Gold Seeker Closing Report: Gold and Silver Gain Over 1% and 3%

	Close	Gain/Loss
Gold	$905.10	+$13.65
Silver	$12.75	+$0.45
XAU	119.31	+2.69%
HUI	290.64	+3.82%
GDM	901.95	+3.87%
JSE Gold	2355.10	+52.85
USD	85.45	-0.85
Euro	131.46	+1.48
Yen	102.17	+0.07
Oil	$49.62	+$0.77
10-Year	2.927%	-0.037
T-Bond	125.21875	+0.578125
Dow	7957.06	+0.89%
Nasdaq	1652.21	+0.37%
S&P	851.92	+0.99%

Gold and silver held in a tight range at slightly higher levels in Asia and London, but they then exploded higher between 10 and 11AM EST and held near their late morning highs of $908.60 and $12.863 into the close. Gold ended with a gain of 1.53% while silver closed with a gain of 3.66%.

Mildly disappointing Existing Home Sales data was released at 10AM to provide as a catalyst for the move higher in gold and silver, but perhaps a more likely reason for the jump in prices was that around that time some details were released over the government’s plan to issue a massive amount of debt next week. The Treasury Department said it will sell $101 billion in notes next week and some serious and warranted doubts have been raised over whether or not there will be anyone around to buy it all. Another leg down in the dollar may have also been an important factor (see dollar commentary below).

“The Treasury said it will sell $40 billion in 2-year notes on Monday, followed by a record $35 billion in 5-year debt. On Thursday, it will sell $26 billion in 7-year securities. The amounts of 5- and 7-year debt were more than anticipated by economists at Wrightson ICAP, a research firm specializing in government debt. "It's the supply that's coming that is the concern and the palpable disinterest by real money to buy into what's really been range-confined weakness," said strategists at RBS Greenwich Capital.”

Euro gold rose to about €691, platinum gained $5.50 to $1175.50, and copper fell nearly 7 cents to about $1.99.

Gold and silver equities rose over 4% by late morning before they dipped a bit in afternoon trade, but they still ended with about 3% gains.

Report	For	Reading	Expected	Previous
Initial Claims	4/18	640K	640K	613K
Existing Home Sales	Mar	4.57M	4.65M	4.71M

Tomorrow at 8:30AM EST brings Durable Goods Orders for March expected at -1.5%. Excluding autos, orders are expected at -1.3%. At 10AM is the New Home Sales report for March expected at 337,000.

Oil climbed back near $50 as the U.S. dollar index fell rather noticeably after it became clearer that other countries are not joining the fed with its quantitative-easing measures. While the ECB announced this past weekend that it will only be cutting rates by a measured pace of 25 basis points rather than the possible 50 basis point cuts previously expected, the Bank of Canada said today that quantitative easing is only one of the instruments it might “consider using, if required, to achieve its inflation objective.” “The dollar fell 1% against the Canadian currency after the Bank of Canada ‘refrained from implementing quantitative-easing measures immediately,’ said analysts at Action Economics. The foreign-exchange market ‘had been gearing itself up for concrete [quantitative easing] plans from the bank, and with those put off for more than a month, the Canadian dollar has rallied sharply,’ they said.”

Treasuries closed slightly higher while the Dow, Nasdaq, and S&P waffled near unchanged and ended with modest gains on mixed earnings reports.

Among the big names making news in the market today were the credit card firms, Apple, McClatchy, US Airways, UPS, Union Pacific, and Hershey.

Gold put on a very impressive breach of upside resistance in today’s session as bulls were finally able to shove prices high enough to reach the bevy of buy stops that had been building above the $902 level basis June.

If you note on the price chart, the downsloping trendline drawn off the February and March peaks is controlling price so bulls will have to take that out to really give the shorts a good scare and induce further short covering. That trendline comes in and splits the difference between the all important 40 day and 50 day moving averages so we can expect the bears to attempt to make a stand in this region. If bulls can dislodge them from there, a trending move to the upside is likely. If bulls hesitate near this level, expect bears to regain some of their composure.

I am not sure what the catalyst was today that provided the impetus to push prices higher other than the fact that the Dollar was down and most of the commodity markets were higher, a few markets excepted. Equities were struggling today and that might have been generating some further safe haven flows but normally on days in which stocks are weak, we have been seeing the Dollar move higher. That was not the case today however. Regardless, the buying was impressive. If gold can close above the $902 region at the end of the pit session today, it would be very constructive on the price charts and could spur some further short covering heading into the weekend tomorrow.

Incidentally, let me make a quick comment here on my recent posting detailing the narrowing of the spreads in the Comex gold futures market. I fielded some emails from a few of you talking about the low interest rate environment being responsible for that. I want to thank those of you who took the time to jot me the notes. So that I can save a bit of time and avoid having to answer any further emails about this individually (Alas - I must trade if I am to make some sort of living) let me just state that I concur with those of you have expressed that concern. Interest rates most assuredly affect the spread structure as they are part of the cost of carry. With gold the interest rate environment affects gold leasing. But it is also important to note that carry involves storage fees or in the case of gold, vault fees, as well as insurance fees against loss. When a futures market moves into a backwardation structure, the market is no longer paying any potential seller of a particular commodity enough to cover those costs. That is what supposedly induces those sellers to part with the commodity NOW rather than later.

Gold is somewhat different from other commodities in the sense that it is not “used up” like the rest of them. While a small portion of gold does goes into industrial use for various items, the amount pales in comparison to its use as a store of wealth and as jewelry. If prices shoot up high enough, some owners can be induced to part with their gold (mainly from jewelry and other scrap sources) and this supply can then be drawn from to meet the increase in demand.

Gold is not yet in a true backwardation condition but the spreads are moving in that direction and are already very tight. Should gold indeed move into backwardation, it would be indeed be most telling as it would signify that demand is so strong that owners/sellers are not being paid to store and insure the gold.

My own view on this is that while the tightening of the spreads does indeed have a key interest rate component to it, it also confirms the many credible reports that we have been seeing detailing tightness in the spot market particularly for gold bullion coins as expressed by the much higher premiums that buyers are having to pay compared to a year/years ago. It also dovetails with the increase in demand coming out of the various gold ETF’s around the world as well as increased share offerings from Central, et all which I might add is coming at a time in which expected gold supply from mining sources is dropping. While there are of course many fine outfits whose primary business is gold mining, it should not be lost on gold investors that more than a few miners of base metals mine gold as a by-product of their larger production. Low prices for base metals has resulted in inefficient operations being shut in until prices recover across the board for base metals. Until those mines are reopened, the gold that they had been supplying, will have to come from other sources to meet the very strong investment demand that currently exists. I believe some of that is also being reflected in the tightening gold spreads. Nuff said on that for now.

Back to the mining shares as indicated by the HUI and the XAU - the HUI, representing the mainly non-hedged miners, has run right to the 40 day moving average where it is encountering selling resistance. It really needs to get a session close above the 305 level to generate some additional enthusiasm among the bulls and run some of the share shorts out. The XAU’s chart is a bit weaker looking than the HUI at this point.”- Dan Norcini, More at JSMineset.com

“June Gold closed up 14.1 at 906.6. This was 14.6 up from the low and 3.8 off the high.

May Silver finished up 0.45 at 12.755, 0.105 off the high and 0.45 up from the low.

Apparently the gold trade was seeing a large portion of its speculative buying interest off the idea that upcoming Bank Stress test results were potentially poised to throw another anxiety event at the marketplace. Clearly weakness in the Dollar and two sided choppy action in the stock market added to the bull's case. However, with the gold market not seeing direct pressure off the rather dismal sweep of scheduled data from the US one gets the impression that gold was benefiting from slowing fears and that is a change of pace. In fact, the trade seemed to be so infatuated with the potential flight to quality argument that the market seemed to fully discount predictions that 2009 Mexican gold output was poised to rise sharply. In the near term the gold market seems to be playing up the safe haven track and that environment might cause investment interest to improve again.

The July silver contract managed a very impressive range up extension during the Thursday trade. In fact, the silver market seemed to overcome classic evidence of slowing to rally and in the process the market return to early to mid April consolidation high zone. Like gold, the silver market seemed to fanning anxieties that might arise from some US banks receiving their stress test results on Friday. While the Dollar move wasn't that significant, some silver traders might also have been bolstered by the June Dollar's downside extension.”- The Hightower Report, Futures Analysis and Forecasting

Orezone’s (OZN) drilling and testing, ITH’s (THM) drill results, SNS Silver’s (SNS.V) resource estimate, and ECU’s (ECU.TO) first gold pour 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.

Majescor to Acquire Interest in a Strategic Gold-Copper Property in Haiti - More
- April 23, 2009 | Item | E-mail

Lake Victoria Mining Company, Inc. to Exhibit at Upcoming Money Show in Las Vegas, NV - More
- April 23, 2009 | Item | E-mail

Minera Andes announces a new discovery from the 2009 San Jose exploration program - More
- April 23, 2009 | Item | E-mail

SNS Silver Announces Independent Resource Estimate for Crescent Project - "SNS Silver Corporation ("SNS" or the "Company") (CDNX:SNS.V - News) has completed a NI 43-101 resource estimate on its Crescent Property near Kellogg, Idaho. The mineral resource estimate is 6.1 million ounces of silver in the indicated category, and 4.1 million ounces of silver in the inferred category." More
- April 23, 2009 | Item | E-mail

Anaconda Announces First Closing of Private Placement Financing - More
- April 23, 2009 | Item | E-mail

Zoloto Resources announces loan extension - More
- April 23, 2009 | Item | E-mail

Brazauro Resources: Eldorado Gold Corporation Continues Exploration at Tocantinzinho - More
- April 23, 2009 | Item | E-mail

Appointment of Mr. Reginald Olson as Secretary and Treasurer of Trimax Corporation - More
- April 23, 2009 | Item | E-mail

Vior Inc.: Nomination of a Vice-President Exploration - More
- April 23, 2009 | Item | E-mail

Crystal Research Associates, LLC Issues an Executive Informational Overview(R) (EIO(R)) on Visible Gold Mines Inc. - More
- April 23, 2009 | Item | E-mail

Board election and amendment to stock option plan - More
- April 23, 2009 | Item | E-mail

Harte Gold Corp. Flow-Through Financing - More
- April 23, 2009 | Item | E-mail

Firstgold Engages Haywood Securities Inc. to Assist in Restructuring and/or Sale of Company in Light of Creditors Default Notice - More
- April 23, 2009 | Item | E-mail

Chariot Resources Announces Results of Positive Mina Justa Feasibility Study - More
- April 23, 2009 | Item | E-mail

First Quantum Minerals Reports First Quarter 2009 Copper Production of 88,600 Tonnes - More
- April 23, 2009 | Item | E-mail

UC Hub Group Announces the Acquisition of a Gold Recovery Wash Plant - More
- April 23, 2009 | Item | E-mail

Sandstorm Resources Completes CDN$46.8 Million Financing - More
- April 23, 2009 | Item | E-mail

Capella Commences Drilling on the Nevada Gold Project, Maricunga Gold Belt, Chile - More
- April 23, 2009 | Item | E-mail

Patriot Gold Announces Drilling Results for Bruner Project, Nevada - More
- April 23, 2009 | Item | E-mail

Freewest Resources: Ground Geophysics Supports 1.1 Kilometre Strike Length for Big Daddy Chromite Deposit, James Bay Lowlands of Ontario - More
- April 23, 2009 | Item | E-mail

Paladin Energy Ltd: Quarterly Activities Report For Period Ending-31 March 2009 - More
- April 23, 2009 | Item | E-mail

Excel Gold Mining Inc. Launches the Company's Corporate Web Site and Announces More Operational Changes and Settlements - More
- April 23, 2009 | Item | E-mail

Tombstone Exploration Receives $100,000 Private Placement - More
- April 23, 2009 | Item | E-mail

Ventana Updates Private Placement - More
- April 23, 2009 | Item | E-mail

Etruscan appoints new Chief Operating Officer - More
- April 23, 2009 | Item | E-mail

Raytec Provides Update on Seismic Program - More
- April 23, 2009 | Item | E-mail

Laramide Announces Updated NI 43-101 Compliant Resource Report on Westmoreland - More
- April 23, 2009 | Item | E-mail

Avion Resources Announces 1st Quarter Gold Production Of 6,211 Ounces-Ahead Of Plan - More
- April 23, 2009 | Item | E-mail

Vantex Resumes Drilling on Galloway - More
- April 23, 2009 | Item | E-mail

Boxxer Provides Project Overview and Expands Area of Copper Mineralization - More
- April 23, 2009 | Item | E-mail

Orezone Commences Deep Drilling and Metallurgical Testing at Bombore - "Orezone Gold Corporation (Toronto:ORG.TO - News) is pleased to announce an initial 2009 exploration budget of US$1.8 Million, largely for expansion drilling and metallurgical testing on its 100% owned Bombore gold project in Burkina Faso, West Africa." More
- April 23, 2009 | Item | E-mail

ECU Silver Completes First Gold Pour - "ECU Silver Mining Inc. (TSX:ECU - News) is pleased to report that it has successfully poured its first gold/silver dore bars from the oxide mill that was recently acquired on March 9, 2009.

This is a remarkable achievement given the plant was acquired only six weeks ago. We poured a total of 20 bars with a combined weight of 398 kilograms. Assays confirm that the 20 dore bars contain a total of approximately 140 ounces of gold and 7,250 ounces of silver." More
- April 23, 2009 | Item | E-mail

International Tower Hill Reports Extension of High Grade SW Zone and Expansion of Livengood Gold Deposit, Alaska - "International Tower Hill Mines Ltd. ("ITH" or the "Company") (CDNX:ITH.V - News)(AMEX:THM - News)(NYSE Amex: THM.A)(Frankfurt:IW9.F - News) is pleased to announce results from fifteen additional holes from the 2009 Winter resource expansion program on its Livengood Gold Project, Alaska (Table 1). Drill results continue to confirm expansion of the main deposit SW Zone. Hole MK-RC-0120, which is the furthest drilled to the southwest to date, being collared 600 metres south and 400 metres west of the nearest reported 2008 resource hole, returned a high grade zone of 45.7 metres @ 2.11 g/t gold." More
- April 23, 2009 | Item | E-mail

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