-- Posted 11 October, 2010 | | Discuss This Article - Comments: Source: SilverSeek.com

The Metals:

Gold climbed to over $1350 in Asia before it fell to see a $3.38 loss at $1340.22 by a little after 8:30AM EST, but it then rallied back higher for most of the rest of trade in New York and ended near its late session high of $1354.07 with a gain of 0.7% at a new record closing high.  Silver dropped to as low as $23.022 by late morning in New York before it bounced back higher in the last couple of hours of trade and ended with a gain of 0.65% at a new 30-year closing high.

Euro gold rose to about €974, platinum lost $17.25 to $1683.50, and copper rose slightly to about $3.78.

Gold and silver equities waffled near unchanged and ended with slight gains.

The Economy:

Three Share 2010 Nobel Economic Prize  Bloomberg

Economists Cut U.S. Growth Forecasts Through 2011 on Job Woes, Survey Says  Bloomberg

`Catastrophic' Foreclosure Halt Meets Wall Street, White House Opposition  Bloomberg

Monetary policy's diminishing returns  Reuters

There were no major economic reports today.  Tomorrow at 2PM EST brings minutes from the fed’s last meeting on September 21^st.

The Markets:

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

Oil edged lower as the U.S. dollar index found slight gains on profit taking ahead of tomorrow’s fed minutes.

The bond market was close today for Columbus Day.

The Dow, Nasdaq, and S&P traded mostly slightly higher and ended mixed on the continued outlook for quantitative easing.

Among the big names making news in the market today were New York Time, Gymboree, Microsoft, and Cnooc.

The Commentary:

“Dear CIGAs,

The push from the 77 level on the USDX looks suspicious to me as the Dollar was spanked rather rudely last evening after the end of the weekend summit which amounted to a gigantic waste of time. It is a given that no one is happy with what is taking place in the Forex markets.

Brazil was active this morning buying up Dollars in an attempt to keep its Real from continuing to levitate higher while the Europeans continue to complain about their Euro bearing the brunt of the currency wars, especially considering the fact that so many of the member countries of the EU are nowhere near being out of the woods on their own sovereign debt woes.

Price movements of the nature we are seeing in the currency markets, especially on the lack of market moving news, therefore are always to be viewed with a great deal of suspicion. It is a given that Central Banks around the globe are becoming more and more active in the foreign exchange arena.

It looks to me like gold might be waiting to see if the Dollar is going to crash through 77 and stay down there before it resumes moving higher and heading towards $1,380. While it is a given that the market is expecting another round of Federal Reserve QE, some are yakking about “potential surprise improvements” in coming data releases that would serve to put the Fed on hold for a while longer and thereby threaten the massive speculative short position in the US Dollar. While anything is possible, given the compounding of the woes involved with the mortgage backed securities fiasco, it is also extremely unlikely that any move higher in the Dollar would be anything more than a dead cat bounce.

By the way, since we have all become convinced that there are effectively or realistically no mortgages backing the so-called “mortgage backed securities” (if the glove does not fit – you must acquit; if the clear owner cannot be disclosed, you cannot foreclose) perhaps we are all finally realizing that what we are in effect witnessing and have been witnessing for 2 years now, is the modern day equivalent of the ancient Alchemy movement. Back then it was the mystic belief that the baser, more common materials could be transmuted into gold thereby filling the coffers of those fortunate enough to unravel the great secret with untold wealth and power. Fast forward to modern times – the banks have attempted to transmute mountains of paper into mountains of wealth. They have “separated” and then “joined together” various scraps of paper debt and made billions pedaling this stuff around the globe. Financial Alchemy was born.

It does appear however that these modern day descendants of that practice are going the same way as their more ancient predecessors.

That brings us to gold – more fears about further currency wars and continued dilution of paper currencies is keeping gold well bid even as it hesitates to make a new all time high in Dollar terms (it did however set a new lifetime high at this afternoon’s London PM Fix). The pit session close above $1,350 keeps it on track for a break of its recent high and should allow it to push on towards $1,380. Today was the highest closing price of gold ever! Support on the downside remains unchanged first near $1,330 followed by $1,320 – $1,315.

Silver continues its impressive display of strength steadily pushing higher and further away from $23. It set another fresh 30 year high near $23.67 overnight and held a fair amount of those gains even in the New York session.

The HUI however is the weak link in the chain continuing to struggle with that region near 520. We need to see it push away from there to the upside and hold above that level for several more sessions to get a clear and sustained leg higher. Apparently those who have lived by the ratio trade are intent on dying by it. I suppose they will have to be carried off the playing field instead of walking off under their own power. In other words, if they were smart, they would get out while they can and eat the paper loss to prevent taking an even deeper loss later.

Incidentally, those of you interested in watching the moves in food prices should know that corn hit its expanded limit to the upside in overnight trade before setting back some. It reached $5.73 bushel and is not far from putting a handle of “6” on itself. Soybeans are nearing $12 with wheat above $7.00.

Once again cotton hit limit up as its price continues getting ridiculously high yet there appears to be no end in sight to the buyers. Analysts are blaming it on China which is buying up all the cotton it can get its hand on and which probably scarfed up the stuff India was making available for export. I guess we are all going to have to switch soon to polyester underwear. Yuk! Forget the cotton/ploy blends – maybe the tag on the back of the shirt will be cotton but that will probably be it! Maybe the alchemists have turned cotton into gold. At least it must seem like that for US growers of the fiber!

Crude oil gave up its gains as the Dollar came off its lows and worked a bit higher. It is continuing to struggle with the $83 level and until it clears it by a wide enough margin or holds above it for at least two-three consecutive sessions, it appears more range bound than anything. As is the case with gold, crude will probably require a Dollar move lower 77 to catapult it convincingly past $83.

Bonds are dead in the water going nowhere in today’s session. The thinking is that they have already factored in the QE move by the Fed so they need another catalyst to kick them higher. The downside appears well supported for now. Any change in the US data releases that might seem to contradict any need of further QE would result in a sell off.”- Dan Norcini, More at JSMineset.com

GATA Posts:

Ron Robins: Manipulated markets can cause ruin

Ambrose Evans-Pritchard: Currency wars are necessary if all else fails

World finance leaders fail to resolve currency dispute

Pat Heller: Metals suppressed again on eve of jobs report

The Statistics:

Activity from: 10/08/2010

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 0.304 tonnes and the LSE added 0.26 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 101.26: +1.1 tonne change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,085.62: +88.23 tonne change from yesterday’s data.

The Miners:

Centerra’s (CG.TO) settled strike and Gold Fields’ (GFI) posted circular were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

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:

Bonanza Goldfields Announces Filing of 1 for 20 Reverse Split - More
- October 11, 2010 | Item | ShareThisShareThis

Gold American Mining Corp. Begins Drilling at Guadalupe Property - More
- October 11, 2010 | Item | ShareThisShareThis

Centerra Gold Kumtor Mine Strike Settled - "Centerra Gold Inc. (TSX:CG - News) announced that unionized employees of its Kumtor Mine in the Kyrgyz Republic have ended the illegal work stoppage and returned to work the evening of October 10. A new collective agreement has been ratified by the union and will be formally accepted and finalized over the next few days. The new agreement will expire on December 31, 2012." More
- October 11, 2010 | Item | ShareThisShareThis

Steele Resources Corporation Enters LOI to Acquire Mineral Rights on Filipinni and Plumas Projects - More
- October 11, 2010 | Item | ShareThisShareThis

Bee Circular Posted to Shareholders and Available on the Gold Fields Website - "Further to the announcement on 7 September 2010 regarding the proposed black economic empowerment transactions, Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) shareholders are advised that the circular referred to therein has been posted to shareholders today and is also available on the Gold Fields website at http://www.goldfields.co.za." More
- October 11, 2010 | Item | ShareThisShareThis

Pan American Goldfields Ltd Announces Operations Update at the Cieneguita Gold-Silver Project - More
- October 11, 2010 | Item | ShareThisShareThis

- Chris Mullen, Gold Seeker Report

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