-- Posted 22 January, 2009 | | Source: SilverSeek.com

The Metals:

Gold dropped down to $843.55 in early New York trade after having traded mostly slightly higher in Asia and London, but it quickly popped back higher in midmorning trade and climbed to as high as $862.75 before closing with a gain of 0.85%.  Silver made a low of $11.21 midday in London and climbed to as high as $11.505 by around 10:30AM EST in New York before it pared its gains in the last few hours of trade, but it still ended with a gain of 0.80%.

Euro gold rose to about €663, platinum gained $6 to $925, and copper fell nearly 4 cents to about $1.38.

Gold and silver equities flirted with gains at various times throughout the day today, but weakness in the major indices ultimately held the miners back and they ended with about 1% losses.

The Economy:

Housing Starts fell to a new record low while jobless claims climbed again to match a 26 year high.  There are no major economic reports due out tomorrow.

The Markets:

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

Oil fell 7% in early trade as inventories built much more than expected, but prices rebounded to end slightly higher on hopes that demand may finally start to rebound after another stimulus package.  Oil inventories built 6.1 million barrels, gasoline inventories built 6.5 million barrels, and distillates built 800,000 barrels.

The U.S. dollar index found slight gains as Treasury Secretary nominee Geithner parroted the line that "a strong dollar is in America's national interest."

Treasuries fell on continued supply absorption worries despite the fact that the Dow, Nasdaq, and S&P fell rather markedly at times on banking concerns and surprisingly disappointing results from Microsoft.

Among the big names making news in the market today were Bank of America, Microsoft, Sony, Nokia, Intel, CIT, SunTrust, Fifth Third, United Health, and Lockheed Martin.

The Commentary:

“Dear Extended Family,

A few important observations:

1. The Euro Zone financial and general business system has been bailed out at the rate of 6% of their 2007 GDP (2007 last reported).

2. The US financial and general business system has been bailed out at a rate of 5% of 2007 GDP (2007 last reported).

3. The US dollar has appreciated from the low of .72 to the high of .89 on the USDX.

4. That represents a 26.3% appreciation for the dollar versus the euro.

5. The difference between 5% and 6% can be argued as a 20% increase in percentage of GDP (not absolute bailout funds) higher in the Euro Zone.

6. Rate of interest returns in the Euro Zone are on average more than 100% higher than the US but that is not a factor because it does not serve the interest of the dollar longs. This keeps the media quiet.

Conclusion:

Algorithms and technical short term dollar flows are the very short term of the dollar rally.

Regards,”- Jim Sinclair, JSMineset.com

“Dear CIGAs,

The British Pound continues its horrid decline falling to a 23 year low against the US Dollar as events in Britain are rapidly spiraling out of control. The monetary authorities’ plan to rescue the banks there has been met with skepticism by investors while a genuine, and I might add, well-founded, fear of just who it is that is supposedly going to buy all this debt that the government is issuing which is blowing the fiscal budget deficit to kingdom come. We have a combination of a government spending itself into the drink while its stagnating economy produces fewer tax receipts. This point has not been lost on gold which once again today made yet another all time record high in terms of sterling.

One has to look at what is happening to the Pound with a great deal of sadness. Consider the once mighty British Pound, also called Sterling because it was at one time as good as silver, was the global reserve currency when Britannia ruled the seas. Its decline, which is completely due to its feckless political leaders who like ours here cannot seem to restrain spending their citizenry’s money and that of those not yet even born, is a frightening harbinger of what greets the US Dollar should we continue on our current course. From what I can see regarding the new Administration’s policies, coupled with a Congress completely taken over by those who are salivating at spending upwards of another $1 trillion, the US Dollar is doomed to follow the same course of Sterling. To say that it was inevitable is to allow those responsible to escape the blame. All of it was completely avoidable but it would have required statesmen who had the long term interests of the nation’s monetary future in mind rather than gutless politicians who lacked the courage to do what was right for the LONG TERM, even if it cost them their seats in the halls of power because of the hardship that it would inflict in the SHORT TERM.

“I will make mere lads their princes and capricious children will rule over them”. (Isaiah 3:4)

There is increasing chatter coming out of the Forex arena of intervention possibilities by both the Swiss monetary authorities and those of Japan. Both the Swissie and the Yen have been the beneficiaries of carry trade unwinding made possible because of ultra low interest rates in those respective nations. As hedge funds shed risk due to the deteriorating global economic news, these trades are being reversed or unwound with the result that players have been forced to buy Swiss Francs and Japanese Yen to repay the loans that were borrowed in terms of those currencies which were then used to purchase securities denominated in other currencies that paid a higher yield. It was a money making ATM machine while it lasted. The result has been to push both of these currencies strongly higher at the very same time that monetary authorities all around the globe are wanting to see their currencies weaken in an effort to maintain their export-related business. I am not sure how much damage the Swiss could inflict on the specs in regards to the Franc but I am under no illusions whatsoever when I say that the Bank of Japan is not to be trifled with should they decide to come from their lairs and punish the spec longs in the Yen. “Been there, done that,” is my motto and that has come from getting taken out to the woodshed by these guys once too often. So far, it is just rumors but only a fool would ignore it.

The Euro is struggling with those sovereign debt downgrades of Greece, Spain and now Portugal. That continues to feed the move to gold which is occurring in Europe as today the gold price in Euro terms hit a new all time record at the London PM Fix coming in at €663.376.

The Dollar is going to have its own issues to deal with as investors who were stuffing themselves full of US Treasuries recently are now disgorging them at an alarming rate. Today’s catalyst for the bond sell off was comments by the Obama Administration’s Treasury Secretary designee, Timothy Geithner, who accused the Chinese of manipulating their currency. Note to Geithner – you do not accuse your biggest creditor of doing the things that your own government has been doing and expect them to continue using their savings to buy your too-numerous-to-number debt issuances.

IF you have not taken a look at the long bond chart, do yourself a favor and see what happens when supply overwhelms demand. Bonds have now broken down below their 50 day moving average and appear headed down to the 100 day unless they can reverse course very quickly. The weekly chart shows a solid topping formation in place with the next level of support near 125^12. The bonds have been very tricky to call because anyone with a lick of sense knows that they were in a bubble but gauging when exactly a bubble has popped is sometimes a bit more difficult than it would seem mainly because it is easy to underestimate the effect produced by fear on a market. Markets are anything but rational – do not ever forget that.

I should also point out that the Gold/Bond ratio, a measure of investor’s preference for a safe haven choice, has been decidedly in favor of gold over the last couple of weeks. I will attempt to get an updated chart up later today for your reference. No doubt serious-minded investors are looking at the Treasury International Capital Flows data as well as the coming US government spending orgy alongside of these Euro zone debt downgrades and are saying to themselves, “the Hell with paper”.

Meanwhile, Russia appears to be burning through its share of reserves with the speed of a wildfire as they attempt to put a floor beneath the disappearing ruble. I will get a Gold in ruble terms chart up today later on – it too is amazing.

This brings me to another point – I see one way only for those nations which are cranking up the printing presses to warp speed to avoid complete and utter insolvency – they will have to devalue their currencies against gold and inflate the debt away. I am not a statistician or a mathematician, but I cannot wrap my mind around the amount of debt being created by so many nations and envision any other scenario in which any of it has a snowball’s chance in hell of ever getting repaid. Either that or the current monetary system collapses and a new Bretton Woods type accord replaces it. When we talk about a soaring gold price we are in effect talking about the devaluation of paper currencies – it is one and the same thing for all practical purposes.

All of this is serving to put a strong floor of support beneath the gold market which’s resiliency is beginning to resemble that of a cork’s. It keeps bobbing up to the surface after getting pushed down by bullion bank selling at the Comex.

The wedge formation which is revealed on the daily gold chart that begins with the July 2008 high and the mid-October 2008 low appears to be attempting to resolve itself in favor of the upside with the top of that line coming in near the $880 region. That level is taking on more and more significance as a technical barrier and should gold be able to punch through the selling that the bullion banks are throwing into its path here near the $860 level, they will be pushed back to that line as a defense. If they can be pushed off of that hill, gold will have broken out in US Dollar terms into a trending move. Expect a battle at that level therefore by the gold haters. Momentum indicators on the daily gold chart are all positive with the price above all of the major moving averages. The only bit of a fly in the ointment is that the 10 day moving average remains below the 20 day but it has turned higher which is a plus. The last reaction in gold a few trading sessions ago took it down into the confluence of the 50 day and 100 day moving average from which is sharply bounced, a very strong technical signal.” - Dan Norcini, More at JSMineset.com

“April Gold closed up 8.8 at 860.5. This was 4 up from the low and 0.2 off the high.

March Silver finished up 0.04 at 11.365, 0.025 off the high and 0.015 up from the low.

The gold market initially tried to extend the early morning pulse up in prices but as usual the scheduled US numbers had a temporary negative influence on gold prices. However, despite the pre report setback the gold market mostly managed to maintain a positive trade and that wasn't surprising considering that the global banking crisis seems to remain a front and center issue throughout the trading session. Perhaps the trader spun the Peru production news into a positive by focusing on the decline in December production from that country over the news of a slight overall increase in annual gold production. In the end seeing sharp declines in both US equity prices and US Treasuries would seem to suggest that flight to quality concerns were indeed finding their way into the gold market.

Like the gold market, the silver market came off the weakness seen into the release of the US data and from the low forged right around the report release.  The March contract at one time was as much as 20 cents above the early lows. Surprisingly the silver market was mostly unnerved by the weakness in the copper market but given the ultra weak US numbers and the magnitude of the slide in US equity prices, one would have to think that silver was somewhat held down by its industrial commodity market roots.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Peter Brimelow: Gold bounces back as manipulation plan is exposed

Iain Martin: Brown brings Britain to edge of bankruptcy

Kinross easily tops up war chest for acquisitions

Peter Degraaf: Does manipulation render technical analysis obsolete?

Michael Zielinski: U.S. Mint discouraging gold ownership

Dominic Frisby: Gold is shifting from West to East

The Statistics:

As of close of business: 1/22/2009

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 added 0.52 tonnes.

COMEX Gold Trust (IAU)

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

Silver Trust (SLV)

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

The Stocks:

Claude’s (CGR) drill program, NovaGold’s (NG) closed financing, Great Basin’s (GBG) permit, Richmont’s (RIC) gold sales, New Gold’s (NGD) production, Eldorado’s (EGO) update and guidance, Endeavour’s (EXK) private placement, and Bear Creek’s (BCM.V) drill results 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:

Royal Roads announces that creditors of ScoZinc intend to challenge security granted to Royal Roads - More
- January 22, 2009 | Item | E-mail

Crowflight Intersects 9.56 Metres of 7.87% Nickel; Commences Phase 2 Delineation Program at Bucko - More
- January 22, 2009 | Item | E-mail

Yankee Hat Closes First Tranche of Financing - More
- January 22, 2009 | Item | E-mail

Eagle Hill Closes Brokered Private Placement - More
- January 22, 2009 | Item | E-mail

VMS Ventures Inc.: 2 km Long Horizon to Be Explored With Deep EM Geophysical Survey Southwest of Reed Lake Discovery Zone, Snow Lake, Manitoba - More
- January 22, 2009 | Item | E-mail

Millrock Announces Positive Drilling and Sampling Results at Bluff Project, Alaska - More
- January 22, 2009 | Item | E-mail

Nayarit Gold Intersects 11.95 Metres of 12.4 g/t Gold Equivalent, or 742 g/t Silver Equivalent, or 3.67 g/t Gold and 522.3 g/t Silver - More
- January 22, 2009 | Item | E-mail

Khan Resources Announces Annual and Special Meeting and Corporate Update - More
- January 22, 2009 | Item | E-mail

Alpha Gold provides corporate update - More
- January 22, 2009 | Item | E-mail

Claude Resources Announces 22,000 meter Underground Drill Program at Madsen, Red Lake - "Claude Resources Inc. (TSX-CRJ; AMEX-CGR) will continue its underground drill program, targeted at the historic high grade 8 Zone, and concurrently execute its surface exploration program at the Company's Madsen property located at Red Lake, Ontario." More
- January 22, 2009 | Item | E-mail

Kodiak Intersects 5.4 Metres Grading 20.03 gpt (0.58 opt) Gold, 2009 Drill Program Commenced - More
- January 22, 2009 | Item | E-mail

Lac Dore North Assay Results - More
- January 22, 2009 | Item | E-mail

Adventure Gold Identifies a Significant Gold Structure on Senore - More
- January 22, 2009 | Item | E-mail

Minera IRL Limited-2008 and Q4 Production Results - More
- January 22, 2009 | Item | E-mail

Abitex and Azimut discover uranium mineralization grading up to 0.65% U3O8 at Central Minto, Nunavik, Quebec - More
- January 22, 2009 | Item | E-mail

Purepoint Uranium Group Inc: Stakes near Midwest and Roughrider - More
- January 22, 2009 | Item | E-mail

Kinbauri Gold Corp.: El Valle Resources Increased by Additional 153,519 oz. Gold - More
- January 22, 2009 | Item | E-mail

Eagle Plains/Blind Creek Release Results From 2008 Drilling Program at Blende Silver/Base-Metal Project, Yukon Territory - More
- January 22, 2009 | Item | E-mail

Sonami sees '09 Chile copper output at 5.53 mln t - More
- January 22, 2009 | Item | E-mail

Review of Carpathian's 2008 Exploration and Corporate Activity - More
- January 22, 2009 | Item | E-mail

Canadian Royalties/Nunavik Nickel Project Puimajuq Update: Drilling Intersects High-Grade Nickel, Copper and PGE Mineralization - More
- January 22, 2009 | Item | E-mail

La Mancha's 2008 Year End Production Increases 33% to 71,550 Ounces - More
- January 22, 2009 | Item | E-mail

Farallon Provides Operational Update on the G-9 Mine - More
- January 22, 2009 | Item | E-mail

Cypress & Skyharbour Launch 2009 Exploration Program for Broulan Reef Project, Bruce Channel / Red Lake NW, Ontario - More
- January 22, 2009 | Item | E-mail

Bear Lake Gold Adds a Third Drill Rig at Larder Lake - More
- January 22, 2009 | Item | E-mail

Chariot Resources Limited Announces Stock Option Grants - More
- January 22, 2009 | Item | E-mail

Azimut and Abitex discover uranium mineralization grading up to 0.65% U3O8 at Central Minto, Nunavik, Quebec - More
- January 22, 2009 | Item | E-mail

Gold Canyon Signs Joint Exploration Agreement With Japan Oil, Gas and Metals National Corporation (JOGMEC) - More
- January 22, 2009 | Item | E-mail

U3O8 Corp. Announces Initial Uranium Resource Estimate for the Aricheng North and Aricheng South Structures in the Kurupung Batholith, Guyana - More
- January 22, 2009 | Item | E-mail

New Drill Program on Midland Exporation's Maritime Cadillac Property - More
- January 22, 2009 | Item | E-mail

Andina Announces Board of Directors Change - More
- January 22, 2009 | Item | E-mail

Endeavour Silver Arranges CA$8 Million Private Placement of Subordinated Unsecured Convertible Redeemable Debentures - "Endeavour Silver Corp. (Toronto:EDR.TO - News)(AMEX:EXK - News)(DBFrankfurt: EJD) ("Endeavour" or the "Company") hereby provides notice of the proposed private placement of its CA$8 million 10% Subordinated Unsecured Convertible Redeemable Debentures due 2014." More
- January 22, 2009 | Item | E-mail

Alexis' New Gold Mine Exceeds 2008 Production Target and Remains Within Budget - More
- January 22, 2009 | Item | E-mail

2.72 oz Au/t, 31.4 oz Ag/t @ GALAHAD's New Kellyn Gold Prospect, Terrace Bay Area, Ontario - More
- January 22, 2009 | Item | E-mail

Mustang Provides Update on Maskwa Nickel Project Feasibility Study - More
- January 22, 2009 | Item | E-mail

Merrex Resignation of Directors - More
- January 22, 2009 | Item | E-mail

PC Gold Cuts Three Separate Gold Zones in Hole PC-08-020 Returning 3.90 m of 17.39 g/t Gold, 13.50 m of 4.03 g/t Gold, and 5.30 m of 4.99 g/t Gold - More
- January 22, 2009 | Item | E-mail

Northern Superior Resources Inc. and Matamec Exploration Inc. Sign Wachigabau Option and Joint Venture Agreement, Quebec - More
- January 22, 2009 | Item | E-mail

Frontera Copper Announces a Reduction in Its Estimate of Recoverable Copper Contained in Leach Pad Inventories and a Writedown of Current Inventory - More
- January 22, 2009 | Item | E-mail

AuEx Ventures, Inc.: West Pequop Returns 141 Feet at 0.238 Ounces Gold Per Ton - More
- January 22, 2009 | Item | E-mail

Fusion enters into deed of release with Cazaly to satisfy condition of Paladin takeover - More
- January 22, 2009 | Item | E-mail

Lundin Mining Corporation: Galmoy Mine to Close in May 2009 - More
- January 22, 2009 | Item | E-mail

Bear Creek announces step-out drilling at Santa Ana - Encounters higher-grade silver - Mineralization remains open - "Bear Creek Mining (TSX Venture: BCM - News; "Bear Creek" or the "Company") is pleased to announce results for 27 additional diamond drill holes (4,962.1 meters). Drilling at Santa Ana now totals 55,574.1 meters in 306 drill holes. Santa Ana is located 200 kilometers south of the Company's world-class Corani silver-base metal deposit in southeastern Peru." More
- January 22, 2009 | Item | E-mail

NovaGold Closes US$69 Million of US$75 Million Financing - "NovaGold Resources Inc. (the "Company" or "NovaGold") (Toronto:NG.TO - News)(AMEX:NG - News) announced today that it has closed its US$60 million private placement with Electrum Strategic Resources LLC ("Electrum") as previously announced on January 2, 2009. A total of 46,153,847 Units were sold to Electrum at a price of US$1.30 per Unit for gross proceeds of US$60 million. Each Unit consists of one common share of NovaGold and one common share purchase warrant of NovaGold ("Warrant")." More
- January 22, 2009 | Item | E-mail

NDEP Issues Water Pollution Control Permit for GBG's Hollister Project - "Great Basin Gold Ltd, ("Great Basin" or the "Company"), (TSX: GBG; NYSE Alternext: GBG; JSE: GBG) announces that the Nevada Division of Environmental Protection/Bureau of Mining Regulation and Reclamation (NDEP) recently issued one of the key permits needed for a full-scale underground mining operation by its wholly owned subsidiary, Rodeo Creek Gold Inc. (RCG), at the Hollister Development Block Project in Elko County, Nevada. The NDEP Water Pollution Control Permit (WPCP) authorizes a maximum production rate of up to 275,000 tons of ore per year as well as engineered waste rock storage and ore stockpile facility, synthetic lined water management ponds, a reverse osmosis water treatment facility, and other ancillary facilities." More
- January 22, 2009 | Item | E-mail

Richmont Mines Reports Gold Sales More Than Double in 2008 Fourth Quarter - "Richmont Mines Inc. (Toronto:RIC.TO - News)(AMEX:RIC - News) a gold exploration, development and production company with operations in Canada, today announced preliminary gold production and sales for the fourth quarter and full year 2008. Complete production data and financial results will be available on February 26, 2009. During the fourth quarter of 2008, Richmont sold 22,116 ounces of gold, more than double the 10,949 ounces of gold sold in the fourth quarter of 2007." More
- January 22, 2009 | Item | E-mail

New Gold Exceeds 2008 Production Guidance and Provides 2009 Forecast - "New Gold Inc. ("New Gold") (TSX and AMEX - NGD) today announces fourth quarter gold production of 78,950 ounces and 2008 cumulative annual gold production of 272,046 ounces, exceeding previously released guidance by 22,046 ounces. New Gold also provides its 2009 operational forecast." More
- January 22, 2009 | Item | E-mail

Eldorado Gold Corporation: 2008 Year End Update and 2009 Guidance - "Paul N. Wright, President & Chief Executive Officer of Eldorado Gold Corporation (Toronto:ELD.TO - News)(AMEX:EGO - News) ("Eldorado", the "Company", or "we") is pleased to provide the following update on the Company's 2008 operating results and anticipated 2009 production." More
- January 22, 2009 | Item | E-mail

- Chris Mullen, Gold Seeker Report

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