Gold Seeker Weekly Wrap-Up: Gold and Silver Gain About 2% and 5% on the Week

	Close	Gain/Loss	On Week
Gold	$1370.45	-$6.05	+2.00%
Silver	$24.27	-$0.18	+4.93%
XAU	206.06	-1.10%	+0.61%
HUI	522.63	-1.45%	+0.27%
GDM	1584.77	-1.19%	+0.44%
JSE Gold	2534.67	-24.01	+0.04%
USD	76.98	+0.43	-0.35%
Euro	139.73	-1.07	+0.32%
Yen	122.82	+0.04	+0.94%
Oil	$81.34	-$1.35	-1.60%
10-Year	2.576%	+0.081	+8.19%
Bond	131.03125	-1.40625	-2.44%
Dow	11062.78	-0.29%	+0.51%
Nasdaq	2468.77	+1.37%	+2.78%
S&P	1176.19	+0.20%	+0.95%

Gold jumped up to $1385.20 at about 8:20AM EST before it fell to as low as $1362.45 at around 10:30, but it then climbed back higher into the close and ended with a loss of just 0.44%. Silver fell to as low as $24.06 by midmorning in New York before it also rallied back higher and ended with a loss of just 0.74%.

Euro gold remained at about €979, platinum lost $14.25 to $1687.50, and copper gained a couple of cents to about $3.83.

Gold and silver equities fell almost 2% by midmorning and remained near that level for most of the rest of trade.

Report	For	Reading	Expected	Previous
CPI	Sep	0.1%	0.2%	0.3%
Core CPI	Sep	0.0%	0.1%	0.0%
Retail Sales	Sep	0.6%	0.4%	0.7%
Retail Sales ex-auto	Sep	0.4%	0.4%	1.0%
NY Fed – Man. Survey	Oct	15.73	5.75	4.10
Michigan Sentiment	Oct	67.9	68.5	68.2
Business Inventories	Aug	0.6%	0.5%	1.1%
Treasury Budget	Sep	-$34.5B	-$33.5B	-$45.2B

“Federal Reserve Chairman Ben S. Bernanke said additional monetary stimulus may be warranted because inflation is too low and unemployment is too high.”

The shortfall totaled $1.294 trillion in the fiscal year ended Sept. 30, second only to the $1.416 trillion deficit in 2009, the Treasury Department said today in Washington.”

Next week’s economic highlights include Net Long-Term TIC Flows, Industrial Production, Capacity Utilization, and the NAHB Housing Market Index on Monday, Housing Starts and Building Permits on Tuesday, MBA Mortgage Applications and the fed’s Beige Book on Wednesday, and Initial Jobless Claims, Leading Economic Indicators, and the Philadelphia Fed on Thursday.

Oil fell with treasuries as the U.S. dollar index rose on this morning’s economic data and Bernanke’s comments.

The Dow fell on banking worries while the Nasdaq rose on a strong quarterly report from Google.

Among the big names making news in the market Friday were Google, GM, Mattel, Bank of America, and GE.

“Trick or Treat” – That sums up the much awaited speech from Fed Chairman Bernanke. Or perhaps Shakespeare can be slightly modified:

“To ease or not to ease – that is NOT the question. Whether ‘tis nobler to ease in large quantity immediately and suffer further insult to the Dollar as it bears the slings and arrows of the fickle Foreign exchange markets or take arms against that sea of troubles and by opposing them, slam the stock market into the sleep of death. To die, to sleep no more – yea, that is what will happen to me should I end the heartache of the weary economy and the thousand natural shocks that doth pursue it by depriving it of its life’s sustenance. Ay, there’s the rub. For who could bear the whips and scorns of time should I sit idly by in modest stillness and humility while the blast of war sounds against the prosperity of this kingdom. I will stiffen the sinews, summon up the blood, lend my eye a terrible aspect, set the teeth, stretch wide the nostril, hold hard the breath and come to bury the Dollar, not to praise it. Henceforth, beware the ides of October”.

Translation – we are going to gets more Quantitative Easing although no one is sure of just how much.

Do any of you find it offensive that the Fed believes its role is to produce inflation? Apparently a little inflation is a good thing but just not too much of it. Deflation – bad; inflation – good. Hmmm… Personally I would love to be able to leave an inheritance to my children in which the Dollar of my day would still buy the same amount of goods in their day. That is obviously a no-no to the Fed which has presided over a nearly 97% devaluation in the Dollar since their inception back in 1913. These guys seem to believe that the way to create wealth is to pump up the money supply and artificially inflate the price of various assets thereby producing a “wealth effect” which generates consumer spending.

Given the situation, perhaps that is all Bernanke could really say for it is evident that had he announced forthrightly the size and scope of the expected QE, the Dollar would have collapsed, gold soared through $1,400, the Euro taken out 142 and crude oil probably have levitated above $84.

These Fed chairmans have all learned how to play the game by now knowing full well that the markets hang on their every word and pour over their speeches like diviners looking for clues to the future. They speak out of both sides of their mouths so that there is usually something for everybody. Proponents of further QE got that while those concerned about the effects on the Dollar got that. The market reacted as some of us anticipated it might do yesterday when the QE amount was left intentionally vague. Having factored in a large Fed program already, traders who were short the Dollar covered and pocketed profits while gold and silver longs did likewise by selling some of their positions and booking some gains also. Dip buyers however did make their presence felt in both markets in spite of the push back above 77 in the Dollar.

Gold closed at the highest level ever on a weekly chart after setting a new record in nominal terms during Wednesday evening’s session. I would like to see it stay above $1,350 next week on any pit session close as that would evidence that buyers on the sidelines are still interested in the metal while those already long are confident adding on to their positions even at current levels. A dip towards $1,330 – $1,325 should uncover very strong buying if the market posture is to remain as strongly bullish as the current chart patterns suggest.

Silver is still very strong on the charts given the fact that it has run so far and yet experienced so little in the way of any setback in price. There is some light chart support near $24 followed by better and more substantial support closer to $23.20.

The HUI is still hanging tough above the 520 level and if it can close out this week here on a strong note, it will look very good on the long term charts. A close below 520 would be disappointing for the immediate short term prospects but as long as it holds above 500, the weekly chart will look okay. I would not like to see it close below the 490 level as that would portend a delay in any new uptrending move.

The Dollar’s pop off of Bernanke’s comments are not especially inspiring as it still looks and feels heavy to me. One would have thought that it could garner a bit more of a short covering jump but at this juncture, a mere 30 points given the extent and severity of its recent decline has to be unnerving for would be Dollar longs. I want to look at the COT for the Dollar in this afternoon’s reports to see how the momentum funds are positioned. It was only last week that they had moved to establish a NET SHORT position after being long for the better part of the last eleven months. That’s right – the move lower in the Dollar on the USDX has been funds ditching longs and not establishing a sizeable short position. I suspect that has changed considerably over the last week but one thing is for certain – any fund net short position is still very small by any standard of comparison to historical data.

Bonds got hammered on the long end today as the market reacted to the comments of Bernanke that the inflation level was too low. That was interpreted as meaning they will not be buying the long end in their next round of Treasury purchases and down went the bonds. We’ll see if they really believe that if they get back down towards the 130 level. That has been a pretty good level of chart support in the past. Below that 129 comes into play. I think we are going to get more of a range trade in this market until the actual QE is engaged then the market will examine the size and scope.

The problem for the Fed is that the job market stinks and that is going to force their hand. Whether it will do any good is unclear. Personally I doubt it. If low interest rates were the cure, the patient would already be recovering. The problems are systematic and require policy changes at the Federal level. A Republican takeover of the House in the November election might keep the worst aspects of the current Administration’s policies from further wrecking the nation’s fiscal condition but as far as actually advancing any new and actually effective remedies for what ails the nation, that is doubtful until 2012 at the earliest because anything meaningful will be vetoed.

As far as the rest of the commodity world goes today – Cotton finally fell back to earth in a big way after its huge price surge. It is now limit down with a large pool of sell orders sitting there waiting to be filled and no buyers. Maybe we can get some cotton underwear after all. Corn is a tad weaker although it does not appear willing to break much lower. Copper is higher even with the bump up in the Dollar as it is displaying a lot of resilience. Platinum and palladium are sinking lower today. Lumber after being limit up for two days in a row this week hit limit down today although it is off the worst levels, just barely. That is one market that will give anyone who tries to trade it a shortened life expectancy due to gastric related illnesses.

Crude oil fell back to the lower side of its recent trading range as once again its rise was short-circuited up above $83. That level is establishing a great deal of technical chart significance. Natural gas continues its disappearing act as supply overwhelms demand. The moo-moos are up today as packers chase cattle to fill beef needs. All in all overall the commodity sector is seeing a great deal of weakness as money flows out of it today due to the bump in the Dollar and the failure of the anticipated QE to excite the trading community.”- Dan Norcini, More at JSMineset.com

Note: Change in Total Tonnes from yesterday’s data: SPDR added 19.142 tonnes and the LSE ETFS added 0.21 tonne.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 101.68 - No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,163.20: +38.03 change from yesterday’s data.

Northgate’s (NXG) completed sale of an additional US$20 million of 3.50% convertible senior notes and Capital Gold’s (CGC) increase in revenue 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.

St. Eugene Mining Corporation Closes Private Placement - More
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NV Gold Commences Drilling Nevada Gold Property - More
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Cayden Resources Options Morelos Sur Gold Project - More
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Carpathian Gold Reports Voting Results of Its 2010 Annual and Special Meeting of Security Holders - More
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Skyline Announces Closing of First Tranche of Private Placement - More
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Rio Alto Closes US$28 Million Financing - More
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Hornby Bay Announces Closing of Rights Offering - More
- October 15, 2010 | Item | ShareThis

Eastfield Announces Additional Nickel Mineralization at Kilometre 26 Property - More
- October 15, 2010 | Item | ShareThis

Goldeye Establishes Shareholders Rights Plan - More
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SAMEX Mining Corp.: Major Private Placement Funding - More
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Sona Closes Private Placement - More
- October 15, 2010 | Item | ShareThis

Galore Announces $150,000 Flow-Through Offering - More
- October 15, 2010 | Item | ShareThis

Excalibur Provides Results of Soil Gas Hydrocarbon Survey on Sturgeon Lake - More
- October 15, 2010 | Item | ShareThis

First Gold Files Its Positive 43-101NI Report on Pivert/Rose Property - More
- October 15, 2010 | Item | ShareThis

Aquila and HudBay Announce Resource Increase of Over 100% at Back Forty With One Million Ounces of Contained Gold - More
- October 15, 2010 | Item | ShareThis

NQ Arranges a Non-Brokered Private Placement - More
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Reconnaissance Drilling at Helio's SMP Gold Project in Tanzania Intersects Gold Mineralisation in 10 New Targets - More
- October 15, 2010 | Item | ShareThis

Greenlight to Acquire Rare Earth Element (REE) property in New Brunswick - More
- October 15, 2010 | Item | ShareThis

MAWSON ANNOUNCES STRATEGIC PRIVATE PLACEMENT WITH THE SENTIENT GROUP - More
- October 15, 2010 | Item | ShareThis

JOURDAN Discovers New Spodemune (Lithium) Bearing Pegmatites Over 300 Meters by 200 Metres at the Pivert-Stairs Rare Metals Property ... - More
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HudBay Minerals Announces Resource Increase of Over 100% at Back Forty Project With One Million Ounces of Contained Gold - More
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Medusa Mining Limited: Update-AIM Cancellation & Admission to the Official List - More
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Northgate Minerals Announces Closing of Over-allotment Option - "Northgate Minerals Corporation (TSX:NGX.to - News) ("Northgate") is pleased to announce that it has completed the sale of an additional US$20 million of 3.50% convertible senior notes due 2016 ("Convertible Notes") pursuant to the previously announced exercise of an over-allotment option (the "Over-Allotment Option") by a syndicate of underwriters (the "Underwriters") led by UBS Securities LLC. The Over-Allotment Option was granted to the Underwriters in connection with the public offering (the "Offering") of US$150 million Convertible Notes of Northgate which closed on October 5, 2010. Net proceeds from the Offering, including the Convertible Notes sold pursuant to the exercise of the Over-Allotment Option, will be approximately US$163.5 million after deducting the Underwriters' commission and expenses of the Offering." More
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Capital Gold Corporation Reports 42% Increase in Revenue for Fiscal Year 2010 - "Capital Gold Corporation (NYSE AMEX: CGC; TSX: CGC) ("Capital Gold" or the "Company") reported today approximately a 42% increase in revenue for fiscal 2010 and a 95% increase in cash flow from operations for fiscal 2010 compared to the previous year. The Company recorded gold sales of 54,304 ounces for fiscal year end July 31, 2010, and expects to produce between 65,000-70,000 gold ounces in fiscal 2011." More
- October 15, 2010 | Item | ShareThis

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