Gold Seeker Weekly Wrap-Up: Gold and Silver End the Week at New Highs

	Close	Gain/Loss	On Week
Gold	$1316.50	+$8.70	+1.56%
Silver	$22.02	+$0.26	+2.96%
XAU	200.26	+1.68%	+1.61%
HUI	514.45	+0.90%	+1.88%
GDM	1559.98	+0.95%	+1.54%
JSE Gold	2557.19	+21.71	+0.01%
USD	78.09	-0.67	-1.50%
Euro	137.80	+1.50	+2.13%
Yen	120.01	+0.21	+1.13%
Oil	$84.58	+$1.61	+10.58%
10-Year	2.526%	+0.009	-3.29%
Bond	133.375	-0.34375	+1.26%
Dow	10829.68	+0.39%	-0.28%
Nasdaq	2370.75	+0.09%	-0.44%
S&P	1146.24	+0.44%	-0.21%

Gold rose to a new all-time high of $1320.37 by a little after 10AM EST before it fell back off a bit into the close, but it still ended with a gain of 0.67% at a new all-time closing high. Silver climbed to a new 30-year high of $22.14 before it also fell back off a bit, but it still ended with a gain of 1.19%.

Euro gold fell to about €957, platinum gained $22.70 to $1675.20, and copper gained almost 4 cents to about $3.68.

Gold and silver equities rose over 1% in the first hour of trade before they pared their gains a bit into the close, but they still ended decently higher.

Report	For	Reading	Expected	Previous
Personal Income	Aug	0.5%	0.3%	0.2%
Personal Spending	Aug	0.4%	0.3%	0.4%
PCE Prices - Core	Aug	0.1%	0.1%	0.1%
Michigan Sentiment	Sep	68.2	67.0	66.6
Construction Spending	Aug	0.4%	-0.5%	-1.4%
ISM Index	Sep	54.4	54.8	56.3

Next week’s economic highlights include Factory Orders and Pending Home Sales on Monday, ISM Services on Tuesday, ADP Employment on Wednesday, Initial Jobless Claims and Consumer Credit on Thursday, and Wholesale Inventories and September’s jobs data on Friday.

Oil rose while the U.S. dollar index and treasuries fell on decent economic data and a dovish fed speech that sent the Dow, Nasdaq, and S&P modestly higher.

Among the big names making news in the market Friday were Ford, UAL and Continental, BP, and HP.

Another day – another round of brutal Dollar selling. If it is unclear in anyone’s mind that the Fed is in the process of killing the Dollar in order to keep the “animal spirits” of investors from falling into a funk, let the price action of the Dollar convince you to put aside any such reservations. It has now crashed through another support level. First it was critical support near 80. That gave way easily. Then it appeared it might hold 79 for at least a little while after it popped yesterday on the approach towards that level. Today, that gave way like a rotten wooden plank taking it down near 78 before it got a bit of relief. Ominously, there does not appear to be much if anything standing in the way for a fall to 75, where if it takes that out as ignominiously as it has previous “floors”, it is heading to 72 and we are heading to a currency crisis.

As said the other day, ‘overbought’ and ‘oversold’ are relative terms and are meaningless when there is a fundamental driver behind a market’s rise or fall. In the case of the Dollar, once governor Dudley signaled his intent to see the Fed engage in another round of QE, the “oversold” status of the Dollar was rendered moot in today’s session. The reason – traders and investors world wide understand that the supply of dollars is going to be increasing at a faster rate than the demand for those dollars. The result is economics 101 – a drop in price.

As long as the market is convinced that the Fed is going to be engaging in another round of QE, the Dollar is going to fall, not only against the other currencies of the globe, but against the metals, which is why gold and silver prices are rising.

At this point, the only thing that I can see which would cause the Dollar to mount a SUSTAINED rally would be a definitive end to any Fed QE whatsoever. Barring that, the trend for the Dollar remains firmly lower.

That brings us to gold which continues to rise as the Dollar continues to fall. It set yet another all time high in today’s session with the bullion bank barrier at $1,315 giving way. Yesterday’s rebound from the session low indicated good levels of buying continue to surface on dips preventing the shorts from getting any downside traction. Their short covering combined with another influx of fresh money resulted in a surge to $1,322. If the previous pattern holds true, we can expect the bullion banks to retreat towards $1,330 and make yet another stand near that level. Downside support remains near $1,300.

Silver put in another fresh 30 year high today (see the chart) as it pushed through $22 and is holding above that level.

The HUI has recaptured the technically significant chart level of 510 but has yet to take out the last major hurdle standing in its path towards an upside acceleration, namely the 520 level. It has come within a whisker of taking that out in today’s session but fell back in its first real serious attempt at capturing that fortress. If the bulls can muster enough ammunition and conviction for another charge or even two, they should be able to dislodge the bears from behind their ramparts there. Once they do, the mining shares should see some impressive gains.

I think we have solved the mystery of the falling open interest in gold over the last few days. As suspected, it has been the October contract which is the culprit. The total number of contracts still open in there dropped a whopping 5,200 in yesterday’s trade meaning we have seen nearly 23,000 closed out of that month in the last three days time. It is now apparent that the shorts are terrified of delivery issues and are getting out. Because they are NOT ROLLING into the December, they have tipped their hand. This is a most welcome development. We have long stated here at the site that the only way to beat back the short sellers in this market is to force them to either come up with the gold to deliver or refuse to be stampeded and call their bluff. The longs look as if they are doing just that. The result, shorts are running to avoid having to “stand and deliver”.

A mere 1300 contracts left open in the October is miniscule for a month heading into the delivery process.

Crude oil continued its upward progress from yesterday and looks as if it wants to make a try at the recent swing high near $83. A sharp rise through that level would signal that the market is poised for a move up to $87. One of the silver linings in this recessionary contraction has been that energy prices have remained relatively tame by comparison to levels seen a couple of years ago. If crude continues its upward trek that is all going to come to a rather abrupt halt.

On the currency front, the Aussie made yet another new high and looks like it wants to make a run towards parity with the US dollar. It is rapidly approaching levels last seen prior to the onset of the credit crisis back in 2008. We did not see the Bank of Japan in the Forex markets last evening but it might have been a case that traders are still hesitant to take them on at current levels. The Yen backed away from the intervention ceiling on its own last evening although it has not moved significantly lower either. It appears stuck in a rut, with Dollar weakness propping it up but intervention fears capping its rise. Interestingly enough, the Yen is FALLING against the Euro which will help with Japanese exports into the euro zone perhaps alleviating somewhat the concerns of the Japanese business community, which were not especially helped after Japan zone data last evening confirms just how fragile the state of the Japanese economy remains.

Bonds are following the woes or welfare of the equity world this morning moving inversely to stocks as is more the norm for that market. QE thoughts are keeping a floor of support under that market for now.

Grains were spanked pretty hard today along cotton and the livestock markets resulting in some weakness in the overall commodity sector indices as reflected by the CCI (Continuous Commodity Index). Funds had built up some very significant long side exposure across the entire grain complex and with the violation of technical support levels on the chart, they are being flushed out. The catalyst was the USDA report from yesterday which turned the technical picture negative on the daily charts. Corn is flirting with limit down trade as I write this report. Quick, rush out and buy a box of corn flakes before the price goes back up!

Long term these grain prices will be supported but there are technical issues related to speculative positioning which are going to result in wide swings in price even as the macro trend points decidedly higher. A growing global population and a new found prosperity among the emerging economies of Asia and Latin America will keep the ag sector challenged to produce enough grains to feed a hungry world. As a long time trader of the grain markets watching the struggles of farmers who had in the past been plagued by low prices for their product amidst rising costs of production, it is encouraging to see that our farmers will do well in the years ahead. I do expect at some point in time however that the dubiousness of burning our corn crop in our gasoline tanks will be shelved in favor of more efficient bio sources. Corn demand will remain more than robust enough to keep our farmers prospering without government subsiding the ethanol industry.”- Dan Norcini, More at JSMineset.com

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 0.892 tonnes, the LSE added 0.87 tonnes, and the LSE ETFS added 0.02 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 99.72: +0.3 tonne change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9786.47 - No change from yesterday’s data.

Claude’s (CGR) completed sales and offer to prepay debentures, Gold Fields’ (GFI) new housing complex and bond launch, Centerra’s (CG.TO) work stoppage, and Gammon Gold’s (GRS) merger with Capital Gold (CGC) were among the big stories in the gold and silver mining industry making headlines Friday.

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

ESO Uranium Grants Options - More
- October 01, 2010 | Item | ShareThis

Skyline Gold Announces Flow-Through Private Placement for Deep I.P. Survey and Exploration Drilling Program at Snip/Bronson Creek Gold Basin - More
- October 01, 2010 | Item | ShareThis

North Country Gold Grants Stock Options - More
- October 01, 2010 | Item | ShareThis

The Law Office of Robbins Umeda LLP Announces an Investigation of the Acquisition of Capital Gold Corp. by Gammon Gold Inc. - "Robbins Umeda LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by members of the Board of Directors ("Board") of Capital Gold Corp. ("Capital Gold" or the "Company") (NYSE AMEX: CGC) in connection with their efforts to sell Capital Gold to Gammon Gold Inc. ("Gammon Gold") (NYSE:GRS - News). If the transaction is completed, Capital Gold shareholders will receive a payment of $0.79 in cash and 0.5209 shares of Gammon Gold common stock for each share of Capital Gold common stock they hold, for an implied value of $4.57 per share. The transaction is expected to close in late 2010." More
- October 01, 2010 | Item | ShareThis

Industrial Minerals Clarifies Certain Technical Disclosure - More
- October 01, 2010 | Item | ShareThis

Aurora Gold Corporation Is Pleased to Announce That the Company Has Completed a JORC Compliant Resource Estimate for the Fofoca Target - More
- October 01, 2010 | Item | ShareThis

Opawica Explorations Inc. Announces Assay Results, Atikwa Lake, Ont. - More
- October 01, 2010 | Item | ShareThis

Upper Canada Gold Corporation Announces Assay Results From the Dingman Property 2010 Drilling - More
- October 01, 2010 | Item | ShareThis

Willow Creek Is Moved Back Up to the NASD OTCBB - More
- October 01, 2010 | Item | ShareThis

Eagle Star Minerals Corp.: Geophysical Magnetometer Survey at Serrinha Block Identifies Magnetic Bodies for Future Diamond Drilling - More
- October 01, 2010 | Item | ShareThis

Regal Resources Announces Drill Core and Financing - More
- October 01, 2010 | Item | ShareThis

Claude Resources Inc. Completes Sale of Nipisi Petroleum and Natural Gas Interests and Announces Offer to Prepay Outstanding Debentures - "Claude Resources Inc. ("Claude" or the "Company") is pleased to announce that it has completed a sale (the "Asset Sale") of certain of the Company's petroleum and natural gas assets and rights and other miscellaneous interests in relation to lands located in the Nipisi Alberta area. This Asset Sale together with a previous sale that was completed in August, 2010, constitute the balance of the Company's petroleum and natural gas assets and rights in the Nipisi area. Gross proceeds from these two sales total approximately $6.2 million." More
- October 01, 2010 | Item | ShareThis

Cancor Announces Exercise of Warrants for Proceeds of $690,750 to Fund Gold Exploration Programme - More
- October 01, 2010 | Item | ShareThis

ANACONDA CLOSES PRIVATE PLACEMENT OF NON-CONVERTIBLE DEBENTURES - More
- October 01, 2010 | Item | ShareThis

Rosia Montana Project Update - More
- October 01, 2010 | Item | ShareThis

Guyana Goldfields Inc. Announces Completion of Acceleration Of Warrants - More
- October 01, 2010 | Item | ShareThis

Riva Receives Conditional Approval From the TSX Venture Exchange - More
- October 01, 2010 | Item | ShareThis

Harmony Gold Corp. Announces Signing of Option Agreement with Scorpio Gold (Canada) Corporation and Appointment of Directors - More
- October 01, 2010 | Item | ShareThis

LeBoldus Capital Engages Advanture Capital Partners Inc. for Investor Relations Services - More
- October 01, 2010 | Item | ShareThis

New Global Files 43-101 on El Tesoro Property - More
- October 01, 2010 | Item | ShareThis

Panoro Minerals Closes First Tranche of Private Placement - More
- October 01, 2010 | Item | ShareThis

Platinum Group Metals Announces Increase to Previously Announced Bought Deal Financing to C$125 Million - More
- October 01, 2010 | Item | ShareThis

Moly Mines Cancels Project Finance Options - More
- October 01, 2010 | Item | ShareThis

Liberty Increases Production by 69% and Appoints VP Exploration - More
- October 01, 2010 | Item | ShareThis

Newcastle Adds to Its Pickle Lake Property Holdings - More
- October 01, 2010 | Item | ShareThis

Aldridge Minerals Announces Extension to Option Agreement with Anatolia - More
- October 01, 2010 | Item | ShareThis

Inca Pacific Provides Magistral Update - More
- October 01, 2010 | Item | ShareThis

Bellhaven Announces Fully Allocated Non-Brokered Private Placement for C$4,500,000 - More
- October 01, 2010 | Item | ShareThis

Platinum Group Metals Announces C$100 Million Bought Deal Financing - More
- October 01, 2010 | Item | ShareThis

Crowflight to Introduce Own Mining Equipment and Mining Team at Bucko Lake Mine; Will Temporarily Suspend Operations to Facilitate Improvements - More
- October 01, 2010 | Item | ShareThis

Uranium Resources, Inc. Announces Change in Board of Directors - More
- October 01, 2010 | Item | ShareThis

American Manganese Inc.: Lonnie-Virgil Occurrence Returns Significant Rare Earth Element & Niobium Values From Rock Chip & Soil Samples - More
- October 01, 2010 | Item | ShareThis

Habanero Acquires 5,400 Acres Bordering Beaufield Resources Tortigny Prospect - More
- October 01, 2010 | Item | ShareThis

Halo Announces Increased Financing - More
- October 01, 2010 | Item | ShareThis

Searchlight Minerals Corp. Announces Passing of Director Harry B. Crockett - More
- October 01, 2010 | Item | ShareThis

Gold Fields' Opens New Housing Complex - "Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) today opened a new employee housing project in the Glenharvie community near its Kloof Gold Mine as part of its R550-million, five year housing programme. The new Grootkloof complex, representing an investment of R25-million, will offer housing accommodation to approximately 100 Kloof employees and their families." More
- October 01, 2010 | Item | ShareThis

Gammon Gold and Capital Gold Sign Definitive Merger Agreement - "Gammon Gold Inc. ("Gammon Gold") (NYSE: GRS, TSX: GAM) and Capital Gold Corporation ("Capital Gold") (TSX and NYSE AMEX: CGC) have entered into a definitive merger agreement pursuant to which Gammon Gold will offer to acquire all of the issued and outstanding common shares of Capital Gold in a cash and share transaction (the "Acquisition"). The total consideration for the purchase of 100% of the fully diluted in-the-money shares of Capital Gold is approximately US$288 million or US$4.57 per Capital Gold share based on Gammon Gold's closing price on September 24, 2010 on the NYSE." More
- October 01, 2010 | Item | ShareThis

Gold Fields Launches Debut US$ Bond - "Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI), the 4th largest gold producer in the world and rated Baa3 (stable) by Moody's and BBB- (stable) by S&P (both in the investment grade category), announces the pricing of an offering of 10-year, US$1 billion of Notes consisting of 4.875% Notes due in 2020. Subject to customary conditions, the offering is expected to close on October 7th, 2010." More
- October 01, 2010 | Item | ShareThis

Centerra Gold Kumtor Mine Work Stoppage - "Centerra Gold Inc. (TSX:CG - News) announced that unionized employees of its Kumtor Mine in the Kyrgyz Republic commenced strike action on Friday, October 1. The Company believes this work stoppage is illegal as there is a collective agreement in place which expires on December 31, 2010. Production at the mine has been suspended. The Company is in discussions with the union to resolve the strike action." More
- October 01, 2010 | Item | ShareThis

- 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.