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

	Close	Gain/Loss
Gold	$1332.80	-$12.40
Silver	$26.82	-$0.55
XAU	196.83	-0.86%
HUI	497.98	-0.52%
GDM	1473.72	-0.62%
JSE Gold	2501.91	-69.13
USD	77.93	-0.07
Euro	136.88	+0.50
Yen	121.60	+0.43
Oil	$86.19	-$1.68
10-Year	3.319%	-0.089
T-Bond	121.71875	+1.40625
Dow	11977.19	-0.03%
Nasdaq	2719.25	+0.06%
S&P	1291.18	+0.03%

Gold fell as much as $22.55 to $1322.65 by about 6AM EST before it rebounded in New York and saw a nice rally in the last couple of hours of trade, but it still ended with a loss of 0.92%. Silver fell to as low as $26.556 by a little after 8AM EST before it also rebounded in New York, but it still ended with a loss of 2.01%.

Euro gold fell to about €977, platinum lost $35.50 to $1779.00, and copper fell over 12 cents to about $4.22.

Gold and silver equities fell a little over 1% at the open and waffled near that level for the rest of the day.

Report	For	Reading	Expected	Previous
Case-Shiller 20-city Index	Nov	-1.59%	-1.5%	-0.84%
Consumer Confidence	Jan	60.6	53.5	53.3
FHFA Housing Price Index	Nov	0.0%	-	0.2%

Tomorrow at 10AM EST brings New Home Sales for December expected at 300,000 and at 2:15PM is a FOMC Rate Decision.

Oil fell on worries over weakening demand from rising interest rates and on speculation over rising supplies in tomorrow’s inventory report.

The U.S. dollar index reversed early gains and ended slightly lower on mixed economic data.

Treasuries added to early gains after today’s $35 billion 2-year note auction sold at a high yield of 0.65% with a bid to cover of 3.47.

The Dow, Nasdaq, and S&P fell on poor earnings reports for most of the day, but a late session rally left all three indices at about unchanged.

Among the big names making news in the market today were 3M, DuPont, BlackRock, AIG, Regions Financial, JPMorgan, Verizon, and J&J.

Selling pressure on gold began immediately after the close of pit session trading yesterday and that selling continued into the overnight hours and then into today’s New York session. In the process, support near the critical $1320 level was tested and held. However, bulls are by no means yet out of the woods as the market still looks heavy right now. It is going to have to climb back above $1345 for starters to give the bulls some relief.

If $1320 were to give way on good volume, get ready for a bit longer protraction in this latest price retracement as that would turn the daily chart quite negative and even dent the bullish aspect of the heretofore armored weekly chart. The weekly is very close to forming a rounded top pattern which would imply a move as low as $1285 before we might see some concerted buying.

We will have to see when the overall spec long side liquidation winds down before we can stabilize. The faster they get out the better. Yesterday we had a massive drop in Open Interest of nearly 82,000 contracts spread across the entirety of the futures board as far out as December 2015. That is simply phenomenal for its sheer size. One has to wonder at this point how much more downside the market is going to be able to generate if those specs who are going to run have now already done so. At first glance I thought the numbers were erroneous!

What I am interested in watching is the extent to which these specs can ditch their longs and whether gold can hold its chart support levels. Rallies are going to be sold as long as price is below the important moving average levels but apparently there is a massive amount of short covering occurring into this long side liquidation as well. Remember a lot of these shorts have been underwater since August of last year. Some who might have been able to hold on in spite of the paper losses are viewing the massive spec selling as a gift into which they can buy and get flat or at the very least reduce some of their exposure to the short side.

Also, Gold is moving from weak hands into strong hands in this leg down. None of the issues that have given rise to the economic turmoil that has led the metals higher have been substantially dealt with. Instead they have been plastered over with money printing, the problems being essentially kicked down the road to be handled later. The hope is that “growth” will take care of the larger issues at hand. That is wishful thinking but for the time being, the Central Banks appear to be winning the battle based on the all the cork popping and toasting that is no doubt going on over in Davos. As said many times in my comments, if lasting prosperity could be built upon a foundation of spiraling debt, other generations far wiser and more frugal than this would have been long ago implemented it. Need more prosperity – just print more money. A massive federal debt of over $14 trillion, the highest in percentage terms of GDP since WWII; states, counties and municipalities in danger of bankruptcy or in serious budget deficits; hundreds of thousands of underwater mortgages, etc, is a problem that is not going to go away merely because electronic digits were transferred to the balance sheets of some entities by the charlatans at the Federal Reserve.

There is also a further inclination to sell commodities in general which is hurting silver in particular as copper and crude oil are both weak, a development which tends to bring the overall sector into disfavor for the time being. That is a complete 180 degree flip from recent weeks when the “improving economy” theme led to ideas that commodity prices were going to move higher as demand globally soared and “risk” trades were jammed on. My how fickle these lovers have become!

When one sees the grains, all of which have a very bullish set of fundamentals also experiencing selling, you can rest assured that it is hedge fund algorithm selling which is occurring. Wheat, which at the immediate moment has the most bullish set of fundamentals going for it was even dragged lower early in the session. Even cotton, which went on overnight to make yet another 140 year high in price, did not escape the selling as it moved over 500 points off its best level after posting that astonishing figure. About the only commodity that I can see that did not move lower today were the hogs, which keep moving steadily higher as the cost for a nice pork chop or some slices of bacon keep heading up and up and up.

The HUI, while weaker today is not utterly collapsing as it moves closer towards a critical support level near the 481 region. Considering the extent of the weakness in the bullion and the overall weakness in stocks today, it is no surprise that it is lower. Gold stocks however continue to get cheaper and cheaper with longer term oriented investors checking their powder to make sure it is dry. Watch for a move down into a new low for this leg followed by a higher close the same day for signs that the selling has been exhausted.

Now that consumer confidence is moving higher and the economy is improving bonds are moving higher. Yes, you read that correctly – higher. Nothing like official sector manipulation of interest rates in the name of sound economic management by the Central Bank to keep the markets running smoothly. One would think that with all the fears of QE being withdrawn by the Fed, (which is what is leading to selling in the commodity complex), that the bond market would be anticipating the same and would be moving lower since that is the sole factor that has been propping the market up. What do we get instead – more of the same QE as the Fed continues its purchases. Either the bond market has gotten it all wrong and the QE is going to continue indefinitely or the commodity sector has gotten it all wrong with that side of things expecting the QE to disappear. And one wonders why there is such stupidly insane volatility in all of our markets these days. If you want to find the chief culprit behind that, look no further than the boy wonders at the Fed, the source of all market mischief and mayhem.

Let’s see what kind of action we get in the Asian markets for gold overnight. I would not be surprised to learn that some of the bigger Asian Central Banks are also closely eying the gold chart in anticipation of a foray into the buy side. During times like these, try to remember the recent talk from some highly placed officials concerning gold’s re-entry into the monetary system. Such comments are not idle chatter but reflect the thinking taking place behind the scenes from many quarters. The nation with the most gold will end up making the rules – none of that is going to be lost on Asia, whose gold holdings as a percentage of their official reserves are pathetically low. Russia is well aware of this and that is why we got the news yesterday that they are going to continue to shore up their official gold holdings. Others nations from that side of the globe will do likewise.”- Dan Norcini, More at JSMineset.com

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 10.926 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 117.06 - No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,478.08: +83.55 change from yesterday’s data.

Golden Star’s (GSS) certification, Richmont’s (RIC) property sale, and Seabridge’s (SA) updated, independent mineral resource model 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.

American Manganese Inc.: Update on Non-Brokered Private Placement - More
- January 25, 2011 | Item | ShareThis

Cavan Ventures Inc. Provides Updates to Shareholders - More
- January 25, 2011 | Item | ShareThis

Augyva Comments on Agreement Between Wisco and Century Holdings - More
- January 25, 2011 | Item | ShareThis

Southern Hemisphere Mining Limited: Changes to the Los Pumas Project Environmental Approval Process - More
- January 25, 2011 | Item | ShareThis

Callinan Amends Terms of Private Placement - More
- January 25, 2011 | Item | ShareThis

Adanac Outlines New Common Share Distribution - More
- January 25, 2011 | Item | ShareThis

Golden Reign Resources Ltd.: Additional High-Grade Gold Prospects Identified in Murra District - More
- January 25, 2011 | Item | ShareThis

ValGold Starts Drill Program on the Tower Mountain Gold Property - More
- January 25, 2011 | Item | ShareThis

Bralorne Gold Mines Ltd.: Mill Permit Draft Received - More
- January 25, 2011 | Item | ShareThis

Steele Resources Corporation Completes Financing Arrangement - More
- January 25, 2011 | Item | ShareThis

Western Lithium Commences Pre-Feasibility Study - More
- January 25, 2011 | Item | ShareThis

Stellar Pacific Ventures Farm-in Namarana Gold Licence in Mali, West Africa - More
- January 25, 2011 | Item | ShareThis

Alexis Announces Fourth Quarter Gold Production - More
- January 25, 2011 | Item | ShareThis

Niblack Joint Venture Drilling Intersects High Grade While Expanding Lookout Zone at Niblack 14.7 Feet of 7.01% Copper, 10.59 g/t Gold, 20.48% Zinc, 192 g/t ag - More
- January 25, 2011 | Item | ShareThis

Woulfe Mining approves Korean Zinc Co Ltd Investment at Annual General Meeting - More
- January 25, 2011 | Item | ShareThis

Kenai Increases Private Placement - More
- January 25, 2011 | Item | ShareThis

Athena Silver Corporation Commences Drilling on Its Langtry Silver Project - More
- January 25, 2011 | Item | ShareThis

Currie Rose Partners With Australian-Based Company to Develop Jubilee Reef Project in Tanzania - More
- January 25, 2011 | Item | ShareThis

Nautilus Minerals Confirms High Grade Gold Mineralisation - More
- January 25, 2011 | Item | ShareThis

Wolverine Expands Finlayson Lake Holdings - More
- January 25, 2011 | Item | ShareThis

LKA Announces Plans to Accelerate/Expand Golden Wonder Exploration - More
- January 25, 2011 | Item | ShareThis

First Quantum Minerals Provides Update on Expansion and Development Objectives - More
- January 25, 2011 | Item | ShareThis

Initial Drill Results from the Lucero Target Confirm Gold Skarn and Underlying Copper-Gold Porphyry Mineralization - More
- January 25, 2011 | Item | ShareThis

Comstock Mining Acquires Key Dayton Resource Area Properties - More
- January 25, 2011 | Item | ShareThis

Sultan Minerals Intersects 1.55 Metres of 7.94 g/t Gold at Its Kena Property, BC - More
- January 25, 2011 | Item | ShareThis

Magellan Extends New Soil Anomaly to 3.8km Length at Coringa Project, Brazil - More
- January 25, 2011 | Item | ShareThis

Rye Patch Gold Continues Drilling Success at Wilco - More
- January 25, 2011 | Item | ShareThis

Trelawney Intersects 95.40 Metres of 1.85 g/t Gold at the Cote Lake Deposit - More
- January 25, 2011 | Item | ShareThis

Glen Eagle Resources Inc.: Drilling Has Started on Authier - More
- January 25, 2011 | Item | ShareThis

Richfield drills 205 metres of 2.04 g/t Au including 81 metres of 4.33 g/t Au - More
- January 25, 2011 | Item | ShareThis

Detour Gold and Moose Cree First Nation Execute and Sign Agreement for the Detour Lake Project - More
- January 25, 2011 | Item | ShareThis

Camino Minerals Corporation: Induced Polarization Survey Underway at Rodeo Gold Project - More
- January 25, 2011 | Item | ShareThis

Marathon Gold Corporation and Mountain Lake Resources Inc. Announce Formation of Joint Venture - More
- January 25, 2011 | Item | ShareThis

Argonaut Gold Inc. Shareholders and Pediment Gold Corp Shareholders Approve Business Combination - More
- January 25, 2011 | Item | ShareThis

Osisko Reports Significant New Intersections at Barnat Extension, Including 3.19 g/t Au Over 142 Metres - More
- January 25, 2011 | Item | ShareThis

Typhoon Exploration Inc Has Begun its Drilling Campaign at Destorbelle - More
- January 25, 2011 | Item | ShareThis

Diamond Frank Exploration Has Begun its Drilling Campaign at Destorbelle - More
- January 25, 2011 | Item | ShareThis

Medusa Mining Limited: Quarterly Activities Report Period Ended 31 December 2010 - More
- January 25, 2011 | Item | ShareThis

INV Metals Reports 2011 Outlook - More
- January 25, 2011 | Item | ShareThis

Chalice Gold Mines Limited: Quarterly Report for Period Ended December 31, 2010 - More
- January 25, 2011 | Item | ShareThis

Charles (Bill) Reed and Alastair Summers Join Meadow Bay Capital to Advance Atlanta Gold Mine to Production - More
- January 25, 2011 | Item | ShareThis

Carpathian Announces Mill & Crusher Acquisition, for the RDM Gold Project, Brazil - More
- January 25, 2011 | Item | ShareThis

Willow Creek to Send Geologist to Dolly Varden Gold & Copper Property, Nevada - More
- January 25, 2011 | Item | ShareThis

Lake Shore Gold to Nearly Triple Gold Production in 2011, Significantly Grow Resources and Increase Exploration Spending - More
- January 25, 2011 | Item | ShareThis

Lake Shore Gold Confirms Broad Mineralized Envelope With High-Grade Sections Around 730 Level at Thunder Creek - More
- January 25, 2011 | Item | ShareThis

Aurum Signs Agreement for the Century Gold Project - More
- January 25, 2011 | Item | ShareThis

Candente Copper Appoints John Black to Board of Directors - More
- January 25, 2011 | Item | ShareThis

Hindustan Zinc Limited Results for the Third Quarter and Nine Months Ended 31 December 2010 - More
- January 25, 2011 | Item | ShareThis

Golden Star Achieves Full Certification by ICMI at Bogoso/Prestea Mine - "Golden Star Resources Ltd. (TSX:GSC - News)(AMEX:GSS - News)(GSE: GSR) ("Golden Star" or the "Company") is pleased to announce that it has been fully certified by the International Cyanide Management Institute (ICMI) at its Bogoso/Prestea mine." More
- January 25, 2011 | Item | ShareThis

Richmont Mines Completes Sale of Its 70% Interest in the Valentine Lake Property - "Richmont Mines Inc. (TSX:RIC - News)(AMEX:RIC - News) ("Richmont" or the "Company") is pleased to announce that it has received a payment of CAN$3,000,000 from Mountain Lake Resources Inc. (TSX Venture:MOA - News) ("Mountain Lake") required to fulfill all of the conditions set out in the Letter Agreement (the "Letter Agreement"), signed in February 2009, that gave Mountain Lake the option to acquire Richmont's 70% interest in the Valentine Lake property (the "Property"), located in Newfoundland." More
- January 25, 2011 | Item | ShareThis

Seabridge Improves Size, Grade and Quality of Courageous Lake Gold Resource - "An updated, independent mineral resource model for Seabridge Gold's (TSX:SEA - News)(AMEX:SA - News) 100% owned Courageous Lake project in Canada's Northwest Territories has (i) significantly increased the measured and indicated gold resources (ii) improved the average grade of the resource and (iii) increased the size of the deposit. The next step is to incorporate the updated resource model, prepared by Resource Modeling Inc. ("RMI") of Stites, Idaho, into a new Preliminary Assessment ("PA") scheduled for completion in April 2011." More
- January 25, 2011 | Item | ShareThis

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