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Gold Seeker Closing Report: Gold and Silver Fall Over 2%, But Miners Gain

By: Chris Mullen, Gold-Seeker.com


-- Posted 3 March, 2009 | | Source: SilverSeek.com

 

Close

Gain/Loss

Gold

$914.05

-$24.55

Silver

$12.71

-$0.34

XAU

113.46

+3.12%

HUI

274.70

+2.42%

GDM

870.35

+2.21%

JSE Gold

2570.15

-144.30

USD

88.94

+0.06

Euro

125.66

+0.03

Yen

101.74

-0.96

Oil

$41.65

+$1.50

10-Year

2.938%

+0.019

T-Bond

125.765625

-0.25

Dow

6726.02

-0.55%

Nasdaq

1321.01

-0.14%

S&P

696.33

-0.64%

 
 

 

The Metals:

 

Gold fell as much as $33.65 to $904.95 and silver dropped as much as $0.63 to $12.42 by about noon EST before both metals rallied back higher in the last hour and a half of trade, but gold still ended with a loss of 2.62% and silver closed with a loss of 2.61%.

 

Euro gold fell to about €726, platinum lost $40.50 to $1026, and copper gained nearly 9 cents to about $1.60.

 

Gold and silver equities traded mostly slightly lower in morning trade and then rose to see roughly 4% gains by mid-afternoon before they fell back off a bit into the close, but they still ended about 3% higher on the day.

 

The Economy:

 

Report

For

Reading

Expected

Previous

Pending Home Sales

Jan

-7.7%

-3.5%

4.8%

 

Bernanke and Geithner testified before congress today about the economy and the budget while new details about the TALF program were also revealed.

 

Geithner: will work with Congress on bailout costs  Reuters

Bernanke defends AIG rescue, says U.S. had no choice  Yahoo

Fed Says TALF Program Will Start Loans March 25, May Add Rental-Fleet ABS   Bloomberg

 

Tomorrow at 8:15AM EST brings ADP Employment for February expected at -630,000.  At 10AM is the ISM Services report for February expected at 41.0, and at 2PM is the release of the fed’s Beige Book.

 

The Markets:

 

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

 

Oil rebounded from yesterday’s huge losses on expectations for another cut in production from OPEC.

 

The U.S. dollar index ended slightly higher while treasuries and the Dow, Nasdaq, and S&P ended modestly lower as traders digested comments from Bernanke and Geithner and analyzed the new details of the TALF program.

 

Among the big names making news in the market today were Berkshire Hathaway, AutoZone, Citigroup, JPMorgan, AIG, Goldman Sachs, and Lockheed Martin.

 

The Commentary:

 

Dear CIGAs,

 

The setback from $1,000 continues with gold attempting to uncover some buying support to establish a floor from which it may consolidate. It appeared as if the $930-$920 region might hold it but a push from sellers, either from liquidating longs or fresh shorts (it is unclear at this time), took it into a series of sell stops just below that level and knocked it sharply lower on the day. Silver in particular was rocked as it has proved to have lived up to  its nickname, “the playground of the funds”.

 

Let me reiterate once again, those of you who have not yet secured any of the physical metal but continue to plow all of your cash into the ETF’s, use price weakness such as these periods to acquire the physical metal. Do not buy it when all of the hedge funds are chasing it higher rather buy it from them as they unload. Be smarter than that group and take advantage of their ineptness as traders – that is exactly what the bullion banks do and why they are so easily able to clean their clocks time after time in the Comex paper markets. If you want to make money in the metals, you cannot imitate the actions of the funds or follow the advice of so many of the newsletter writers who also chase prices higher. Rather, institute a scale down buying program in which you can increase the size of your buys as price moves lower. In that way, you lower the overall cost of acquiring the metals even if you do not catch the exact bottom, something which I might add is pretty much a waste of time attempting to do in our brave, new world ruled by hedge funds and their “World of Warcraft” approach to trading. I want to emphasize that this approach is only for those buying the actual metal – traders must be very careful to buy in at technically significant levels or else you can end up as a statistic with no money left in your commodity account. Practice good trading discipline if you are a trader. That means cut your losses.

 

The mining shares are holding very well considering the selling barrage hitting the metals today. It could well be that the ratio of the shares to the metal had gotten too far out of whack again and that is being corrected. Either way it is nice to see them holding so well.

 

Today’s chatter surrounding gold is that record inflows into the gold ETF, GLD, have slowed down or halted. There has not been a reported outflow but neither has there been any increase in reported holdings and that has short term traders moving out waiting for those to resume. Also, there is a bit of thinking that the economic news has been so rotten that deflationary pressures are more likely than inflationary expectations which were beginning to build in the mind of many who are eying the massive liquidity infusions into the system. Short term deflationary-oriented thinking is leading to selling therefore. Lastly, India as a large buyer has been largely absent from gold since it moved to $1,000. They are usually fairly price sensitive over there but I suspect that they are welcoming this price level. We need India to offset any let off in investment demand.

 

Gold is moving down into very solid support near the $900 level with the region between $890 - $880 (our old friend) particularly looking to attract quality buying. Resistance is now $930 on the upside. I am still looking for a solid, consolidation pattern in gold to emerge. So far it is still probing for a low to a potential trading range. Once we get that, and we might just have done that this morning, then this thing can simmer down a bit and that will bring back the jewelry demand that has been absent and will also bring in the longer-term oriented investment buyers. Right now it is too volatile for many players to get involved. Also, a range trade will be the best thing for this market moving forward since it allows for end users to get accustomed to a newer, higher price level. Sticker shock sets in when markets run too high. I still feel very confident that the kind of buying that has driven gold from $680 to $1,000 was NOT primarily from hot money and the majority of the gold buying will therefore “STICK” pretty well. What you are seeing currently in gold is the exit of that portion of “hot money” that got involved in the recent leg up. They may very well be done for now.

 

Copper defied the selling trend today and shot sharply higher as stockpiles were drawn down out of the LME warehouses. Some are reading that as a sign that economic activity might have slowed as much as it is going to but others are saying that the drawdown is due to Chinese buying who like the wise traders that they are, are moving the metal into their stockpiles while prices are cheap. You have to hand it to the Chinese; there are no better long term oriented traders in the world. Those guys play chess while the West plays with a checkers’ mindset. China can diversify out of their Dollar holdings and acquire a valuable commodity at bargain prices killing two birds with one stone. Hats off to them for their savvy.

 

Friends, this madness in the markets is going to be with us a while, I am saddened to say. Your best way to deal with it is to attempt to tune out the day to day gyrations in price and keep a longer term perspective. I know that sounds trite by now but if you allow the hedge fund machinations to shape your fundamentally informed view, you will end up changing your convictions with nearly every tick in price. You cannot beat those guys with their expensive algorithms and computer-generated buying and selling unless you are willing to sit at a screen and trade one minute bar charts and scalp for a living. That might pass for fun among some, but I assure you, try doing that for a few months and see what it does to your family and your health for that matter. For most folks who work for a living and cannot sit in front of a screen all day, they must take a different approach. That means you formulate a long term view and then buy when prices set back and sell a portion of those holdings when momentum chasers run it up. Do it over and over again and you will make money. All you need to do is to take some money out of the middle of the move. Forget trying to nail exact tops and bottoms – that is for braggarts and liars. Let the ever decreasing number of hedge funds cut each other to shreds. Pretty soon only a few will be left.- Dan Norcini, More at JSMineset.com

 

“April Gold closed down 26.4 at 913.6. This was 7.6 up from the low and 15.9 off the high.

 

March Silver finished down 0.355 at 12.695, equal to the high and equal to the low.

 

The gold market remained in a downward motion despite lingering financial sector concerns, weakness in equity prices and some rather dire dialogue from the US Federal Reserve Chairman. With the Dollar higher and a host of physical commodities lower on the day it seemed as if the currency market action was undermining to gold. However, given the magnitude of the slide in the gold market something beyond currency related selling was in play. Certainly seeing a number of chart point violations prompted some stop loss selling but it is also possible that deflationary long liquidation was also at work.

 

Like the gold market, the silver market started out weak and tried to steady itself before ultimately succumbing to the weakness. At times the silver market seemed to be pulled down by macro economic slowing concerns but even that angle was somewhat suspect with the copper market at times managing some very impressive gains. In the end, profit taking and classic economic slowing fears seemed to rule the day. In the face of a sharp drop in pending home sales and very weak US auto sales report it was surprising to see the precious metals weaken as slow numbers have been driving prices lower over the last several weeks.”- The Hightower Report, Futures Analysis and Forecasting

 

GATA Posts:

 

 

A challenge from Tennessee Hillbilly to help GATA

Ted Butler: The smoking gun, Part II

Swiss America has special offer for GATA supporters

Thom Calandra: Papua, Zambia, Tanzania, Quebec?

Emerging economies may seek gold as dollar fears rise

Gene Arensberg: Gold, silver pull back as expected

 

The Statistics:

As of close of business: 3/03/2009

Gold Warehouse Stocks:

8,715,861

+79,998

Silver Warehouse Stocks:

124,119,278

-2,080

 

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

1,029.29

33,092,632

US$ 31,007m

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

Gold Bullion Securities

132.84

4,270,816

US$ 3,885m

Australian Stock Exchange (ASX)

Gold Bullion Securities

12.49

400,461

US$ 365m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

28.62

920,237

US$ 862m

NASDAQ Dubai

Dubai Gold Securities

0.16

5,000

US$ 5m

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

 

COMEX Gold Trust (IAU)

Profile as of 3/2/2009

 

Total Net Assets

$2,046,211,978

Ounces of Gold
in Trust

2,179,872.448

Shares Outstanding

22,150,000

Tonnes of Gold
in Trust

67.80

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

 

Silver Trust (SLV)

Profile as of 3/2/2009

 

Total Net Assets

$3,371,635,899

Ounces of Silver
in Trust

256,697,586.100

Shares Outstanding

260,250,000

Tonnes of Silver
in Trust

7,984.19

Note: Change in Total Tonnes from yesterday’s data: 73.6 tonnes were removed from the trust.

 

iShares Silver Trust bullion holdings fall - Reuters

 

The Miners:

 

Barrick’s (ABX) hopes for a speedy decision on Pascua-Lama, NovaGold’s (NG) award, Ivanhoe’s (IVN) Investment Agreement, New Gold’s (NGD) mineral reserve and resource statements, Minco Silver’s (MSV.TO) mining lease update, and Silver Dragon’s (SDRG.OB) tunneling and trenching work were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1.  Entree

EGI+12.50% $1.00

2.  Freeport

FCX+7.25% $28.41

3.  Seabridge

SA +6.99% $17.15

 

LOSERS

1.  Western Goldfields

WGW -12.94% $1.48

2.  Mines MGMT

MGN -11.30% $1.65

3.  Endeavour

EXK -11.02% $1.13

Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.

       

All of today's gold and silver stock news:

Millrock Announces Agreement With Vale Exploration Canada Inc., Galiuro Copper-Gold Project, Arizona - More
- March 03, 2009 | Item | E-mail


International Samuel Drilling Commences on Reed Lake Project - More
- March 03, 2009 | Item | E-mail


Forsys Metals Corp. Receives Final Court Approval for Arrangement - More
- March 03, 2009 | Item | E-mail


Barrick hopes for speedy Pascua-Lama decision - "Barrick Gold (ABX.TO), the world's biggest gold producer, hopes to make a decision fairly soon on its next potential major mine, the Pascua-Lama project, as it seeks to cut the $2.7 billion cost and hammer out a government deal.

There were only a handful of issues left to settle with the Argentine and Chilean governments, Chief Executive Aaron Regent told reporters on Tuesday in London, following a presentation." More
- March 03, 2009 | Item | E-mail


Canadian Mining Expands San Bernardo Project, Sonora Mexico - More
- March 03, 2009 | Item | E-mail


Tiomin Refutes Jaguar Claims, Has Support of Jinchuan & Seeks Major Transaction - More
- March 03, 2009 | Item | E-mail


Chancery Resources Reports Year-End Performance Highlights - More
- March 03, 2009 | Item | E-mail


Vale Inco reduces workforce in global nickel operations - More
- March 03, 2009 | Item | E-mail


Blue Note Intends to Move From TSX to TSX Venture Exchange - More
- March 03, 2009 | Item | E-mail


New Guinea Exploration Update - More
- March 03, 2009 | Item | E-mail


Ruby Red Resources defines gold-bearing zone 60 m wide and 1200 m long - More
- March 03, 2009 | Item | E-mail


Silver Shield Completes Letter of Intent on El Carmen Mine Mexico, Plans Bulk Sample of Ore Stockpile - More
- March 03, 2009 | Item | E-mail


Mega Uranium Ltd.: Update on Exploration Activities in Cameroon - More
- March 03, 2009 | Item | E-mail


RSM Announces Resignation of Director and Officer - More
- March 03, 2009 | Item | E-mail


Anaconda Announces Initiation of Arbitration Process With JV Partner New Island - More
- March 03, 2009 | Item | E-mail


Orbite: A Successful Exploration Campaign at Grande-Vallee - More
- March 03, 2009 | Item | E-mail


Redcorp Ventures Ltd.: Key Approvals Received for Tulsequah Project - More
- March 03, 2009 | Item | E-mail


Creston Moly Corp. - Stock options granted - More
- March 03, 2009 | Item | E-mail


Garibaldi's Fixed Wing Hyperspectral Survey Defines Multiple New Targets - More
- March 03, 2009 | Item | E-mail


Canadian Royalties Inc.: Nunavik Nickel Project Allammaq and Exploration Update - More
- March 03, 2009 | Item | E-mail


Pasto Bueno: Technical report details tungsten reserves and resources - More
- March 03, 2009 | Item | E-mail


Abacus Strengthens the Engineering Team for the Afton-Ajax Project - More
- March 03, 2009 | Item | E-mail


Colorado Goldfields Inc. Restates Rules of Engagement on Class B Shares and Warrants - More
- March 03, 2009 | Item | E-mail


Bayswater Announces Results From Phase 4 Drilling at Elkhorn Project, Wyoming - More
- March 03, 2009 | Item | E-mail


Sails Capital and Nirek Resources Announce a Letter of Intent for a Joint Venture on Gold Property in Mexico - More
- March 03, 2009 | Item | E-mail


Minco Silver Provides an Update on Sunshine Mining Lease - "Minco Silver Corporation (the "Company" or "Minco Silver") (Toronto:MSV.TO - News) wishes to clarify that the status of the Sunshine Mine under Lease (the "Sunshine Mining Lease") is still a matter to be decided by the Courts as set out in a law suit filed in the Shoshone County District Court between Sterling Mining Company ("Sterling") and Sunshine Precious Metals, Inc ("SPMI") (the "Sunshine Action")." More
- March 03, 2009 | Item | E-mail


NovaGold Receives Thayer Lindsley Mining Industry Award for Donlin Creek - "NovaGold Resources Inc. (the "Company" or "NovaGold") (Toronto:NG.TO - News) (AMEX:NG - News) is honoured to be the co-winner of the Thayer Lindsley Award at this year's PDAC mining conference in Toronto. This award recognizes an individual or a team of explorationists credited with a recent significant mineral discovery anywhere in the world." More
- March 03, 2009 | Item | E-mail


Ivanhoe Mines Welcomes Mongolian Cabinet Endorsement of Draft Oyu Tolgoi Investment Agreement - "John Macken, President and CEO of Ivanhoe Mines (Toronto:IVN.TO - News)(NYSE:IVN - News)(NYSE:IVN - News), today welcomed a Mongolian Government announcement that a comprehensive draft Investment Agreement to facilitate the construction and development of the Oyu Tolgoi copper-gold mining complex now has been endorsed in principle by Mongolia's Cabinet and the country's National Security Council." More
- March 03, 2009 | Item | E-mail


Silver Dragon Updates Progress At Its Dadi Polymetallic Project in Northern China - "Silver Dragon Resources Inc. (OTC BB:SDRG.OB - News) is pleased to announce further progress from recently-completed tunneling and trenching work performed at its Dadi Silver-Lead-Zinc Polymetallic project located in Inner Mongolia, northern China (See press release of January 26, 2009)." More
- March 03, 2009 | Item | E-mail


New Gold Reports Consolidated Reserve & Resource Statements - "New Gold Inc. ("New Gold") (TSX and NYSE Alternext US: NGD) today reports consolidated mineral reserve and resource statements for its mines and development projects as of December 31, 2008. These include updated mineral reserve and resource statements for the Peak and Cerro San Pedro mines, an updated mineral resource statement for the Amapari mine, and previously reported mineral reserve and resource statements for the New Afton development project and the 30% owned El Morro development project." More
- March 03, 2009 | Item | E-mail


Mongolia endorses draft Oyu Tolgoi deal-Ivanhoe - "Ivanhoe Mines Ltd (IVN.TO) said on Tuesday that a draft investment agreement to develop its Oyu Tolgoi copper and gold project has been endorsed in principle by Mongolia's cabinet and the country's National Security Council.

The cabinet will now present the agreement to Mongolia's national parliament, which is meeting in a special session to address budgetary and other issues stemming from the global financial crisis, Ivanhoe said." More
- March 03, 2009 | Item | E-mail


 

- Chris Mullen, Gold Seeker Report

 

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© Gold Seeker 2009

Note: This article may be reproduced provided the article, in full, is used and mention to Gold-Seeker.com is given.

 

 

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 3 March, 2009 | |


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