-- Posted 26 February, 2009 | | Source: SilverSeek.com

The Metals:

Gold extended yesterday after hours weakness in Asia and London and fell to as low as $931.75 by late morning in New York to see a loss of $32.80 or 3.4%, but it then rallied back higher in the last couple of hours of trade and ended $10.35 off that low with a loss of just 2.32%.  Silver fell to as low as $12.92 in late trade before it rebounded 5 cents from that low in the last couple of minutes of trade, but it still ended with a loss of 6.66%.

Euro gold fell to about €738, platinum lost $5 to $1044, and copper gained roughly 4 cents more to about $1.56.

Gold and silver equities fell about 2% in the first half hour of trade, but they then rallied back higher to see over 2% gains by mid-afternoon and closed over 1% higher despite notable losses in gold and silver and a declining general market.

The Economy:

Unsurprisingly, all of today’s economic data came in even worse than low expectations.  “The number of U.S. workers drawing jobless aid jumped to record high in mid-February, while the recession undercut demand for manufactured goods last month and sent new homes sales to their lowest since at least 1963.”

Obama’s budget was also officially released today.  Among the details are a $1.75 trillion deficit for this year and a $1.17 trillion deficit next year, but only $533 billion by 2013.  The Drudge Report estimates that the 2009 budget spends $11,833 for every American.  To put these numbers into context, please consider an excerpt from a post by Greg McCoach last week:

“First analogy: If someone spent one million dollars per day each and every day since Jesus was born, it would take another 731 years (beyond today) before one trillion dollars was spent.

·         $1,000,000,000,000 / $1,000,000 per day = one million days

·         one million days / 365 = 2740 years

·         2740 - 2009 = 731 (years remaining)

Second analogy looks at a million, a billion, and a trillion in terms of seconds.  One million seconds comes out to be about 11½ days. A billion seconds is 32 years. And a trillion seconds is 32,000 years!

The third analogy puts dollar bills end to end. If you laid one dollar bills end to end, one trillion dollars would stretch nearly from the earth to the sun. It would take a military jet flying at the speed of sound, reeling out a roll of dollar bills behind it, 14 years before it reeled out one trillion dollar bills!

But the last analogy is the one that absolutely blows my mind. If you took freshly minted brand new $1,000 dollar bills and starting stacking them one on top of another, it would take a stack over 68 miles high to reach one trillion dollars!”

Tomorrow at 8:30AM EST brings fourth quarter GDP expected at -5.4% and the Chain Deflator expected at -0.1%.  At 9:45 is Chicago PMI for February expected at 33.0 and at 10AM is Michigan Sentiment for February expected at 56.0.

The Markets:

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

Oil found nice gains again as OPEC member United Arab Emirates said “that it will cut its April production by 15%-17%.”

The U.S. dollar index was mixed and ended barely higher as the yen’s continued weakness from its recent loss of safe haven status offset strength in the euro and pound which rose on economic data from Europe that was not as bad as reports released in the US today.

Treasuries fell on reinforced worries over the market’s ability to absorb the massive supply of bonds due to be sold to the market in order to fund Trillion dollar deficits.

The Dow, Nasdaq, and S&P ultimately fell over 1% on continued worries about the economy and the banking system.

Among the big names making news in the market today were GM, Cablevision, Limited Brands, JPMorgan, RBS, AIG, and Sears.

The Commentary:

“Dear CIGAs,

Sometimes it is a worthy exercise to try to stand back a bit from the closeness of the one minute bar chart and reflect a bit and ponders the action of markets, which is of course another way of saying the thought patterns of investors whose actions then result in movements in price. When doing so, I am struck by how silly this must appear to a completely, unbiased, impartial, non-involved spectator (of which there may be none in this land). It can actually be a bit humorous.

Look at it this way – millions of investors all across the land are watching one of the most severe, if not the most severe financial crisis unfolding in their lifetime. They have seen age-old companies collapse literally overnight; other name-brand institutions swallowed up and merged into their former competitors, massive job layoffs, automaker executives bowing their knee to their kings in Washington begging for money, entire countries going bankrupt with others teetering on the brink; massive amounts of debt, the likes of which we have never ever before witnessed being piled up like leaves on an autumn day, major US states as well as many urban cities running out of cash with which to meet their obligations, foreclosures which show no sign of abating not to mention the increasing number of delinquencies, etc,. The list could go on and on, you all have seen and read enough about it to fill in the blanks if I left anything out.

Then we get the Chairman of the Federal Reserve sitting on a chair in front of the Congress boldly proclaiming that he sees an end to the recession late this year or early in 2010, PROVIDED that the stimulus package is effective, and SUDDENLY, INSTANTLY, WITHOUT HESITATION, investors all across the fruited plain,  realize how utterly and completely wrong their assessment of things has become. With that they rush wildly back into the stock market on the assurances of the same man who told us back in August of last year, that the fallout was contained and that the institution which he represents had all the tools that it needed to deal with such exigencies at their disposal. Have you ever seriously considered just how incredibly stupid this must look to an outside observer? There was no warning from this man or his fellow compatriots back in July of last year that we were on the verge of such an event – no keen insight into the tenuous nature of things – no trumpet sounded that might alerted investors to the huge imbalances that had formed and were about to come crashing down on the heads of the citizens. And yet, millions of otherwise rational human beings are ready to expect that the worst is behind us and that recovery lies just a few steps ahead of us merely because one man said it POTENTIALLY could be IF something cobbled together by the same group of people who helped create this mess in the first place works?

Excuse me, but I for one would love to see the empirical evidence that these gamblers could present to prove their case. After all, we are not talking about men whose track record at predicting has been exactly accurate. Perhaps if the so-called stimulus package contained anything that had been proven in times past to actually induce economic activity of a lasting nature, I would be inclined to come around and embrace it and join the merry band of those who are happily gobbling up all the paper equities that they can and jettisoning gold but there is nothing in this bill except an increase in the size and scope of government and a lurch into socialistic policies, which have never worked at any time in history. That and a proliferation of debt which is looking more and more like something more closely related to a Biblical plague are what keep me fearful for the future of our nation and make me quite content to be holding the yellow metal as insurance against what these destroyers of wealth are doing.

The simple truth is what was stated by one of the few brave voices in the panel before which Ben Bernanke sat, Ron Paul, who informed the hapless Fed chairman that capital cannot be created out of thin air by means of an electronic printing press and that he was setting the stage for the ruin of the Dollar and runaway inflation. Not to worry however Congressman Paul, Mr. Bernanke assures us that this same Fed which has presided so brilliantly over our current economic debacle, stands ready and willing to deal with the inflation problem when it will arise. With that I can see the gears spinning and the thought processes taking over, “I must SELL GOLD; I MUST SELL GOLD; I MUST SELL GOLD.”

To sum up my lengthy rant, investors listened to the testimony of Bernanke and the speech of the Obama, and decided that at least the US was “doing something” about the crisis and would therefore be the first one to emerge from it. And based on that new thought process, they have decided that the US equity market is the place to be and that gold is once again moving back to its archaic, barbaric relic stage.  Since the stock market is supposedly forward looking, investors are looking forward to an improving economy and are buying in the hope of catching a major low in the equity markets while they sell gold hoping to catch a major top in the yellow metal. Risk in back in! To those of you who get your jollies by writing me and peevishly castigating me for being too long-winded, take that!

Now let’s get on to more serious stuff – gold has dropped down off the $1,000 region and moved into a region of strong chart support. It will need to find enough buying here to offset fresh short selling and long liquidation by the shorter-term oriented trading crowd. Failure near the  session’s low will allow gold to drop down to the next strong level of support which comes in near the $906 level followed by $900.  Below that is our old friend at $880 once again. Given the severity of the economic crisis, I would think that gold should hold here but trying to account for the thinking of the general investing community in this day and age is a hopeless waste of effort. They will do what they will do.  Everything depends on the affinity or lack thereof for “RISK”. I would prefer to see some consolidation activity and some base building to give players some time to get accustomed to the higher price but until then, volatility is the norm. Keep in mind that commercial end users and producers for that matter do not like volatility as it makes it difficult for them to assess risk exposure.”- Dan Norcini, More at JSMineset.com

“April Gold closed down 23.6 at 942.6. This was 9.6 up from the low and 3.8 off the high.

March Silver finished down 0.925 at 12.95, 0.57 off the high and 0.01 up from the low.

The gold market was hit by another session of heavy profit taking as an increase in investor risk appetite prompted a shift away from safe haven assets to riskier ones. Gold was also undermined by higher equity market which held onto gains despite more bearish economic news. Rising signs of unemployment, a drop in durable goods and a slump in new home sales failed to stir up and fresh economic anxiety. In fact, news that the government had proposed another $750 billion to support the financial industry seemed to alleviate some of the extreme distress over the banking sector problems seen earlier in the week and that also seemed to diminish the appeal of gold. A lack of fresh investment flows into gold-backed securities also contributed to the negative market bias.

The silver market was pushed sharply lower which seemed to snowball as the market fell though several critical chart points. The silver market's extreme overbought condition certainly contributed to the selling bias this session. But buying interest in silver has also dried up as the government revealed details on its banking sector rescue plans and as the President puts aside extra funds in the budget to shore up the financial system which has taken away some of uncertainly and the need for safe haven investments.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Another friend offers to match the next $300 in donations to GATA

The Statistics:

As of close of business: 2/26/2009

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: The LSE added 0.78 tonnes.  SPDR remains at the record high holding reached last Friday.

COMEX Gold Trust (IAU)

Note: Change in Total Tonnes from yesterday’s data: 1.99 tonnes were removed from the trust.

Silver Trust (SLV)

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

The Stocks:

International Royalty’s (ROY) annual results, Richmont’s (RIC) fourth quarter results, Newmont’s (NEM) Indonesian output, Randgold’s (GOLD) discussions with Moto Goldmines (MGL.TO), First Majestic’s (FR.TO) resource disclosure clarification, U.S. Silver’s (USA.V) credit facility, SNS Silver’s (SNS.V) assumed operation of the Sunshine Mine, Arian’s (AGQ.V) share exchange transaction, and Scorpio’s (SPM.TO) 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:

Delta's Subsidiary Proposes Formation of New Gold Company With Carlisle Goldfields - More
- February 26, 2009 | Item | E-mail

Carlisle Goldfields Limited to Acquire Gold Properties From Delta Uranium Inc. - More
- February 26, 2009 | Item | E-mail

Orex Closes Hard Cash Private Placement - More
- February 26, 2009 | Item | E-mail

Golden Dawn Announces the Closing of a $120,000 Private Placement - More
- February 26, 2009 | Item | E-mail

Luna Gold closes $31 million private placement - More
- February 26, 2009 | Item | E-mail

First Majestic Silver Corp.: Resource Disclosure Clarification - "In respect of the January 13, 2009 news release, the Company advises that it added Resources and Reserves in compiling its global resource figures. Also, the news releases issued on December 23, 2008, January 13, 2009 and February 17, 2009, added Inferred Resources to other categories of Reserves and Resources. These practices are not permitted under NI 43-101 and the Company has now discontinued this practice. The disclosure in each of the news releases and the Company's technical reports as to each separate category of Resources or Reserves are accurate as of their respective dates, however prior disclosure of global resources and total resources should not be relied upon." More
- February 26, 2009 | Item | E-mail

Temex and Nuinsco report drill results - Marijane and Huston Lake properties - More
- February 26, 2009 | Item | E-mail

Champion Minerals Assay Results From the Attikamagen Iron Property Confirm Taconite Potential - More
- February 26, 2009 | Item | E-mail

Crowflight Now Debt Free After Closing Out Hedge - More
- February 26, 2009 | Item | E-mail

LiteWave Corp. Announces Final Agreement Executed on Quebec's North Shore Platinum Group Elements and Gold Exploration Properties - More
- February 26, 2009 | Item | E-mail

Avalon and Chapleau Cree First Nation Agree to MOU Around the Development of the Warren Township Calcium Feldspar Project - More
- February 26, 2009 | Item | E-mail

Colorado Goldfields Inc. Announces Class B Common Ready for Issue; All Brokers And Shareholders Step Lively - More
- February 26, 2009 | Item | E-mail

The European Bank of Reconstruction and Development Signs Agreement to Finance Lydian - More
- February 26, 2009 | Item | E-mail

Roxmark exhibiting at PDAC - More
- February 26, 2009 | Item | E-mail

MDN Inc.: High-Grade Gold Samplings for Ikungu Project - More
- February 26, 2009 | Item | E-mail

Asia Now finds high-grade zones in the large porphyry copper-gold-molybdenum system at Habo - More
- February 26, 2009 | Item | E-mail

U.S. Silver Announces Debt Financing Facility - "U.S. Silver Corporation (CDNX:USA.V - News) ("U.S. Silver" or the "Company") is pleased to announce that the Company has arranged a credit facility for financing a portion of the Company's concentrate inventory and receivables. The facility provider is Auramet Trading. Auramet, based in Fort Lee, New Jersey, is a leading metals trading, merchant banking and advisory firm specializing in the global resource sector." More
- February 26, 2009 | Item | E-mail

Northern Superior Resources Defines Head of the Big Dam Gold-In-Till Dispersal Apron and Identifies Three New Areas for Gold Exploration - More
- February 26, 2009 | Item | E-mail

Cogitore Resources Inc.: High Grade Hit at Depth on Caribou Project Opens Up Volume Potential - More
- February 26, 2009 | Item | E-mail

Noront Resources Exploration and Development Update - More
- February 26, 2009 | Item | E-mail

Adventure Gold Discovers New Gold Structure on Senore, Closes Non-brokered Private Placement - More
- February 26, 2009 | Item | E-mail

SNS Silver Corp.: Owners of Historic Sunshine Mine Clarify Status of the Sunshine Mine - "Mr. David Greenway, President and Chief Executive Officer of SNS Silver Corp. ("SNS" or the "Company") (CDNX:SNS.V - News), announces that it has entered into an agreement with Sunshine Precious Metals, Inc. ("SPMI") to assume operation of the Sunshine Mine following the abandonment of the property by the past operators, Sterling Mining Company." More
- February 26, 2009 | Item | E-mail

Freewest Resources Canada Inc. Retains Investor-Relations Firm and Proposes to Extend Expiry Date of Warrants - More
- February 26, 2009 | Item | E-mail

Osisko Reports Preliminary Metallurgical Results on Barnat - More
- February 26, 2009 | Item | E-mail

Sage Gold Inc.: 93.72 g Au/T-Channel Sample at Golden Extension Discovery Beardmore-Geraldton Gold Camp - More
- February 26, 2009 | Item | E-mail

Frontenac Ventures Corp. Announces a New Alaskite Type Uranium Discovery, in the East Bancroft Area of Ontario - More
- February 26, 2009 | Item | E-mail

Lundin Mining Releases 2008 Fourth Quarter Results - More
- February 26, 2009 | Item | E-mail

As gold cools, its miners are the next hotspot - "The price of gold might again be testing record highs, driven by investors seeking shelter from the financial blizzard, but shares in companies mining the precious metal now look a better bet." More
- February 26, 2009 | Item | E-mail

Lake Victoria Mining Company Reports Drill Progress at Geita Gold Project, Northern Tanzania - More
- February 26, 2009 | Item | E-mail

Noront Resources Exploration and Development update - More
- February 26, 2009 | Item | E-mail

Nevada Sunrise Gold Corp to Receive Over $5 Million (US) From Sale of Its Kinsley Mountain Property - More
- February 26, 2009 | Item | E-mail

Louvem Mines Reports its Fourth Quarter and Year End Results for 2008 - More
- February 26, 2009 | Item | E-mail

Uracan doubles total near surface NI 43-101 compliant inferred resource in Quebec to 40.7 million lbs U3O8 - More
- February 26, 2009 | Item | E-mail

Rare Element Resources Names Bob Bishop to the Advisory Board; Updates on Rare Earths 43-101 Technical Report and Grants Stock Options - More
- February 26, 2009 | Item | E-mail

International Royalty Corporation reports 2008 annual results - "Royalty revenues for 2008 decreased 16% to $41.7 million, as compared to $49.9 million for 2007. Royalty revenues in the fourth quarter of 2008 were $9.0 million, compared to $12.7 million in the fourth quarter of 2007. The decrease in revenues was primarily driven by a decline in the Voisey's Bay royalty revenue due to a lower realized nickel price of $9.93 per pound in 2008 compared to $16.63 per pound in 2007, that was partially offset by an increase in payable nickel production from 127.9 million pounds in 2007 to 163.6 million pounds in 2008." More
- February 26, 2009 | Item | E-mail

Constitution Mining Contracts AMEC Earth & Environmental to Support Development of the Gold Sands Project - More
- February 26, 2009 | Item | E-mail

Beaufield Resources Inc.: 2008 Exploration Summary at Rouleau and Opinaca Gold Property - More
- February 26, 2009 | Item | E-mail

Southern Hemisphere Mining Limited: Exploration Drilling Results at the Los Pumas Manganese Project, Northern Chile - More
- February 26, 2009 | Item | E-mail

Homeland Uranium Inc. Begins Drill Program in Niger - More
- February 26, 2009 | Item | E-mail

New Dawn's Turk Mine Moves from Care and Maintenance to Mine Development - More
- February 26, 2009 | Item | E-mail

Gemini Explorations, Inc. Announces Preparations for Commencement of Additional Geological Exploration to Further Determine the Extent of Potential Resources - More
- February 26, 2009 | Item | E-mail

CanAlaska Uranium Ltd. - Further drill results from uranium zone at Fond du Lac project - More
- February 26, 2009 | Item | E-mail

Uranium Energy Corp Announces Advances in Permitting for the Goliad ISR Project - More
- February 26, 2009 | Item | E-mail

2008 drill program increases Copper Mountain Resources by 20% as project continues to move forward - More
- February 26, 2009 | Item | E-mail

Melkior Resources Inc.: More Land Acquired and 2008 Drilling Reported on Launay Gold - More
- February 26, 2009 | Item | E-mail

Bruce Power Ontario Bruce 8 reactor back - More
- February 26, 2009 | Item | E-mail

Avion Resources Improves Segala Mine Plan - More
- February 26, 2009 | Item | E-mail

Ucore Uranium Intersects 6.3 Meters Grading 3.9% Rare Earth Metals at I&L Zone, Further Confirms Six Kilometre Strike Length - More
- February 26, 2009 | Item | E-mail

New Dawn Mining Corp. Joins the "AGORACOM 100" and Launches Online IR and Marketing Program - More
- February 26, 2009 | Item | E-mail

VMS Ventures Inc.: Puella Bay Project Drilling Begins - More
- February 26, 2009 | Item | E-mail

Grandview Capital to Evaluate Business Opportunities in China for Thunder Mountain Gold - More
- February 26, 2009 | Item | E-mail

Canasia Industries Corporation: Drill Program Initiated on 199,736 Acre Reed Lake Prospect - More
- February 26, 2009 | Item | E-mail

Arian Announces First Stage Closing Of Share Exchange Transaction With Grafton Resource Investments Ltd. - "Under the terms of the Initial Share Issue, Arian has issued to Grafton 26,097,230 common shares at a price per common share of Cdn$0.055, for a total value of approximately Cdn$1,435,347, and Grafton has issued to Arian 26,322 ordinary shares of equivalent value determined by reference to the net asset value of US$43.98 per Grafton ordinary share calculated as at the close of business on 30 January 2009." More
- February 26, 2009 | Item | E-mail

Richmont Mines Reports Record Sales for the Fourth Quarter and Full Year 2008 - "Revenue for the fourth quarter of 2008 was $22.9 million, a 122% increase compared with $10.3 million in the fourth quarter of 2007. Net income for the fourth quarter of 2008 was $2.1 million, or $0.09 per share, compared with a net loss of $1 million, or $0.03 per share, in the fourth quarter of 2007, as the significant revenue increase in the 2008 fourth quarter more than offset increased operating and exploration costs." More
- February 26, 2009 | Item | E-mail

Scorpio Reports on Drilling of the Main Zone from the 9th Level - "Scorpio Mining Corporation (TSX:SPM - News) is pleased to announce additional underground drill results from the 9th Level targeting the Main Zone at the 100% owned Nuestra Senora mine, Sinaloa State, Mexico." More
- February 26, 2009 | Item | E-mail

Newmont Indonesia sees jump in copper/gold output - "The Indonesian unit of Newmont Mining Corp. (NEM.N) expects copper production to increase by 60 percent this year as it starts to mine higher grade ore, the company said in a statement on Thursday.

PT Newmont Nusa Tenggara, which operates the Batu Hijau copper and gold mine in Sumbawa island in eastern Indonesia, expects to produce 455 million pounds of copper concentrate this year, up from 284 million pounds in 2008." More
- February 26, 2009 | Item | E-mail

Randgold in discussions with Moto Goldmines - "The chief executive of Randgold Resources, the cash-rich African gold mining company, confirmed on Wednesday it is in discussions to acquire Moto Goldmines, a smaller player developing an enormous gold deposit in the Democratic Republic of Congo, in an all-share transaction." More
- February 26, 2009 | Item | E-mail

- Chris Mullen, Gold Seeker Report

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