Gold Seeker Closing Report: Gold and Silver Fall Over 1% and 2%

	Close	Gain/Loss
Gold	$1085.40	-$12.80
Silver	$16.42	-$0.38
XAU	154.72	-0.87%
HUI	392.49	-1.07%
GDM	1175.89	-1.02%
JSE Gold	2272.29	-12.76
USD	78.73	+0.26
Euro	140.19	-0.57
Yen	111.08	-0.45
Oil	$73.67	-$1.04
10-Year	3.644%	+0.014
T-Bond	118.34375	+0.0625
Dow	10236.16	+0.41%
Nasdaq	2221.41	+0.80%
S&P	1097.50	+0.49%

Gold traded mostly slightly lower in Asia and London before it briefly spiked higher in early New York trade and saw a $1.40 gain at as high as $1099.60 at around 9:30AM EST, but it then fell back off into the close and ended at about its low of the session with a loss of 1.17%. Silver steadily fell throughout most of trade and ended with a loss of 2.26%.

Euro gold fell to about €774, platinum lost $31.50 to $1484.50, and copper fell over 11 cents to about $3.21.

Gold and silver equities fell over 2% by early afternoon before they rebounded a bit, but they still ended with about 1% losses.

Report	For	Reading	Expected	Previous
New Home Sales	Dec	342K	366K	370K

The FOMC kept the fed funds rate in its record low range of 0.00% to 0.25% as expected and said that it will remain “exceptionally low” for an “extended period.” However, Kansas City fed president Hoenig dissented from the view that rates need to be kept exceptionally low for that extended period as he sees that “financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted.”

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 1/23 expected at 450,000 and Durable Orders for December expected at 2.0%. Excluding transportation, orders are expected at 0.5%.

Oil fell after the Energy Information Administration reported that crude inventories fell 3.9 million barrels, gasoline inventories rose 2.0 million barrels, and distillates rose 400,000 barrels.

The U.S. dollar index and treasuries rose on risk aversion/safe haven buying after this morning’s dismal New Home Sales report.

The Dow, Nasdaq, and S&P reversed early losses and turned modestly higher after the fed’s announcement eased worries about the economy and any major changes in monetary policy anytime soon.

Among the big names making news in the market today were Apple, Toyota, UAL, Boeing, Caterpillar, and ConocoPhillips.

The December US new home sales number released this morning tripped up the equity markets and brought further buying into the long bond with risk aversion trades the play of the day. Analysts ( I sure wish I could grow up to become one of those!) were expecting sales to climb 2.8% when they actually were reported dropping 7.6% from November 2009. That was once again enough to send money pouring back into the Japanese Yen and to a certain extent, the US Dollar with the result that most commodities were hit by another wave of selling as Managed Money continues to liquidate long positions and some hedgies play the short side.

Gold was up overnight but the home sales number unnerved would-be longs out of fear of further long liquidation by the fickle, short-term oriented crowd allowing bears to shove prices lower. However, the same buyer/buyers of size appeared near session lows and were able to push it up off its worst levels midway through the session. Later on, a wave of fresh selling appeared which overwhelmed their valiant effort to move price higher. So far this buying is coming in any time gold dips below $1100. As I said yesterday, it remains to be seen whether they are large enough to eat into the Managed Money and Hedge Fund algorithm-based selling. The longer gold can hold above support layered between $1080 – $1100, the better the chance of it forging a trading range within a period of consolidation. I want to continually remind the readers that both China and India will become active (if they are not already) on setbacks in the price of gold as their long term strategy of acquiring gold for their reserves is precisely that, “long –term”. They are not momentum buyers but value buyers ( yes, some of them still actually exist in this world of hedge fund idiots). As such, they will look to make their purchases into any waves of speculative long liquidation that might occur. Value buyers show up during period of price weakness (where have you heard that before?)

I am still watching the long bond very closely for signs of any potential upside breakout as that would be the clearest signal to me that this market has voted on an “L” shaped “recovery” (I use the word ‘recovery’ very loosely here because there can be no ‘recovery’ without job creation but that is the favorite buzz phrase for MOPE these days) or worse, another leg down in the economy. A “V” shaped recovery would see the long bond dropping sharply and taking out levels last seen in December of 2009. So far the bonds are having trouble getting through the 118^25 – 119^00 level as sellers are appearing there in size so the jury is still out as to what this market is going to do. Suffice it to say the tendency of late has been for higher prices and lower long term rates. Even on the short end of the curve, the market is saying that the chances of any interest rate hike are basically ZERO. No one in the interest rate markets believes any of the BS coming from those yakking about the Fed moving to sop up excess liquidity. As if they needed any further convincing, today’s home sales number is evidence just how sick the real estate markets remain. Even with the feds throwing around taxpayer money to prop up sales, it just ain’t working. People without jobs do not buy houses. It is just that simple. For that matter they may not be buying many Toyotas either judging by the recalls. Ouch.

One further note on the bonds – supply issues are perhaps the only thing keeping this market from moving much higher for now. Traders are still looking at massive, and I do mean ‘massive’ amounts of bond sales, to finance the spending orgy by the current administration and its pals in the Congress. Any talk about “spending freezes” amounts to a snowball in hell since the amount being discussed is miniscule compared to the overall federal liabilities that are being generated. The current rate of spending guarantees an unsustainable increase in interest payments alone within the next 5 – 7 years. Throw into this hellish mix the pitiful fiscal condition of many of the US States, and the only way this sort of witches brew of fiscal poison can ever hope to be dealt with is through a Dollar devaluation.

While the Dollar was higher today due to risk averse trades, it still appears to be having trouble with the 79 level on the USDX chart. Momentum indicators are positive but momentum is also waning. Bulls will have to push price past that level in a convincing fashion or we are going to see further selling in the form of stale long liquidation. We will continue to watch its activity for signs of what is coming next.

The gold shares as indicated by the HUI were weak once again today. The technical indicators on the daily chart are approaching oversold levels so that might help put some kind of bottom in them but they have a lot of work to do yet to repair the chart damage that has been inflicted. The weekly chart has the 50 week moving average coming in near the 378 level which corresponds with the 38.2% Fibonacci retracement level of the rally from late 2008 through late 2009. The setback in price is pretty much typical of a bull market in a corrective phase. Price could theoretically move as low as 335 or so without doing any serious long term chart damage but that would certainly not be welcome for the friends of gold.

I should note here that since the week of Christmas 2009, gold has been moving almost in lockstep with the price action of the S&P 500. What that tells me is that hot money flows are ebbing and flowing as risk is either in or out. When equities tank, gold tends to move lower and when equities rise, gold tends to rise with it. That is the signature of Managed Money flows. These flows are automated algorithm trades and are the primary drivers of today’s markets. Without them commodities or currencies cannot generate a sustained move higher. However, in the case of gold, gold is also a safe haven trade and therefore a clash arises between these algorithms based on price momentum and value based buyers of large size who are not momentum oriented. The latter group are the pure fundamentalists who study the larger macroeconomic picture and based on their analysis acquire gold for wealth preservation, and in the case of the increasingly influential far-Eastern Central Banks, for diversification of their massive reserves. To further complicate the price action in gold, we have the usual orchestrated bullion bank price rigging activity to deal with which is always present on rallies.

After the move lower in gold since last week, it will be enlightening to have a look at this coming Friday’s commitment of traders data to give us some insight into just how much of this liquidation type selling was present and how much might be fresh short selling.”- Dan Norcini, More at JSMineset.com

“Precious Metals – First off, I remain rip-roaring bullish on gold and silver. The very fact that bearishness is now the prevailing view among the majority makes me even more enthusiastic (if that’s possible). When you consider how widespread bullishness was in early December and just a 10% correction from the all-time high has led to widespread bearishness of bubbles bursting and $500 gold forecasts, you have to realize this is what has occurred all the way up from under $300. The gold perma-bears, who have a worse record than the New Jersey Nets, have misled the masses all the way up. It would be truly sad if it weren’t so comical how these naysayers can say it’s a bubble or grossly overvalued when nowhere in their track record does it ever show them to have been at least constructive on the gold price. Exactly when was gold ever worthwhile in their book?

I continue to believe $1,300+ is a worthy target for 2010 and there’s not even a hint of a major top. Therefore, I want to stay focused on precious metals with gold, then silver, then platinum and palladium in order of attractiveness for me. Yes, gold can correct some more and (perish the thought) can still decline $50 or so from here. But, with several hundred dollars as upside potential, I’m not sweating the $50 possibility. And, besides, despite the gold perma-bears praying to the U.S. Dollar god to somehow rally enough to kill gold, I that believe in the end gold shall surprise many (again) and show good relative strength against the dollar.”- Peter Grandich, Grandich Letter

Note: Change in Total Tonnes from yesterday’s data: The LSE subtracted 0.07 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 79.30 - No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,339.19 - No change from yesterday’s data.

Newmont’s (NRM) gold price outlook, Barrick’s (ABX) gold price outlook, Tanzanian Royalty’s (TRE) exploration agreement, Alexco’s (AXU) appointment, and Oro Silver’s (OSR.V) assay results 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.

NAP Renews Shelf Prospectus - More
- January 27, 2010 | Item | ShareThis

Alexco Appoints Jim Harrington to President, Alexco Environmental Group - "Alexco Resource Corp. (TSX:AXR - News)(AMEX:AXU - News) ("Alexco" or the "Company") is pleased to announce the appointment of Mr. Jim Harrington to the position of President, Alexco Environmental Group. Alexco Environmental Group, a division of Alexco Resource Corp., has offices in Canada and the United States, and is a mine site focused environmental services business providing technical and environmental management expertise and water treatment services to a broad spectrum of mining industry and government clients." More
- January 27, 2010 | Item | ShareThis

Malbex Provides Del Carmen Norte Exploration Update - More
- January 27, 2010 | Item | ShareThis

Rye Patch Appoints In-House Corporate Development Representative - More
- January 27, 2010 | Item | ShareThis

Trans National Minerals Inc. Enters Into Agreement Regarding Its Qualifying Transaction - More
- January 27, 2010 | Item | ShareThis

Newcastle Expands Its Pickle Lake Gold Prospect - More
- January 27, 2010 | Item | ShareThis

Cliffs Acquisition of Freewest Completed - More
- January 27, 2010 | Item | ShareThis

ValGold & Northern Gold Issue Update on Drilling on Garrison Project and Correction to Previous News - More
- January 27, 2010 | Item | ShareThis

Fieldex discovers new REE/Uranium prospect on its Delbreuil property in Quebec - More
- January 27, 2010 | Item | ShareThis

Largo Resources Announces Extension of Term to Purchase Additional Interest at Its Maracas Project, Brasil From Odebrecht S.A. and Vale S.A. - More
- January 27, 2010 | Item | ShareThis

Linear Gold Commences Drilling at Goldfields Project - More
- January 27, 2010 | Item | ShareThis

Kodiak Grants Options to Officers, New Director - More
- January 27, 2010 | Item | ShareThis

Clifton Star Resources Inc.: Ross Glanville Appointed New Board Member - More
- January 27, 2010 | Item | ShareThis

Strateco Closes a CA $15,000,000 Non-Brokered Private Financing - More
- January 27, 2010 | Item | ShareThis

Canaco Discovers New Gold Zone at Handeni-Drills 18 Metres Grading 3.3 Grams Gold Per Tonne at Magambazi North - More
- January 27, 2010 | Item | ShareThis

Northern Gold Mining Inc. and ValGold Resources Ltd. Issue Update on Garrison Project and Clarification to Previous News - More
- January 27, 2010 | Item | ShareThis

Brazilian Gold Signs Definitive Agreement on Boa Vista Project in the Tapajos Region of Northern Brazil - More
- January 27, 2010 | Item | ShareThis

Orex Exploration Inc.: 2010 Drilling Campaign Starts at Goldboro Gold Project, Nova Scotia - More
- January 27, 2010 | Item | ShareThis

Golden Predator Intersects 6.07 gpt Gold over 8.30 m including 16.42 gpt Gold over 3.05 mfrom the South Fosters Zone at Brewery Creek - More
- January 27, 2010 | Item | ShareThis

New Jersey Mining Company Announces Exploration Plans for Toboggan Project - More
- January 27, 2010 | Item | ShareThis

Arianne Files Its Lac a Paul Scoping Study - More
- January 27, 2010 | Item | ShareThis

Mantis reports 2878 g/t rubidium over 9-meter width from its Case pegmatite, lithium-rare-element project - More
- January 27, 2010 | Item | ShareThis

Uranium Bay Stakes Three Prospective Gold Properties Plus a 19th Century Gold and Platinum Project, All Situated Near the Gilbert River in the Beauce Region - More
- January 27, 2010 | Item | ShareThis

Zoloto announces proposed acquisition of the assets of Grafton Resource Investments Limited - More
- January 27, 2010 | Item | ShareThis

Sparton Announces Second Germanium Concentrate Sale and 2009 Revenue From Huajun Operations - More
- January 27, 2010 | Item | ShareThis

One drill hole cuts 5.83 g/t Au over 12 meters including 54 g/t Au over 1 meter on the Nampala deposit in Mali - More
- January 27, 2010 | Item | ShareThis

Pacific North West Capital Corp. Commences Phase II Drilling on the Destiny Gold Project, Québec - More
- January 27, 2010 | Item | ShareThis

Puget Announces First Werner Lake Drill Results - More
- January 27, 2010 | Item | ShareThis

Alto Ventures Ltd.: Phase 2 Drilling Commences on the Destiny Gold Project, Quebec - More
- January 27, 2010 | Item | ShareThis

Dynacor Increases by 58.5% the land area of its Tumipampa property and reports new exploration data on the Au/Cu/Ag/Mo/Bi skarn structure - More
- January 27, 2010 | Item | ShareThis

MPH Godfrey Gold Drill Program Extended, West Timmins, Ontario - More
- January 27, 2010 | Item | ShareThis

Abbastar Provides Update on Talbot Lake Gold Project, Northern Ontario - More
- January 27, 2010 | Item | ShareThis

Palos Capital Converts its $150,000 Debenture into Blue Note Common Shares - More
- January 27, 2010 | Item | ShareThis

Unico, Inc. Announces the Creation of New Board Committees to Take the Company in New Directions - More
- January 27, 2010 | Item | ShareThis

Savant Obtains TSX Venture Approval for Parbec Property Acquisition - More
- January 27, 2010 | Item | ShareThis

Majescor Resources to Acquire SIMACT Alliance Copper Gold Inc. - More
- January 27, 2010 | Item | ShareThis

Underworld Identifies Drill Targets Within New 40 km Trend of Anomalous Gold Mineralization North of White Gold Deposits - More
- January 27, 2010 | Item | ShareThis

Valley High Ventures Ltd.: Drilling Commences at the Cordero Project, Mexico; Surface Work Expands Target a Further 2 Kilometres - More
- January 27, 2010 | Item | ShareThis

UEX/AREVA 2010 Western Athabasca Basin Drilling Programs Underway with Three Drills at Shea Creek and One Drill at Beatty River - More
- January 27, 2010 | Item | ShareThis

Metals Creek Resources Corp. Announces 2.146 g/t Gold Over 12.60 Meters at Staghorn - More
- January 27, 2010 | Item | ShareThis

Levon Commences Drilling at Cordero Project, Mexico Surface Work Expands Target a Further 2 Kilometres - More
- January 27, 2010 | Item | ShareThis

Northern Star Announces First Gold Pour in the Company's History - More
- January 27, 2010 | Item | ShareThis

Xtra-Gold Resources Corp.: Advisory Board and Director Appointments - More
- January 27, 2010 | Item | ShareThis

Tyhee Provides Update On Yellowknife Gold Project, NWT Canada - More
- January 27, 2010 | Item | ShareThis

Tournigan Extends New Zone of High Grade Uranium at Kuriskova - More
- January 27, 2010 | Item | ShareThis

Baffinland Reports Outstanding Sinter Test Results - More
- January 27, 2010 | Item | ShareThis

Playfair Mining Ltd.: Seal Lake Copper Silver Acquisition - More
- January 27, 2010 | Item | ShareThis

Stroud Files NI 43-101 Report Resource Estimate on Santo Domingo Project - More
- January 27, 2010 | Item | ShareThis

Capital Gold Group Makes Donation to 'Hope for Haiti Now' - More
- January 27, 2010 | Item | ShareThis

Rio Tinto Begins Drill Testing Potential Mafic-Ultramafic Targets Located on RPT's Dorion Block-Thunder Bay District - More
- January 27, 2010 | Item | ShareThis

Oro Gold Intersects 8.7 g/t Gold Over 35 Metres In HS Zone At Trinidad Project, Mexico - More
- January 27, 2010 | Item | ShareThis

Tirex Arranges Significant Working Capital Injection and Immediately Remobilizes to Mirdita VMS District - More
- January 27, 2010 | Item | ShareThis

JOURDAN Acquires the Pivert-East Property Adjoining First Gold Exploration Inc. Pivert/Rose Rare Metals Property in the James Bay Mining District (Quebec) - More
- January 27, 2010 | Item | ShareThis

Zazu Receives Positive Metallurgical Results - More
- January 27, 2010 | Item | ShareThis

Sulliden Announces Drill Results-Resource Growth Expected at Shahuindo - More
- January 27, 2010 | Item | ShareThis

Conway Resources Announces $200,000 Private Placement - More
- January 27, 2010 | Item | ShareThis

Great Western Minerals Group Retains Investor Relations Firm - More
- January 27, 2010 | Item | ShareThis

CanAlaska Uranium commences winter drilling program at the Cree East project - More
- January 27, 2010 | Item | ShareThis

Anvil Reports Updated Economic Analysis of Kinsevere Stage II - More
- January 27, 2010 | Item | ShareThis

Strait Gold Announces Grant of Stock Options - More
- January 27, 2010 | Item | ShareThis

DAVOS-Newmont CEO sees gold at $1,025-$1,250/oz in 2010 - "Newmont Mining Corp (NEM.N) CEO Richard O'Brien forecast the gold price to range between $1,025 and $1,250 an ounce this year, though he said it could dip below the lower level briefly." More
- January 27, 2010 | Item | ShareThis

DAVOS-Barrick chairman sees upward gold trend intact - "While the gold price may be volatile, its upward climb is not over, the chairman of Barrick Gold Corp (ABX.TO), the world's biggest gold producer, said on Wednesday." More
- January 27, 2010 | Item | ShareThis

Oro Silver Intersects 9.88 g/t Gold and 109.2 g/t Silver Over 4 Metres Extending High Grade El Compas Vein to the South - "Oro Silver Resources Ltd. ("Oro Silver or the "Company") (TSX VENTURE:OSR - News) has received more positive assay results for five drill holes recently completed on the El Compas vein target on its El Compas property near the city of Zacatecas, Mexico. Four of the drill holes tested the potential to expand near surface high-grade gold and silver mineralization in the north and central-south portions of the El Compas resource area, while the fifth hole tested the potential to expand known mineralization at depth." More
- January 27, 2010 | Item | ShareThis

Tanzanian Royalty Announces Participation of Jinchuan Mining In Program to Explore and Develop Kabanga Nickel Licenses - "Tanzanian Royalty Exploration is pleased to announce that a major Chinese metals company, Jinchuan Mining, has agreed to participate in the exploration and development of the Company’s Kabanga nickel properties in northwestern Tanzania." More
- January 27, 2010 | Item | ShareThis

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