-- Posted 20 January, 2009 | | Source: SilverSeek.com

The Metals:

Gold and silver traded mostly slightly lower over the Martin Luther King Holiday and dropped to as low as $823.37 and $10.90 in Asia this morning to see losses of 2.1% and 2.8%, but they then rallied back higher in London and New York and climbed to as high as $866.05 and $11.40 before ending with a gain of 1.57% for gold and a loss of 0.49% for silver.

Euro gold rose to about €661, platinum lost $2.50 to $936, and copper fell slightly to about $1.50.

Gold and silver equities rose over 5% by early afternoon, but they were then dragged down by general market weakness in the last few hours of trade and ended with slight losses.

The Economy:

There were no major economic reports today and there are none due out tomorrow, but many were talking about President Obama’s inauguration speech and his outlook for the country.

The Markets:

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

Oil reversed early losses and ended higher “on wintry weather in the northern hemisphere and on reports that OPEC was tightening supply.”

The U.S. dollar index rose as other world currencies fell on the view that their host countries are worse off than the US going forward.  The United Kingdom’s sterling was perhaps the weakest on concerns over the UK’s banking sector and the loonie also dropped markedly after the Bank of Canada cut their rate to just 1% and indicated they may need to cut rates further in the near future.

Treasuries fell on concerns over whether or not the market will be able to absorb the massive supply of debt coming out in the near future in order to attempt to resuscitate the economy.

The Dow, Nasdaq, and S&P fell over 4% on continued worries over problems in the banking sector.

Among the big names making news in the market today were State Street, the NY Times, J&J, General Mills, TD Ameritrade, and Fiat and Chrysler.

The Commentary:

“Gold is now coming more into its own now despite a strong $ this week.   The economic woes just seem to get worse.   With the stimulation now being given to economies of the world, prudence demand gold has a place in long-term portfolios.   This was seen in the growth of the gold Exchange Traded Funds.   Sales from Central banks are back to just a trickle and even COMEX is positioning for a higher price.   But first the base building must do more for the gold price could dip again.   But large investors are using such to "buy-the-dips".”- Julian D.W. Phillips, www.goldforecaster.com

“Dear Extended Family,

The Second Coming of Obama is a guarantee that there will be an impact of fiscal stimulation.

Expectations assist results of fiscal stimulation. The buying of cement and rebar will increase jobs and therefore impact economic statistics.

The banking system has healed the interests of the Fat Cats, but done nothing at all in terms of increasing the willingness of financial institutions to make loans.

The buying of cement and rebar will definitely impact business conditions and the statistics thereupon.

In terms of real accomplishments the predictable result of fiscal stimulation will be to transmit monetary potential inflation into real inflation.

A drop in the high level of confidence because of the main predictable result reflected by the numbers at today’s inaugural will cause a hyper-inflation that is a currency event based on the loss of confidence.

The up cycle in inflation therefore stands on a basis of loss of confidence in the new management of the new administration.

The risk of loss of confidence is heightened by the level of today’s expectations of a form of the Second Coming.

Gold is headed to $1250 on its way to $1650, after which Alf will be right. The short sellers in gold and shares thereupon should just sit tight so they can experience the loss of all time.”- Jim Sinclair, JSMineset.com

“Dear CIGAs,

Several noteworthy events occurred today which impacted gold trading in the US. First and most importantly were developments along the currency front. The British Pound was utterly mauled as news came out that the Royal Bank of Scotland had incurred the largest loss in British corporate history. If that was not bad enough, shares of Lloyds Banking Group fell by nearly 50% at one point in today’s trading as the market greeted the Bank of England’s rescue plan for the banks and the economy with a resounding THUD. The fear is that interest rates are falling to near zero and that the British economy is in horrific shape. Investors are also looking at the details of the rescue plan and are voicing concerns as to how this massive increase in debt is ever going to be repaid. Sound familiar?

News of continued downgrades in sovereign nation debt in and around the Eurozone sent the Euro into the toilet as it dropped to its lowest level since early December last year.

Now those of us who have been accustomed to watching the action of gold on a daily basis would have generally expected gold to drop alongside of the Euro especially as the Dollar went on another of its rip-roaring short squeezes amid panic buying. However, something happened related to this currency movement that caused a complete reversal of the norm. Gold in Sterling terms shot to a brand new all time high at the London PM Fix coming in at 612.307 while Gold priced in Euro terms came in at 661.383 coming in just shy of its all time high PM Fix of 663.352 made back in October of last year. Gold traders in New York looked over at that and decided that they needed to get out if they were short or get in if they were out! In other words, what looks to be a genuine flight to the safety of gold has begun in Europe. And why not? With US Treasuries paying next to nothing and several European nation government bonds being downgraded, where else can those who are fearful of what is occurring go with their life’s savings? If I were a bond holder and looked ahead at the plethora of new debt being issued, supply of such magnitude that the numbers send the mind reeling, I would seriously doubt that demand would be able to keep up with it.

What we are seeing is gold trading as a currency – something that has repeatedly been echoed at this site now for years especially in the face of repeated deflationist claims that gold would sink alongside of the rest of the commodity world. Keep this important fact in mind. Gold is a currency; it is only a commodity when there is general trust in paper money. Any fears or concerns about the stability or trustworthiness of any fiat currency will send money scurrying into gold. It is now evident that is occurring in Europe. It WILL OCCUR here in the US at some point in the not too distant future.

The second noteworthy item affecting gold was the price action in the expiring February crude oil contract. After dropping to a new yearly low, it rebounded sharply taking out the previous day’s highs as shorts began covering and bottom pickers began moving in. One day does not a trend make but I am keeping a very close eye on this market as crude oil, whether we like it or not, has become a sort of barometer for the rest of the commodity complex as a whole. Higher crude prices would only serve to bring in additional buying support into the gold market.

Technically gold blasted through two overhead resistance areas with seemingly little to no opposition. The first one at $840 was gone without gold breaking a sweat; the latter zone near $860 also was breached as buy stop momentum carried prices through it sending the shorts reeling before bullion bank selling came in and managed to suck up all the bids and drop it back below this level. The inability of gold to close strongly above the $860 level reinforces it as a significant barrier with $880 still lurking above that as the opposition to a move to the $1000 level.  Support lies now at $840 and then below that near the $820 level.”- Dan Norcini, More at JSMineset.com

“Today, the stocks of ALL the major banks are, putting it nicely, collapsing.  The money center banks have more than “liquidity issues”, they have major insolvency issues.  That is why Citibank and Bank of America, two of the largest, have been bailed out, as well as dozens of other small/mid-cap banks that don’t get as much press.   Take a look at major bank stocks like Wells Fargo (WFC), State Street (STT), and JP Morgan (JPM), not to mention Citi and B of A, companies which have already been “saved”.

And don’t forget about brokerages/investment banks such as Bear Stearns, Lehman, and Merrill which are already gone and several others that are on the brink, not to mention insurance companies like AIG, which is gone, and others like Hartford Life which are on the brink.

No matter what the talking heads say, the major banks are ALL insolvent, relying only on non-stop government funds and near fraudulent accounting regulations that allow them to value their assets at inflated values.  Keep in mind that the derivatives on Lehman’s balance sheet were auctioned off at $0.08 on the dollar, yet other banks are allowed to value their similar assets at much, much higher values.

The most troubling development, in my view, is in JP Morgan, which finally is starting to be called out despite the government and media efforts to paint them as stronger than the rest.  Their derivatives book DWARFS all the other banks COMBINED, and given that JPM is the government’s repository of crap (WaMu, Bear Stearns), its failure would likely give the government no choice but to let all the banks fail or, what I believe they will do, nationalize the whole banking industry.  And Britain will do the same; just look at some of their big banks today, such as Barclays (BCS) and Royal Bank of Scotland (RBS).

Which brings me to my next point, one I have harped on for some time which is very important to PM holders.

I have long noted that the gold and silver ETF’s GLD, SLV, and IAU have a very clouded accounting situation, rife with potential pitfalls.  They may turn out to be fine, but I and many others much smarter than myself have major worries about what lies behind those curtains.  This concept is not new, but what is new is the fact that these ETF’s are run by some of the aforementioned banks, GLD (the world’s largest gold ETF) by State Street and SLV and IAU by Barclays.  If these banks go under, or have their balance sheets ransacked by the U.S. and British governments, respectively, who knows if they will continue to serve their purpose as proxies for gold and silver prices? 

And as State Street is a U.S. company, I’m guessing that GLD is considered a U.S. company.  So there is always the risk that the government will somehow seize their assets in the name of “national security”. 

That is why I endorse 100% buying PHYSICAL gold and silver through mints like APMEX, the Northwest Territorial Mint, or even eBay first and foremost.  And if you want to own “paper gold and silver”, please try to do so through the closed-end funds (both Canadian companies) CEF and GTU.

What I have been talking about for some time is coming to pass.  Protect yourself, and as an aside please try to keep your home stocked with non-perishable foods in case a bank holiday is declared to sort through this mess.” – Andrew Hoffman

“April Gold closed up 15.2 at 856.8. This was 0.6 up from the low and 0.7 off the high.

March Silver finished down 0.04 at 11.175, 0.085 off the high and 0.005 up from the low.

The gold market was supposedly rising sharply off the idea that turmoil was mounting in the world banking system. Clearly the financial sector turmoil seemed to be primarily originating from the UK banking sector from over the weekend, but some traders were also concerned that further troubles were evolving in the US financial system behind the festivities in Washington. However, because the focus wasn't specifically trained on the US financial sector during the Tuesday trade that seemed to give the US Dollar the capacity to fully embrace a flight to quality focus of its own volition. Therefore the positive correlation between gold prices and the Dollar wasn't totally out of character, (as some might have suggested) but instead both gold and the Dollar seemed to be rising off the same type psychology. In fact, with the US equity market remaining under noted pressure during most of the trading session Tuesday, that in turn seemed to add yet another flight to quality angle to the equation.

While the silver market tried to rise in synch with the gold market in the morning action, it was clear that a resumption of selling pressure in the US equity markets (shortly after the official inauguration ceremony) provided a slight undertow to silver and a host of other physical commodity markets. With oil prices in the back months failing to maintain a mid day bounce and the Dollar clearly keeping a long list of physical commodity markets off balance, it wasn't surprising to see the silver market periodically diverge with the gold market in the second half of the trading session Tuesday.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

John Kemp: Either bankruptcy or inflation for U.S., Britain

Asian central banks will devalue competitively, analyst says

Michael Zielinski: Mint's new pricing policy raises premiums

Bond market waits for Treasury to start monetizing debt

Celebrate GATA's 10th anniversary Sunday in Vancouver

Gene Arensberg: Gold, silver ETFs see strong buying pressure

GATA's 10th anniversary -- gold manipulation evidence mounts

John Kemp: Reducing dollar's role may stabilize world finances

Nationalization of British banks advances

Ambrose Evans-Pritchard: Monetary union puts half of Europe in depression

James Turk: The Fed's blueprint for market intervention

U.S. Mint ties gold, platinum coin prices to London fix

Will U.S. be forced to nationalize banks?

The Statistics:

As of close of business: 1/16/2009

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from Friday’s data: The LSE added 0.89 tonnes, the ASX added 0.98 tonnes, and the JSE added 0.25 tonnes.

COMEX Gold Trust (IAU)

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

Silver Trust (SLV)

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

The Stocks:

Anglo’s (AAUK) hated nickel production, Kirkland’s (KGI.TO) drill results, MAG’s (MVG) drill results, Arian Silver’s (AGQ.V) change of address, First Majestic’s (FR.TO) updated NI 43-101 report, and Coeur’s (CDE) received cash proceeds 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:

Explorator Enters Into Agreement to Sell a 51% Interest in Its Chilean Subsidiary for US$17 Million - More
- January 20, 2009 | Item | E-mail

New Li Resource Estimate at Western Lithium's King's Valley Property Supports the Potential Development of Lithium Carbonate Production for Lithium Ion Batterie - More
- January 20, 2009 | Item | E-mail

Weststar Announces Private Placement - More
- January 20, 2009 | Item | E-mail

B2Gold Corp. Announces Positive Results from the Diamond Drill Program at the Mocoa Copper-Molybdenum Project, Colombia - More
- January 20, 2009 | Item | E-mail

Adanac Completes Initial Restructuring - More
- January 20, 2009 | Item | E-mail

Hard Creek Contracts Norilsk Process Technology Pty Ltd. - More
- January 20, 2009 | Item | E-mail

Ventana Options Strategic Land Package Contiguous With La Bodega Property - More
- January 20, 2009 | Item | E-mail

Peru community holds miners hostage for sixth day - "Four employees of Minera Afrodita and two people who were traveling with them in northern Peru were held hostage for the sixth day on Tuesday, taken by protesters upset over mining development, the company said." More
- January 20, 2009 | Item | E-mail

Adanac Molybdenum Corporation: Ruby Creek Project-Exploration Update - More
- January 20, 2009 | Item | E-mail

Yorbeau Drills High-Grade Intercepts at the Rouyn Property - More
- January 20, 2009 | Item | E-mail

Arian Silver Corporation: Change of Address & Registered Office - "Arian Silver Corporation (CDNX:AGQ.V - News)(AIM: AGQ)(PLUS: AGQ)(Frankfurt:I3A.F - News) announces that with immediate effect its head office and registered office address and contact details have changed to: Arian Silver Corporation
Carlyle House
235 - 237 Vauxhall Bridge Road
London SW1V 1EJ
Tel: +44 (0)20 7963 8670" More
- January 20, 2009 | Item | E-mail

Less Than 3% of Gold Reserve Shares Tendered into Rusoros Hostile Bid - "Gold Reserve Inc. (NYSE Alternext: GRZ) (TSX: GRZ - News) today responded to Rusoro Mining Ltd.’s (“Rusoro”) (TSX-V: RML - News) extension of its unsolicited offer of December 15, 2008 (the “Offer”) to acquire all of the outstanding shares and equity units of Gold Reserve in consideration for three shares of Rusoro for each Gold Reserve share tendered under the Offer." More
- January 20, 2009 | Item | E-mail

Temex intersects 86 g/t gold in 13 Vein Hallnor Property, Timmins Gold Camp - More
- January 20, 2009 | Item | E-mail

Update on Urex Energys Argentina Plateau Uranium Zone - More
- January 20, 2009 | Item | E-mail

Wits Gold announces drilling results from the De Bron project, southern Free State - More
- January 20, 2009 | Item | E-mail

Golden Band Resources Receives Positive Pre-Feasibility Study on La Ronge Gold Project - More
- January 20, 2009 | Item | E-mail

Terra Ventures Inc.: Hathor Commences Drilling at Its Midwest NorthEast Project - More
- January 20, 2009 | Item | E-mail

Red Metal Resources Ltd. Announces the Acquisition of Four Mineral Properties at Auction in III Region, Chile - More
- January 20, 2009 | Item | E-mail

North American Palladium Increases Indicated Resource by 280% at Offset Zone, Plans Aggressive 2009 Drill Program - More
- January 20, 2009 | Item | E-mail

TVI Pacific signs US$29.9 million Term Loan Facility - More
- January 20, 2009 | Item | E-mail

Premier adds third drill to Hardrock Gold Project - More
- January 20, 2009 | Item | E-mail

Polar Star Mining Corporation Ticker Symbol Change - More
- January 20, 2009 | Item | E-mail

Ventura Gold Defines New Discovery at the Angela Vein, Inmaculada Project, Peru, With Initial Inferred Resources of 483,000 Ounces Gold and 16.6 Million Oz. Ag - More
- January 20, 2009 | Item | E-mail

Brazauro Resources Corporation: Amendment to the Expiry Date and the Exercise Price of Warrants - More
- January 20, 2009 | Item | E-mail

Daleco Resources Corporation Updates Sierra Kaolin Open Pit Clay Mine Project - More
- January 20, 2009 | Item | E-mail

Anglo halts nickel mine, sees positive margins - "Anglo American Plc has temporarily halted production at its biggest nickel mine in Venezuela and said on Tuesday all its base metals mines have positive margins despite sliding prices.

Mining firms have been slashing production as weak metals prices make some operations uneconomical." More
- January 20, 2009 | Item | E-mail

Yorbeau Drills High-Grade Intercepts at the Rouyn Property - More
- January 20, 2009 | Item | E-mail

European Goldfields Limited: Stratoni Mine Production Up 26% in 2008 - More
- January 20, 2009 | Item | E-mail

MAG Silver Reports More High Grade Silver / Lead / Zinc Mineralization at Cinco de Mayo - "MAG Silver Corp. (Toronto:MAG.TO - News)(AMEX:MVG - News) ("MAG") is pleased to announce assay results from the ongoing drill program on its 100% owned Cinco de Mayo property in northern Chihuahua State, Mexico. Drilling is establishing the district-scale extent and zoning of silver, lead and zinc mineralization in the "Jose Manto". The drill program is also designed to search and test for the systems source." More
- January 20, 2009 | Item | E-mail

First Majestic Silver Corp.: San Martin Updated NI 43-101 Report Increasing Reserves/Resources by 45.81% - "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 an update regarding its activities in Mexico at the San Martin Silver Mine and a new NI 43-101 Reserve/Resource update." More
- January 20, 2009 | Item | E-mail

Coeur Receives $20.4 Million of Cash Proceeds - "Coeur d’Alene Mines Corporation (NYSE:CDE - News) (TSX:CDM - News) (ASX:CXC - News) announced today it has received proceeds of $20.4 million from the early exercise of a warrant relating to the Floating Rate Notes it issued in October of 2008." More
- January 20, 2009 | Item | E-mail

Fortis Declines Project Financing For Lamaque - More
- January 20, 2009 | Item | E-mail

Andina Granted Environmental Impact Declaration for Volcan Gold Project - More
- January 20, 2009 | Item | E-mail

Cigma Metals Corporation Announces the Results of the 2008 Drilling Program on the Beskauga Deposit, Dostyk Gold-Copper Project in Kazakhstan - More
- January 20, 2009 | Item | E-mail

Adanac Gains Extension to Creditor Protection - More
- January 20, 2009 | Item | E-mail

Full Metal Identifies New High Grade Silver-Lead-Zinc Mineralization at Nadaleen Project, Yukon Territory - More
- January 20, 2009 | Item | E-mail

Metalex, White Pine, Arctic Star intersect silver and zinc - More
- January 20, 2009 | Item | E-mail

Hawk Uranium Inc. Announces Extension to Term of Warrants - More
- January 20, 2009 | Item | E-mail

White Pine (WPR)-Metalex-Arctic Star Joint Venture Intersect 19.3m of 10% Zn and 41.5g/t Ag in Hole 5.01-16, 5.01 Project, James Bay Lowlands, Ontario - More
- January 20, 2009 | Item | E-mail

Wesdome announces appointment of Hemdat Sawh to its Board of Directors - More
- January 20, 2009 | Item | E-mail

Osisko Intersects 182 Metres Averaging 2.00 g/t Au at South Barnat - More
- January 20, 2009 | Item | E-mail

More Exceptional Results for Hana From Zone 5 at Ghanzi, Botswana - More
- January 20, 2009 | Item | E-mail

Tournigan Provides Update on Kuriskova Uranium Deposit in Slovakia - More
- January 20, 2009 | Item | E-mail

Kinbauri Intersects High Grade Gold at El Valle - More
- January 20, 2009 | Item | E-mail

European Goldfields Limited -- Stratoni Mine Production Up 26% in 2008 - More
- January 20, 2009 | Item | E-mail

Petaquilla Minerals Ltd. Provides Molejon Update - More
- January 20, 2009 | Item | E-mail

Kirkland Lake Gold Inc.: New South Central Zone Now Extends 450 Feet Up-Dip of 5300 Level - "Kirkland Lake Gold Inc. (Company) (TSX:KGI - News; AIM:KGI) is pleased to announce an update on exploration drilling testing part of the South Mine Complex (SMC). The SMC consists of 15 or more mineralized zones, one of which is the New South Central Zone." More
- January 20, 2009 | Item | E-mail

- Chris Mullen, Gold Seeker Report

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