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Gold Seeker Closing Report: Gold and Silver Gain Over 1% While Stocks Fall Back Off

By: Chris Mullen, Gold-Seeker.com


-- Posted 29 January, 2009 | | Source: SilverSeek.com

 

Close

Gain/Loss

Gold

$904.10

+$15.30

Silver

$12.15

+$0.155

XAU

125.49

+4.12%

HUI

301.85

+4.61%

GDM

945.01

+4.95%

JSE Gold

2531.01

+122.51

USD

85.34

+0.74

Euro

129.59

-2.18

Yen

111.20

+0.42

Oil

$41.44

-$0.72

10-Year

2.815%

+0.159

T-Bond

127.140325

-1.78125

Dow

8149.01

-2.70%

Nasdaq

1507.84

-3.24%

S&P

845.14

-3.31%

 
 

 

The Metals:

 

Gold dropped as much as $14.80 to $874.00 by midday in London, but it then stormed back higher for most of the rest of trade and ended near its high of $905.65 with a gain of 1.72%.  Silver fell $0.355 to $11.64 before it also rallied back higher in New York and ended near its high of $12.265 with a gain of 1.29%.  Both metals have also continued to rally higher in after hours access trade.

 

Euro gold rose to about €697, platinum gained $15.50 to $965.50, and copper fell a few cents to $1.45.

 

Gold and silver equities fell over 2% at the open and then rose to find roughly 5% gains by late afternoon before they fell back off a bit into the close, but they still ended with over 4% gains.

 

The Economy:

 

Report

For

Reading

Expected

Previous

Durable Orders

Dec

-2.6%

-2.0%

-3.7%

Durable Orders, Ex-Tran

Dec

-3.6%

-2.7%

-1.7%

Initial Claims

1/24

588K

575K

585K

New Home Sales

Dec

331K

397K

388K

 

The stimulus plan passed the House last night as expected and now moves on to the Senate where it could face a larger struggle.

 

Tomorrow at 8:30AM EST bring fourth quarter GDP expected at a dismal -5.4% with some expectations calling for as much as -7%.  The Chain Deflator is expected at 0.6%.  Chicago PMI for January is expected at 34.0 at 9:45, Michigan Sentiment for January is expected at 61.9 at 9:55, and the fourth quarter Employment Cost Index is expected at 0.7% at 10AM.

 

The Markets:

 

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

 

Oil fell on worries over weak demand while the U.S. dollar index rose as the euro fell on the view that Europe is worse off than the US.

 

Treasuries fell despite their historic safe haven status as traders fear the market will not be able to absorb the massive amount of supply due to come on the market to fund stimulus plans and other measures aimed at helping the economy.

 

The Dow, Nasdaq, and S&P fell markedly as economic data came in notably worse than already horrible expectations and reinforced worries over a severe economic downturn. Some serious doubts were also raised over the potential success of the “bad bank” plan.

 

Among the big names making news in the market today were Allstate, Royal Caribbean, Eli Lilly, Continental Airlines, Ford, 3M, Altria, US Airways, Sony, Kodak, Wells Fargo, the New York Times, and Delta.

 

The Commentary:

 

“Gold is shrugging off the moves in the U.S. $ which has become volatile and jumping both up and down.  When it was rising gold jumped $50, then consolidated as the $ fell.  Now the $ is rising again the gold price is rising too.  

 

The technical picture of gold is very favorable and the rise we have seen today is gold being vigorous in consolidation pointing to an investment against uncertainty and a disturbed financial system on many fronts.  

 

The long-term investment demand through the gold Exchange Traded Funds is extraordinarily high and likely to rise still further as these funds prove their liquidity can accommodate bigger volumes.

 

What's more is that the demand is coming from institutional fund managers of all sides of the investment spectrum.”- Julian D.W. Phillips, www.goldforecaster.com

 

Dear CIGAs,

 

It looks like someone forgot to tell the US equity markets that they were supposed to be “stimulated” by passage of the $825 billion and rising “stimulus” plan approved by the Dems in Congress last evening. Then again perhaps investors looked at the plan and were not “stimulated” by its details since all those digital TV’s that it gives away money for are not made in the US but overseas. I did want to let the readers know that I sent in an invoice to the feds in the amount of $25,000 requesting a direct payment to me personally so that I could purchase a really nifty 4 wheeler that comes with a built in cooler for hauling cold drinks on those outings in the great outdoors. I will let you know when I get the check so that you can also apply. I am not worried about the cost because when I am gone from this planet I will be leaving it to my kids since they, along with their grandkids, will end up being the ones that are paying for this anyway.

 

By the way, some one has calculated that the size of the package means that the feds could send every man, woman and child a check for $2,700 or $22,000 for every person living below the poverty level in the nation. No doubt that could be increased a bit if they eliminated the $50 million that the bill throws to the National Endowment of Arts and $ one billion for Amtrak, which has not shown a profit in 40 years!

 

Even the bond market has finally figured this one out – as lousy as the economic data gets (did you see that new home sales hit a 14 year low according to today’s data release) the bonds still cannot muster much of an upward move. Traders there are slowly coming to realize that bonds are not such a “safe haven” when the feds are multiplying them faster than ACORN can register non-existent or dead voters. Bond traders rightly fear a tidal wave of supply that is going to overwhelm whatever demand still exists for them.

 

The bond chart has turned absolutely horrendous with today’s sell off breaching a short term support level which had emerged near the 128 ^15 level. There looks to be nothing in the way of technical chart support until down near the 100 day moving average at 125 ^08. About the only thing that the bond bulls have going for them is the extremely oversold level but that is not a lot to hang your hat on once sentiment shifts, especially in a market that had blown up into a bubble of cosmic proportions. Tomorrow’s weekly and monthly close in the bonds will be significant.

 

All of this contributed to gold’s rise from support – if bonds are no longer safe havens then where can one go with their wealth to protect it from the depredations being inflicted upon it by Central Bankers and ignorant politicians. Answer - Gold.  Pause here as the camera pans in closer to zoom in on the bullions coins I am holding in my hand and then pans back out so that you can see the 800 telephone number to phone so that you can purchase some gold and pay for the cost of the advertisement.

 

Seriously, sometimes I get the feeling that we sound like a TV advertisement for gold but when you look at what is transpiring in the world around us and see the folly that passes for statesmanship among our leaders, you get the idea that you are watching a train wreck in slow motion. The monetary authorities and the politicians set the stage for this mess, greed on Wall Street took over and now the monetary authorities and the politicians are somehow supposed to fix it all. It reminds me of the story of the clumsy janitor cleaning a store full of fine crystal – he knocks over some of the crystal and attempts to sweep it up but in the process the handle of his broomstick knocks more crystal off of shelves that are behind him. As he turns to deal with that mess, once again the broomstick takes down more crystal to the point where he has managed to ruin nearly everything in the entire store. It would have been better off if he had never even attempted to clean the store in the first place.

 

Technically the price action in gold is most encouraging. After stalling out at $920 due to bullion bank price capping, gold probed lower looking for buying support and found it almost exactly on the topside of the Downsloping trendline from which it broke above last week. This is classic, and I do mean “classic”, bullish price action from a technical perspective – a triangular consolidation formation in which the market is coiling tighter and tighter and then breaks out, sees a retest of the breakout point and then rebounds in the direction of the initial breakout.” - Dan Norcini, More at JSMineset.com

 

“All,

 

About a week or two ago, I forwarded an article suggesting the Chinese were starting to unload their massive ($1 trillion-plus) holdings of U.S. Treasury bonds, given the risks involved in the U.S. markets.  This follows an article last month noting that the Chinese are suggesting equally massive increases in their gold holdings. 

 

The Chinese have massively increased their U.S. Treasury holdings during the financial crisis this fall (which is far from over, by the way), likely because they were simply moving funds from all the Freddie Mac and Fannie Mae bonds they were selling when those two vile companies went under.

 

They and the entire financial world have always viewed U.S. Treasury bonds as the ultimate safe haven, which it has been due to a roughly 30-year bull market in bonds.  Even over the past few months when MASSIVE red flags have showed up, such as exponential increases in U.S. debt and money-creation, still Treasuries kept rising.  Of course, in hindsight we see that the Chinese were a big part of this, but scores of clueless money managers continued to chant the brainwashed mantra about U.S. Treasury bonds being a safe haven.  It doesn’t hurt when this market was supported by recent U.S. government promises to buy Treasuries with freshly printed money (insane, right?), or that every media outlet under the sun cited the mantra as well.

 

But now that is changing, and changing big.  Despite all the market manipulation, and jawboning, and brainwashing, we are now, for the first time in my 20 years watching the market, seeing Treasury Bonds go DOWN with the stock market, while gold and silver are starting to really take off.  Even in a “down year” last year, gold was still up roughly 5%, and given this seismic change in capital flows, my guess is that the “bad guys” trying to keep you out of gold and in U.S. Treasury bonds are starting to get beat, and beat badly.

 

Not only are the aforementioned bearish factors SCREAMING to sell U.S. Treasury bonds, and not only are the Chinese now a potential seller (and don’t think others won’t piggy back on them), but the 30-year bull market in bonds in general is now decisively OVER.  It started with Corporate and Mortgage bonds, and now Treasury bonds are rolling over as well.  Not to say that they can’t fight back, but the trend is now down, and as I said before this is probably the first time in our lifetimes that bonds are NOT rising in response to falling stock markets.

 

The reason I pen these missives is to help you protect yourselves.  NOTHING positive has happened in the economy AT ALL in recent months, and don’t be fooled by stimulus packages, 200-point up days in the Dow (that was yesterday, now we’re down 200 today).  Yes, markets can do all kinds of things, but the economic trend is down, and the process of hyperinflating ALL paper currencies is becoming exponential.

 

The below article further describes the trend I am talking about, in other words the trend toward GOLD (and silver) as the real safe havens, against everything from “deflation” to “inflation” to hyperinflation.  It, too, suggests that gold is where the Chinese are moving to.

 

http://www.gata.org/node/7134

 

Protect yourself!” – Andy Hoffman

 

“April Gold closed up 16.5 at 906.5. This was 26 up from the low and 1 off the high.

 

March Silver finished up 0.182 at 12.145, 0.025 off the high and 0.325 up from the low.

 

The gold market managed to reject a moderately aggressive initial pulse down move and quickly returned to the vicinity of the January highs. Moderate weakness in the US equity market and at times noted weakness in the US Treasury market on Thursday seemed to highlight renewed flight to quality buying interest in gold. In fact, buying interest in the Dollar and Yen also seemed to indicate a return to uncertainty again and that also favored the gold bulls. As suggested in the mid day coverage, bullish gold dialogue flowing from the Davos economic forum seemed to provide the gold market with a lift, but it should be noted that the bullish dialogue from the Davos conference was predicated on a weakening of the US Dollar.

 

Like the gold market, the silver market managed to throw off noted early weakness and recover quite impressively. Clearly the silver market was following in the footsteps of the gold market and that in turn helped the silver market discount the potential drag from the weakness in the stock market and what appeared to be a slight deterioration of the US macro economic outlook.”- The Hightower Report, Futures Analysis and Forecasting

 

GATA Posts:

 

 

Barrick chairman speculates China will dump dollars for gold

Peter Brimelow: Is gold really pausing?

Gold gaining investors as U.S. prints trillions

Another way to pretend that you're investing in gold

Russian Prime Minister Putin urges end to dollar's stranglehold

 

The Statistics:

As of close of business: 1/29/2009

Gold Warehouse Stocks:

8,556,795

-903

Silver Warehouse Stocks:

123,952,877

+316,675

 

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

832.88

26,777,938

US$ 23,966m

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

Gold Bullion Securities

127.11

4,086,747

US$ 3,711m

Australian Stock Exchange (ASX)

Gold Bullion Securities

12.49

400,602

US$ 365m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

27.90

896,976

US$ 803m

 Note: Change in Total Tonnes from yesterday’s data: The LSE added 4.48 tonnes.

 

COMEX Gold Trust (IAU)

Profile as of 1/28/2009

 

Total Net Assets

$1,962,206,848

Ounces of Gold
in Trust

2,210,089.571

Shares Outstanding

22,450,000

Tonnes of Gold
in Trust

68.74

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

 

Silver Trust (SLV)

Profile as of 1/28/2009

 

Total Net Assets

$2,869,734,474

Ounces of Silver
in Trust

239,624,279.800

Shares Outstanding

242,850,000

Tonnes of Silver
in Trust

7,453.15

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

 

The Stocks:

 

SEMAFO’s (SMF.TO) gold production, Barrick’s (ABX) comments on the gold price and shut down mine, Tanzanian Royalty’s (TRE) royalty agreement, Great Basin’s (GBG) exploration drilling, IAMGOLD’s (IAG) gold production, International Minerals’ (IMZ.TO) addendum to is preliminary feasibility study, Gold Fields’ (GFI) production, Solitario’s (XPL) drill results, and MAG’s (MVG) exploration programs were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1.  US Gold

UXG+18.71% $1.84

2.  NovaGold

NG +17.75% $3.45

3.  Vista Gold

VGZ+16.67% $2.31

 

LOSERS

1.  Anglo American

AAUK -6.04% $9.49

2.  Freeport

FCX -4.95% $26.68

3.  International Royalty

ROY -4.24% $1.58

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:

Calibre Files to Deregister From the SEC in the USA - More
- January 29, 2009 | Item | E-mail


VMS Ventures Joins the "AGORACOM 100" and Launches Online IR and Marketing Program - More
- January 29, 2009 | Item | E-mail


SEMAFO to Produce Up to 240,000 Ounces of Gold in 2009 - "SEMAFO is looking forward to another strong year in 2009," said Benoit La Salle, SEMAFO's President and CEO, "We intend to build upon our 2008 achievements, where we delivered record production and completed the smooth, successful start-up of our new Mana mine. In 2008, our goal was to increase gold production by 60% through steady quarterly growth. Not only did we deliver on this promise, but we surpassed our objective, achieving an increase of 84% over our 2007 production." More
- January 29, 2009 | Item | E-mail


Robex Resources Increases its Private Placement from $750,000 to $1,000,000 - More
- January 29, 2009 | Item | E-mail


Coronado Shipping High Grade Gold - More
- January 29, 2009 | Item | E-mail


Gold likely to hit new highs on dlr fear-Barrick - "Gold is likely to hit new record highs, spurred by serious concern about the U.S. currency and doubt about the state of the world economy, the chairman of Barrick Gold Corp (ABX.TO). said on Thursday.

There was even a possibility, although not a probability, central banks, including China's, might start to switch from dollar holdings to gold, which could cause the metal's price to treble or more." More
- January 29, 2009 | Item | E-mail


Barrick Gold shuts Papua New Guinea mine - "Barrick Gold Corp (ABX.TO) is suspending output at its small Kainantu gold mine in Papua New Guinea due to high costs, but will continued to hunt for more resources at the site, a company official said on Thursday.

Barrick bought Kainantu in 2007 from Highlands Pacific Ltd for $141.5 million with the intention of exploring in the area around the operation." More
- January 29, 2009 | Item | E-mail


Tanzanian Royalty Concludes Definitive Agreement for Mwadui Diamond Project With Kazakh-Funded Company - "Tanzanian Royalty (Toronto:TNX.TO - News) (AMEX:TRE - News) is pleased to announce the signing of a Royalty Agreement with Kazakh Africa Mining Ltd. for its 21 Mwadui Project Area diamond licenses in the Lake Victoria Greenstone Belt of Tanzania." More
- January 29, 2009 | Item | E-mail


Beaufield: Hemlo Gold Property Surveyed - More
- January 29, 2009 | Item | E-mail


Dorato Reports Completion of 2008 Exploration Program, Cordillera del Condor Gold-Copper Property, Northwest Peru - More
- January 29, 2009 | Item | E-mail


Harte Clarifies Affairs - More
- January 29, 2009 | Item | E-mail


Golden Hope Announces up to 9.3g/t Assay Results; Receives Positive Identification of Other Timmins-Type Targets - More
- January 29, 2009 | Item | E-mail


Gaoua Copper-Gold Project no Longer Subject to Freeport Earn-in - More
- January 29, 2009 | Item | E-mail


Colorado Goldfields Inc. CEO Reports: "Black to the Future" -- 1990 Engineering Report Fast Forward to 2008 Exploration Drilling Program Results - More
- January 29, 2009 | Item | E-mail


Strathmore Updates Roca Honda, New Mexico, Uranium Development Project - More
- January 29, 2009 | Item | E-mail


Urex Energy Provides Update on Cerro Solo South Uranium Zone in Argentina - More
- January 29, 2009 | Item | E-mail


Great Basin Reports Continued Exploration Success at Hollister Property - "Exploration and evaluation diamond drilling has continued at the Hollister Property. During the fourth quarter of 2008, underground evaluation and exploration drilling for other mineralized structures totaled 13,455 feet (4,101 metres) and surface diamond drilling totaled 16,084 feet (4,902 metres). The programs continue to deliver high-grade intersections on the Clementine and Gwenivere vein systems (see below) in the main Hollister Development Block (HDB) area." More
- January 29, 2009 | Item | E-mail


Exploration Update: Twelve Drills Turning on MAG Properties - "MAG Silver Corp. (Toronto:MAG.TO - News)(AMEX:MVG - News) ("MAG" or "the Company") is pleased to provide an update on the Company's 2009 exploration programs now underway. The Company has budgeted an aggregate $17.0 million in 2009 for the Juanicipio Joint Venture and high-priority targets on four of its wholly-owned properties in Mexico. A 25,000 metre drilling program is scheduled for Juanicipio while a further 30,000 metres of diamond drilling is planned for the Company's own projects." More
- January 29, 2009 | Item | E-mail


IAMGOLD Announces 2008 Gold Production of 997,000 Ounces and Provides Outlook for 2009 - "IAMGOLD Corporation ("IAMGOLD")(Toronto:IMG.TO - News)(NYSE:IAG - News)(BOTSWANA: IAMGOLD) is pleased to provide an update of 2008 operational performance and provide guidance for 2009 production, costs, development and exploration." More
- January 29, 2009 | Item | E-mail


International Minerals News Release: Revised - International Minerals Announces Addendum to Preliminary Feasibility Study and Updated Gold Resource Estimates at - "International Minerals Corporation (TSX:IMZ - News) (Zurich (SIX):IMZ) revises and replaces previous news release dated January 26th, 2009 and reports the results of an internally-prepared addendum study to the previously released preliminary feasibility study and an updated mineral resource estimate for the Gaby gold porphyry deposit (“Gaby Project”) in southern Ecuador. The Gaby Project is currently on hold pending the expiry of a Mining Mandate (which has suspended all exploration and production activities in Ecuador since April 2008) and the approval of a new mining law, which is expected in the coming weeks." More
- January 29, 2009 | Item | E-mail


Full Production Achieved on Expansion Projects at end December 2008 - "Gold Fields Limited (JSE and NYSE: GFI) today announced headline earnings for the December 2008 quarter of R484 million, compared with earnings of R39 million and R456 million for the September 2008 and December 2007 quarters respectively. In US dollar terms headline earnings for the December 2008 quarter were US$55 million, compared with earnings of US$5 million and US$67 million in the September 2008 and December 2007 quarters respectively." More
- January 29, 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 another 19 drill holes (19 other holes were previously reported on January 13, 2009) of 54 core drill holes completed in the last five months on its high-grade Bongará zinc-lead project in northern Peru. Highlights include drill hole V-110 that cut 3.2 meters grading 24.07% zinc, 4.14% lead and 52.8 grams per tonne ("gpt") silver and hole V-130 that intersected 9.0 meters grading 10.17% zinc, 0.95% lead and 7.35 gpt silver. The 54-hole, 16,468 meter program was managed and entirely funded by Solitario's joint venture partner Votorantim Metais." More
- January 29, 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 29 January, 2009 | |


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