning in New York, but it also fell back off in the last couple hours of trade and ended with a loss of 0.56%.

 

Euro gold rose to about €622 on euro weakness, platinum lost $23.50 to $937, and copper gained over 5 cents to about $1.53.

 

Gold and silver equities rose over 3% in the first half hour of trade before they chopped slightly lower for most of the rest of the day, but they then rallied back higher in late trade and ended with about 2.5% gains.

 

The Economy:

 

Report

For

Reading

Expected

Previous

Trade Balance

Nov

-$40.4B

-$51.0B

-$56.7B

Treasury Budget

Dec

-$83.6B

-$83.0B

-$48.3B

 

“Federal Reserve Chairman Ben S. Bernanke warned that a fiscal stimulus won’t be enough to spur an economic recovery and that the government may need to buy or guarantee banks’ tainted assets to revive growth.

 

‘Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,’ Bernanke said in a speech today at the London School of Economics. ‘More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.’”

 

The federal government already has run up a record deficit of $485.2 billion in just the first three months of the current budget year, the Treasury Department said Tuesday.

 

The deficit is on track to surpass $1 trillion for all of fiscal 2009 and some economists believe it could go much higher.

 

The deficit for December totaled $83.6 billion, a sharp deterioration from a year ago when the government managed a surplus of $48.3 billion. Wall Street economists surveyed by Thomson Reuters expected a slightly lower deficit of $83 billion.

 

All the red ink is occurring because of the massive spending on the $700 billion financial rescue program and a prolonged recession which has depressed tax revenues.

 

The imbalance from October through December is the highest on record for a first quarter and surpasses the mark for a full budget year of $454.8 billion set last year.”

 

Tomorrow at 8:30AM EST brings Import and Export Prices for December and Retail Sales for December expected at -1.2%.  Excluding auto sales, sale are expected at -1.3%.  At 10AM is the Business Inventories report for November expected at -0.5% and at 2PM is the release of the fed’s Beige Book.

 

The Markets:

 

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

 

Oil rose on rumors over more OPEC cuts as Saudi Arabia announced it will exceed already stated cuts, but gains were limited as another demand forecast was lowered again.

 

The U.S. dollar index rose as the trade deficit was not as large as expected.

 

Treasuries remained near unchanged while the Dow, Nasdaq, and S&P traded mixed and also ended near unchanged as worries over earnings reports were offset by the increasing likeliness that the second round of the TARP fund will be passed through congress despite countless problems and questions over the success and use of the first half.

 

Among the big names making news in the market today were Yahoo, Whole Foods, Sony, Citigroup, Beazer, and CVS.

 

The Commentary:

 

Dear CIGAs,

 

Gold showed a good deal of resiliency this morning even in the face of a stronger dollar as it bounced from near the intersection of upsloping trendline support and horizontal support near the $810 level. Whether the bounce in crude oil from off of support had anything to do with its strength is unclear but the fact that it managed this is friendly nonetheless.

 

The dollar’s gains were supposedly related to the improvement in the balance of trade picture although  some of its strength against the Euro in particular was in association with ratings agency warnings about some euro-zone countries’ credit worthiness. Yesterday it was Spain that made that news- today it was Ireland and Greece. There was even chatter about a breakup of the EMU (European Monetary Union) as a result. Jim has long said that the Euro is really a basket of junk that owed its strength to the fact that is was simply NOT the Dollar. This has been proven correct as there are now forces at work in Euroland which are creating stresses in that monetary union. Germany in particular has become a sort of safe haven among Euro debt buyers with money flowing into German bunds shoving yields there lower while other nations are seeing rising yields. This should prove to be quite interesting as the year progresses. The point in all this is that perhaps some of the money that might have been flowing into Euro debt is now making its way to gold. That would explain the strength in gold even in the face of the weaker euro. At some point in this endgame, nearly all of these paper currencies are going to end up forfeiting investor confidence as the chinks in their façade become more and more visible to even casual observers.

 

Speaking of the balance of trade - The numbers for November 2008 were released this morning and they showed a remarkable shrinkage of the trade deficit to $40.44 billion where the average consensus number was $51.30 billion. Both exports and imports were down with imports dropping a whopping 12% versus the previous month coming in at $183.25 billion, the lowest reading since November 2005. It is evident that the slowing economy severely curtailed consumer spending. The resulting slowdown impacted even the trade deficit with China which shrank to $23.06 billion versus October’s deficit of $27.96 billion.

 

The trade deficit number was the lowest since November 2003.

 

Looking at the numbers in a bit more detail, we find that in November, the import price of crude oil fell 27.5% to an average of $66.72/barrel versus that of October at $92.02. The US- OPEC trade deficit number for November was $5.61 billion – that is the lowest number since April 2004 when it came in at $5.3 billion. Nothing like cheap oil to bring down the trade numbers… wait until next month!

 

My thinking is that were it not for the stronger dollar, the deficit would have narrowed even more. Exports in dollar terms were $142.8 billion versus $151.54 billion in October. In the ag sector for instance, some would-be grain buyers are watching the dollar and are putting off buying as the US grains become more expensive due to it strength. Same goes for some of our domestically produced meat. Exported related businesses here want a weaker dollar while importers love a stronger dollar. The former makes our goods cheaper overseas and stimulates buyers to act while the latter helps consumers here at home by making the cost of imported goods lower.

 

Open interest showed a sharp drop in yesterday’s session as more than 15,000 contracts were liquidated. That was expected given the size of the sell off. I do believe however that some of this fall off in the open interest is related to the commodity index fund rebalancing that continues to occur. Index funds, instead of rolling out of the February into the April ahead of the delivery period for the Febs simply chose not to re-establish longs in the April in order to bring their portfolio holdings into line with the new weightings for gold. Keep in mind that the percentage weighting of gold was lowered in some of the indices and that means either longs are liquidated outright or new purchases are simply skipped. Either way to see gold moving higher in the face of this is again encouraging. It shows that there are other buyers are work besides the index funds.” - Dan Norcini, More at JSMineset.com

 

“If all the effort to bring down the COMEX gold & silver futures markets this past December, by taking delivery of the metal, were just focused on silver - the goal of much higher silver AND GOLD prices would have been achieved for the following reasons:  1. Both COMEX inventories for gold and silver were depleted over 45% - but the COMEX silver market is much smaller (in USD$) than COMEX gold and would have been easily exceeded. 2. There is no Fort Knox or New York basement full of the stuff to replenish COMEX inventories. 3. The shutting down of base metal mines due to low prices will greatly effect silver inventories (70% of its annual mine supply). 4. The gold-silver ratio is at near historic highs - making it much more undervalued. 5. There are numerous new industrial and medical uses for silver that will increase consumption. This makes silver the obvious choice to focus on.

 

When the COMEX silver inventories are depleted and the contract defaults, it will cause the price to rapidly rise. Gold will follow for the same reasons - because the paper price for each will be proven invalid.” – Charles Rapp

 

“February Gold closed down 0.3 at 820.7. This was 2.7 up from the low and 9.3 off the high.

 

March Silver finished down 0.07 at 10.68, 0.09 off the high and 0.13 up from the low.

 

After starting out under pressure, the gold market managed to climb back into positive ground ahead of mid session and it managed the recovery in the face of lingering strength in the US Dollar. While one might have expected the gold market to fall back in the face of a better than expected Chicago Purchasing Managers report and in the face of a sharp narrowing of the US Trade Deficit, the gold market instead seemed to garner support from the scheduled data flow. However, it is also possible that the recovery bounce in the oil market provided some spillover buying support for gold and that in turn might suggest that the US numbers weren't as important as one might have expected them to be.

 

The silver market started out weaker but managed to reject some of the early selling pressure Tuesday and at times the silver market even marked some time in positive territory. With gold and copper prices spending a lot of time in positive ground on Tuesday the silver market probably saw support from both the industrial metals and financial market angles. Clearly the silver market had to see some support from the industrial angle from the better than expected Chicago Purchasing Managers report but the fact that US equities were unable to sustain the morning gains seemed to play a hand in the mid day setback in silver prices.”- The Hightower Report, Futures Analysis and Forecasting

 

GATA Posts:

 

 

A crack at Morgan's gold suppression sneaks into Forbes

Hedge-funders bullish on gold, guns, inflatable lifeboats

Gene Arensberg's 'Got Gold Report'

Ambrose Evans-Pritchard: Bond bubble is accident waiting to happen

Ted Butler: Gold COT deterioration

 

The Statistics:

As of close of business: 1/12/2009

Gold Warehouse Stocks:

8,555,768

-

Silver Warehouse Stocks:

127,456,422

-319,241

 

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 

 

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

787.60

25,322,281

US$ 20,939m

London Stock Exchange (LSE) AND Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse )

Gold Bullion Securities

116.12

3,733,327

US$ 3,065m

Australian Stock Exchange (ASX)

Gold Bullion Securities

11.51

374,333

US$ 304m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

26.93

865,667

US$ 715m

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

 

COMEX Gold Trust (IAU)

Profile as of 1/12/2009

 

Total Net Assets

$1,780,395,500

Ounces of Gold
in Trust

2,170,719.643

Shares Outstanding

22,050,000

Tonnes of Gold
in Trust

67.52

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

 

Silver Trust (SLV)

Profile as of 1/12/2009

 

Total Net Assets

$2,518,096,803

Ounces of Silver
in Trust

227,096,294.800

Shares Outstanding

230,150,000

Tonnes of Silver
in Trust

7,063.48

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

 

The Stocks:

 

Western Goldfields (WGW) fuel hedging, Solitario’s (XPL) drill results, NovaGold’s (NG) clarification, Exeter’s (XRA) drill results, International Tower hill’s (ITH) drill results, Apex Silver’s (SIL) filing for bankruptcy, Great Panther’s (GPR.TO) production, First Majestic’s (FR.TO) production, Endeavour’s (EXK) production, and Minefinders’ (MFN) production were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1.  Jaguar

JAG +7.50% $4.30

2.  Randgold

GOLD+7.05% $39.35

3.  IAMGOLD

IAG +6.27% $5.76

 

LOSERS

1.  ITH

THM-9.09% $1.50

2.  Vista

VGZ-8.22% $1.34

3.  Alexco

AXU -6.61% $1.13

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:

Azteca Intercepts Massive Zinc, Lead, and Silver at Two Mile - More
- January 13, 2009 | Item | E-mail


No Relationship Between GoldPoint Resources, Inc. (Nevada) and Goldpoint Resources Corporation (Ontario, Canada) - More
- January 13, 2009 | Item | E-mail


Dia Bras Announces Construction of a New Mill at the Bolivar Mine and Temporary Shutdown of the Cusi Pilot Mining - More
- January 13, 2009 | Item | E-mail


Evolving Gold Continues to Expand the Mineralized Zone At Rattlesnake Hills, Wyoming - More
- January 13, 2009 | Item | E-mail


Hawk Releases Final Drilling Results on Holdsworth Soocana Vein System, Metallurgical Testing of the Black Sands Ongoing - More
- January 13, 2009 | Item | E-mail


Peru mining workers losing jobs as metals plummet - "Thousands of workers in Peru's vast mining sector have lost their jobs as global mineral prices sink and stall investments, a sign that the traditional engine of the Andean country's economy is slowing sharply.

The National Federation of Mine and Steel Workers says more than 5,500 workers have lost their jobs since December, while the Labor Ministry says at least 4,000 miners are out of work." More
- January 13, 2009 | Item | E-mail


Osisko Extends South Barnat to 1200 Metres Length - More
- January 13, 2009 | Item | E-mail


Verena Projects Update - More
- January 13, 2009 | Item | E-mail


Apex Silver Files for Reorganization Under Chapter 11 of the U.S. Bankruptcy Code - "GREAT PANTHER RESOURCES LIMITED (Toronto:GPR.TO - News) (the "Company") reports that 2008 production totaled 1,809,720 silver equivalent ounces (Ag Eq Oz), exceeding the target of 1.75 million Ag Eq Oz. Both of Great Panther's 100% owned Mexican mines exceeded their targeted production, with 1,122,482 Ag Eq Oz at Guanajuato and 687,238 Ag Eq Oz at Topia. Total metal production for 2008 was 1.21 million ounces of silver, 6,300 ounces of gold, 876 tonnes of lead and 1,074 tonnes of zinc. Significantly, quarterly production records were set in the fourth quarter, while increasing production and implementing substantial and successful cost reductions." More
- January 13, 2009 | Item | E-mail


Great Panther Exceeds 2008 Production Target with Record-Breaking Fourth Quarter - "GREAT PANTHER RESOURCES LIMITED (Toronto:GPR.TO - News) (the "Company") reports that 2008 production totaled 1,809,720 silver equivalent ounces (Ag Eq Oz), exceeding the target of 1.75 million Ag Eq Oz. Both of Great Panther's 100% owned Mexican mines exceeded their targeted production, with 1,122,482 Ag Eq Oz at Guanajuato and 687,238 Ag Eq Oz at Topia. Total metal production for 2008 was 1.21 million ounces of silver, 6,300 ounces of gold, 876 tonnes of lead and 1,074 tonnes of zinc. Significantly, quarterly production records were set in the fourth quarter, while increasing production and implementing substantial and successful cost reductions." More
- January 13, 2009 | Item | E-mail


First Majestic Silver Corp.: Production Increases 27% in 4th Quarter - "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 fourth quarter ending December 31, 2008 increased to 1,070,903 equivalent ounces of silver representing a 27% increase over the prior quarter production and an increase of 6% over the same quarter in the prior year." More
- January 13, 2009 | Item | E-mail


Gold Resource Corporation Begins Open Pit Pre-Stripping at El Aguila Project - More
- January 13, 2009 | Item | E-mail


Further exploration planned for Northern Empire Mine, Nortoba-Tyson - Roxmark 2009 gold exploration program will focus on properties closest to Beardmore mill - More
- January 13, 2009 | Item | E-mail


Endeavour Silver Achieves Fourth Consecutive Year of Record Silver Production in 2008, Targets Substantial Growth in 2009 - "Silver production in Q4, 2008 from the Company's two operating silver mines in Mexico, Guanacevi and Guanajuato, was a record 691,347 oz silver, up 10% over the Third Quarter, 2008 and up 8% over Q4, 2007. The new all-time high silver production can largely be attributed to the successful rehabilitation and re-commissioning of the Guanajuato Mines project, which was acquired in May 2007 but only re-commenced commercial production in June, 2008 after completion of major mine rehabilitation and safety upgrade programs." More
- January 13, 2009 | Item | E-mail


Crowflight Implements Additional Metal and Foreign Exchange Price Protection - More
- January 13, 2009 | Item | E-mail


Robex - Opening of a private placement for up to $750 000 - More
- January 13, 2009 | Item | E-mail


Pershimco Resources Inc.: Second Closing of Private Placement - More
- January 13, 2009 | Item | E-mail


Blue Note Appoints New Chief Financial Officer - More
- January 13, 2009 | Item | E-mail


Lions Gate Metals Inc. Opens Beijing Office - More
- January 13, 2009 | Item | E-mail


Prior Drilling Results and New Surface Geochemical Sampling Confirm Bulk-Tonnage Mining Potential and Highlight Larger Prospective Area at Lydian's Amulsar - More
- January 13, 2009 | Item | E-mail


Arianne Resources Inc.: Appointment of Nadege Tollari - More
- January 13, 2009 | Item | E-mail


Latest Drilling at Gaoua Confirms Historical Data and Uncovers New Mineralization - More
- January 13, 2009 | Item | E-mail


Galahad Minerals Inc.: 11.9% Zinc at Steel River - More
- January 13, 2009 | Item | E-mail


Colorado Goldfields Launches "Shock and Awe" Strategic 2009 Offensive - More
- January 13, 2009 | Item | E-mail


Ecuador approves mining law, boosts government control - "Ecuador's Assembly late Monday approved a new mining law that bolsters government control over the nascent sector and slaps royalties on companies seeking to drill world-class metals' deposits in the Andean nation.

Even under tighter government oversight, the new law is expected to jump-start an industry that has found massive gold, copper and silver deposits coveted by global mining giants." More
- January 13, 2009 | Item | E-mail


Great Western Minerals Signs Option Agreement to Recommission Rare Earth Mine in South Africa - More
- January 13, 2009 | Item | E-mail


Bard Ventures Ltd.: Lone Pine Molybdenum 43-101 Resource Estimate Completed - More
- January 13, 2009 | Item | E-mail


Boxxer Continues To Expand Zone of Copper-gold Mineralization in Boss Mine and Potential of Boss Project - More
- January 13, 2009 | Item | E-mail


Western Goldfields Announces Additional Fuel Hedging for 2009 and 2010 - "The Company announced its original fuel hedging program on December 18, 2008 with Western Goldfields hedging 1,512,000 gallons per year in each of 2009 and 2010. With its most recent hedges, the Company secured prices for 1,386,000 and 1,512,000 gallons of diesel for 2009 and 2010 at forward prices of $1.68 and $1.87 per gallon, respectively. Combined with its previously announced hedging program, Western Goldfields has now hedged approximately 50% of its diesel requirement for each of the next two years at weighted average prices of approximately $1.75 and $1.94 in 2009 and 2010, respectively." More
- January 13, 2009 | Item | E-mail


Solitario Exploration & Royalty Reports Additional High-Grade Drilling Results on Its Bongará Zinc Project, Peru - "Solitario Exploration & Royalty Corp. (NYSE Alternext US: XPL; TSX: SLR) announced that it has received assay results for 19 out of 52 core drill holes completed in the last five months on its high-grade Bongará zinc-lead project in northern Peru. Highlights include spectacular results from drill hole V-44 that cut 9.3 meters grading 37.27% zinc, 2.24% lead and 70.7 grams per tonne ("gpt") silver and hole V-165 that intersected 19.0 meters grading 12.82% zinc, 0.81% lead and 29.4 gpt silver. The 52-hole, 15,000 meter program was managed and entirely funded by Solitario's joint venture partner Votorantim Metais." More
- January 13, 2009 | Item | E-mail


NovaGold Clarifies Reason for TSX De-listing Review - "NovaGold Resources Inc. (the "Company" or "NovaGold") (Toronto:NG.TO - News)(AMEX:NG - News) reminds its shareholders that, as previously disclosed in its press release dated January 2, 2009, the TSX de-listing review was triggered by NovaGold's reliance on the financial hardship exemption under Section 604(e) of the TSX Company Manual." More
- January 13, 2009 | Item | E-mail


Laramide Reports Final Results from 2008 Drilling at Westmoreland; Highlights Include Hole WDD08-112 with 5 Metres Grading 0.43% U(3)O(8) - More
- January 13, 2009 | Item | E-mail


Uracan Discovers Third Uranium Target in Quebec - More
- January 13, 2009 | Item | E-mail


Crosshair Maintains Labrador Claims - More
- January 13, 2009 | Item | E-mail


U3O8 Corp. Cuts 9.4 Metres at 0.132% (2.64 pounds per short ton) U3O8 at Aricheng South - More
- January 13, 2009 | Item | E-mail


Powertech Acquires Additional Land at Dewey-Burdock - More
- January 13, 2009 | Item | E-mail


Drilling Further Extends Mineralization at Exeter's Caspiche Gold-Copper Porphyry Project in Chile - "Exeter Resource Corporation (CDNX:XRC.V - News)(AMEX:XRA - News)(Frankfurt:EXB.F - News) ("Exeter" or the "Company") reports further lateral and depth extensions to the known gold-copper system at its Caspiche project in the Maricunga district, Chile. Drilling results include 372.0 meters (1,220.2 feet) at a grade of 0.85 grams per tonne gold (0.025 ounces per ton) and 0.47% copper, in drill hole CSD028. The deposit remains open to the south, northwest and at depth. " More
- January 13, 2009 | Item | E-mail


Minefinders Provides Fourth Quarter 2008 Dolores Production Update - "Minefinders Corporation Ltd. (Toronto:MFL.TO - News)(AMEX:MFN - News) announced today that metal production totaled approximately 3,093 ounces of gold and 57,378 ounces of silver in the fourth quarter of 2008. As previously reported, the first pour of gold and silver dore from the Company's flagship Dolores Mine in Chihuahua, Mexico took place in mid-November, 2008. Shipments to the refiner commenced in early December." More
- January 13, 2009 | Item | E-mail


International Tower Hill Continues to Expand Livengood Gold Deposit - "International Tower Hill Mines Ltd. ("ITH" or the "Company") (CDNX:ITH.V - News)(AMEX:THM - News)(Frankfurt:IW9.F - News) is pleased to announce drill results from the final 18 holes of its 2008 resource expansion program from its multi-million ounce Livengood gold deposit near Fairbanks, Alaska (Table 1). The results continue to highlight the very significant potential for the project - expanding it to the south with some of the best mineralized holes drilled to date. In addition, new gold recovery data continues to indicate that the mineralization is amenable to low-cost heap leach recovery." More
- January 13, 2009 | Item | E-mail


Apex Silver Mines files for bankruptcy protection - "Apex Silver Mines Ltd (SIL.A), which runs silver mining operations in Latin America, has sought bankruptcy protection from creditors with a New York court, with plans to sell its stake in a Bolivian mining operation.

The company filed a Chapter 11 petition with the U.S. bankruptcy court in Manhattan late Monday, and says it will receive $27.5 million plus other consideration for its stake in the San Cristbal Mine in Bolivia from Sumitomo Corp (8053.T)." More
- January 13, 2009 | Item | E-mail


 

- Chris Mullen, Gold Seeker Report

 

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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.


-- Posted 13 January, 2009 | |


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