Gold Seeker Closing Report: Gold and Silver Fall About 3%

	Close	Gain/Loss
Gold	$915.70	-$26.10
Silver	$12.91	-$0.43
XAU	115.50	-3.40%
HUI	275.82	-3.23%
GDM	871.09	-3.62%
JSE Gold	2805.07	+7.87
USD	89.17	+0.52
Euro	126.04	-0.49
Yen	101.20	-0.60
Oil	$47.07	+$1.55
10-Year	2.886%	+0.058
T-Bond	127.50	-1.0625
Dow	6547.05	-1.21%
Nasdaq	1268.64	-1.95%
S&P	676.53	-1.00%

Gold traded just slightly lower in Asia and London, but it then plummeted for most of trade in New York and ended near its low of $912.20 with a loss of 2.77%. Silver traded about 1% lower in Asia before it rose in London to see a gain of seven cents a little after 9AM EST in New York, but it then fell back off for most of the rest of trade and ended near its low of $12.879 with a loss of 3.22%.

Euro gold fell to about €725, platinum lost $8 to $1058, and copper fell roughly 5 cents to about $1.63.

Gold and silver equities fell over 3% in the first hour of trade and remained at about that level for the rest of the day.

There were no major economic reports today. Tomorrow at 10AM EST is the Wholesale Inventories report for January expected at -1.0%.

Oil rose on the expectation for more production cuts from OPEC. A naval incident between the US and China also added a geopolitical premium. “The U.S. State Department said five Chinese ships, including a naval vessel, harassed an unarmed U.S. Navy ocean surveillance ship in international waters in the South China Sea on Sunday.”

The U.S. dollar index rose on renewed safe haven buying spurred by the belief that US is in better shape than most of the rest of the world. The bulk of toady’s gains came versus the yen as Japan posted its first trade deficit in 13 years. The pound was also weak as the U.K. government took a majority stake in its biggest mortgage lender, Lloyds Banking Group Plc.

Treasuries fell on persistent worries over upcoming supply. This week alone brings auctions of $63 billion with “$34 billion in new three-year notes on Tuesday, $18 billion in reopened 10-years on Wednesday and $11 billion in reopened 30s on Thursday.”

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

Among the big names making news in the market today were Citigroup and Smith Barney, McClatchy, Eastman Chemical, McDonald’s, and Merck and Schering-Plough.

I wonder how much of our own tax money, also known as TARP, TALF, CRAP or whatever, has found its way into the coffers of the government’s friends at the Comex and is being used to trash the price of paper gold. I would think that if someone threw $20 billion here or $40 billion there my way that I could do some strange things to whatever markets I wished. Needless to say, the mugging that regular occurs when trading rolls into New York continues. Maybe we should set up an algorithm that computes how far down they can take gold based on a certain number of points up on the DOW… let’s see – 80 DOW points up means $20 down in gold…. 100 DOW points up translates to what, $40 down on gold, etc.?

I read an article last evening about some of the big hedge funds moving into gold. Too bad that they still have not figured out that they could break the death grip of the bullion banks by standing for delivery and removing the warehouse gold. Those guys will simply never learn. I suppose we should not expect anything different. After all, they are products of the American public education system and the inherent bias against the yellow metal among the elites in the West. “Students – repeat after me – Paper – GOOD; GOLD –BAD; now write that 1,000 times and turn it in at the end of class today”.

It is evident that the Chinese will have to do the heavy lifting for these mental lightweights. News out of China that the head of the National Administration has advised diversification of China’s massive foreign reserves into gold, oil, and other strategic commodities is further confirmation of the thinking that now prevails in the upper echelons of China’s political powers. They know full well what is going on and are intelligent enough to secure the real deal, not paper scraps like the hedge funds seem to love lining their bird cages with. Any weakness in gold will absolutely delight the Chinese who are looking at ways to reduce their glut of Dollar holdings but do so in a way that does not throw the forex markets into a tizzy.

It should be noted that the Chinese are not momentum traders – they trade the way the professionals in this industry formerly traded – they buy into weakness when the long term trend favors a market. Hedgies will end up selling into the hands of the Chinese.

Technically gold ran into selling resistance at the 20 day moving average on Friday and at the now downtrending 10 day moving average in today’s session. The bearish crossover of the 10 day below the 20 day is a sell signal for the short term oriented. Downside support now lies back at the 40 day and 50 day moving averages coming in near $910 and $900 respectively. If we can hold above those levels, the most likely outcome then becomes a range trade and a period of consolidation since it is evident that the official sector price capping is too strong right now for the bulls to push it out of the way. A downside breach of the 50 day moving average puts $890-$880 into play. Prices will have to break above $960 to resume the upward trend.

We are back to the 11:00 AM CDT bashing of gold which occurs when the physical market closes in London. That is when the paper sellers double down on their orders and go gunning for stops. I have seen this occur so many times since 2002, that it might as well be part of the official Comex rules.

Traders are now myopically focused on the reported holdings in GLD to the point of obsession. If they do not see those rise, they sell… Now that’s what I call a strategic, forward-thinking, long term oriented, macroeconomic approach to trading/investing. That’s what we get for dispensing so much Ritalin to children who could not learn to sit still and pay attention. They apparently never learn to do so even when they become adults and become traders.

There still appears to me to be a fair amount of long crude/short gold spreading taking place. The thinking behind that play is that the worst of the economic carnage is over, commodity markets look to be perhaps bottoming, stocks are showing insufficient selling pressure to break into new lows and that therefore gold and other safe havens are no longer needed (hence the weakness in the bonds). You then buy crude oil on the expected economy recovery and get rid of gold.

Readers who have not yet purchased any physical gold but who have all their “insurance” money in the paper ETF or even only in the mining shares, take advantage of these bouts of price weakness to institute scale down buying programs. There is no substitute for owning the actual metal especially with so many well-founded doubts about that ETF. Remember – this is for buyers of the real metal – traders have to deal with what the market gives them and utilize sound and disciplined money management practices.”- Dan Norcini, More at JSMineset.com

“April Gold closed down 24.7 at 918. This was 2.9 up from the low and 22 off the high.

March Silver finished down 0.373 at 12.95, equal to the high and equal to the low.

The gold market saw a weaker opening and generally ended up favoring the bear tilt throughout the trading session. The combination of a higher Dollar, sagging equities and talk of profit taking seemed to leave the market undermined from a number of fronts. Some traders suggested that the market was seemingly gunning for the even number $900 level after failing to sustain above the $1,000 level at the end of last month. For the time being, it would seem as if strength or weakness in the equity market is being seen as a negative for gold prices, especially since the fear and anxiety toward the financial sector is still in place but yet gold prices don't seem to be as interested in that argument.

The silver market started out soft and seemed to take its direction from the weakness in gold prices and the strength in the US Dollar. With copper prices showing some profit taking and equities at times down hard, it is possible that a number of silver bulls were simply banking profits and moving to the sidelines. While the last positioning report in silver showed a net spec and fund long positioning, the positioning in silver didn't appear to be as overbought as the positioning in the gold market.”- The Hightower Report, Futures Analysis and Forecasting

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 0.3 tonnes from its record high holding and the LSE subtracted 2.75 tonnes.

Barrick’s (ABX) shut pit, Newmont’s (NEM) community relationships review, Harmony’s (HMY) costs, Ivanhoe’s (IVN) Investment Agreement review, Excellon’s (EXN.TO) financial results, Fortuna’s (FVI.V) completed acquisition of Continuum, and ECU Silver’s (ECU.TO) recovery plant acquisition were among the big stories in the gold and silver mining industry making headlines today.

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

Medoro In Total Support of Director - More
- March 09, 2009 | Item | E-mail

Excellon Reports Q2 Financial Results - "Shipped 273,646 ounces of silver, 1,476,337 pounds of lead, and 1,269,544 pounds of zinc. Additional high-grade silver, lead and zinc assays reported for the recently-discovered NE-1 Manto. Resumed normal operations following suspension of mining activities after successfully resolving unexpected mine water inflow. Suspended construction of Platosa mill and initiated evaluation of processing options. Loss of $0.005 per share" More
- March 09, 2009 | Item | E-mail

Fortuna Completes Acquisition of Continuum and 100% Ownership of San Jose Project, Mexico - "Fortuna Silver Mines Inc. (CDNX:FVI.V - News)(BVLAC: FVI) - Fortuna is pleased to announce that its acquisition of all of the issued and outstanding securities of Continuum Resources Ltd. has now closed. As consideration for the acquisition of Continuum, Fortuna has issued 6,786,706 common shares and now has a total of 92,118,365 common shares outstanding." More
- March 09, 2009 | Item | E-mail

Dr. Noel White Becomes Asia Now's Chief Technical Advisor - More
- March 09, 2009 | Item | E-mail

Hana Mining Reports 2.69% Cu and 41.0 g/t Ag Over 15.0 Meters and 1.05% Cu and 11.3 Ag Over 9.0 Meters-Newest Drill Intercepts From Ghanzi Copper-Silver Project - More
- March 09, 2009 | Item | E-mail

Canada Lithium Corp. Update on Great Basin Brine Exploration Joint Venture - More
- March 09, 2009 | Item | E-mail

Eastern Goldfields, Inc. completes successful transition from open cast to underground production and raises $1.72 million - More
- March 09, 2009 | Item | E-mail

Barrick Tanzania unit says shuts pit, cuts jobs - "The Tanzanian arm of Canada's Barrick Gold Corp (ABX.TO) has shed 200 jobs and shut one pit at its North Mara Gold Mine due to unexpectedly high operating costs, the company said on Monday." More
- March 09, 2009 | Item | E-mail

ACC's Proposed Debt Conversion Price is Inadequate, Augen Gold Special Committee Concludes - More
- March 09, 2009 | Item | E-mail

NQ Exploration Inc.: Jacquelin Gauthier Appointed as Vice President, Exploration - More
- March 09, 2009 | Item | E-mail

Lake Victoria Mining Company Reports Drill Progress at Geita Gold Project, Northern Tanzania - More
- March 09, 2009 | Item | E-mail

Geoinformatics announces termination of letter of intent with Southwestern Resources - More
- March 09, 2009 | Item | E-mail

Hawk Announces Results of Shareholders' Meeting - More
- March 09, 2009 | Item | E-mail

Caldera Trading on TSX Venture Exchange - More
- March 09, 2009 | Item | E-mail

Canadian Royalties Inc.: Implementing a New Longer Term Business Plan - More
- March 09, 2009 | Item | E-mail

Etruscan's Youga Gold Mine produces over 15,000 ounces in Q1 2009 - More
- March 09, 2009 | Item | E-mail

Augyva Announces Changes to Management - More
- March 09, 2009 | Item | E-mail

Golden Band Resources - La Ronge Gold Project update - More
- March 09, 2009 | Item | E-mail

Managing Director of Semafo Guinea Elected President of the Chamber of Mines - More
- March 09, 2009 | Item | E-mail

Lions Gate Metals Files New NI 43-101 Technical Report - More
- March 09, 2009 | Item | E-mail

Nevada Exploration Inc. Shareholders Approve Change of Board of Directors - More
- March 09, 2009 | Item | E-mail

Mercator Minerals Ships First Molybdenum Concentrates From The Mineral Park Mine - More
- March 09, 2009 | Item | E-mail

Vantex Acquires a Major Gold Project - More
- March 09, 2009 | Item | E-mail

Uruguay Mineral Exploration: Production for the Quarter Ended February 28, 2009, Outcome of Potential Offer Discussions and Plans for Arenal Deeps - More
- March 09, 2009 | Item | E-mail

ECU Silver Announces Completion of Acquisition of Gold and Silver Recovery Plant - "ECU Silver Mining Inc. ("ECU Silver" or the "Company") (TSX: ECU.TO) is pleased to report that it has completed its previously announced acquisition of a carbon-in-leach (CIL) processing plant located in Velardena, Mexico (the "Plant") from a subsidiary of Hecla Mining Company ("Hecla")." More
- March 09, 2009 | Item | E-mail

Newmont Releases Independent Community Relationships Review - "For Newmont, this transparent process provides a robust and independent analysis of how we manage our community relationships as a company," said Richard O'Brien, President and Chief Executive Officer. "This comprehensive approach offers a valuable and in-depth understanding of the complexities of these relationships, the contexts in which conflicts may occur and recommendations for improvement." More
- March 09, 2009 | Item | E-mail

Harmony says costs not falling fast enough - "Harmony Gold Mining Co.'s (HARJ.J) Chief Executive Officer Graham Briggs said a fall in fuel and steel costs in the wake of the financial crisis had not had a dramatic impact on its bottom line.

Briggs, who was speaking at the Reuters Global Mining and Steel Summit via teleconference from Johannesburg, said the costs had not been coming down as expected, and it had been quite a lot of hard work to get much benefit." More
- March 09, 2009 | Item | E-mail

Report urges miner Newmont to improve local ties - "Newmont Mining Corp, a target of environmentalists who accuse it of polluting water near some of its gold mines, must change its attitude toward local communities and talk more with protesters, according to a shareholder-sponsored report released on Monday." More
- March 09, 2009 | Item | E-mail

Barrick founder sets no limits on gold price - "Peter Munk, founder and chairman of the world’s biggest gold miner, says even now he is no “gold bug”. In a career spanning 60 years, the 82-year-old entrepreneur amassed fortunes in hi-fi consoles and a south Pacific hotel chain before turning to gold mining. A mystical belief in the metal’s value is irrelevant when it quite obviously rises and falls like anything else, he says." More
- March 09, 2009 | Item | E-mail

Ivanhoe Mines Ltd.: Mongolian Parliament's Review of Draft Oyu Tolgoi Investment Agreement Scheduled to Begin This Week - "Mongolia's State Great Khural (national Parliament) is scheduled to begin its consideration this week of the draft Investment Agreement covering the development of the Oyu Tolgoi copper-gold mining complex in Mongolia's South Gobi Region." More
- March 09, 2009 | Item | E-mail

- Would you like to receive the Free Daily Gold Seeker Report in your e-mail? Click here

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.