-- Posted 3 February, 2011 | | Source: SilverSeek.com

The Metals:

Gold fell $3.80 to $1327.20 in Asia before it rose to see a $6.55 gain at $1337.55 in early New York trade and then fell off rather markedly in midmorning trade to as low as $1325.10 by a little after 10AM EST, but it then spiked back higher midday and ended near its early afternoon high of $1355.64 with a gain of 1.58%.  Silver fell to $28.175 at the open of trade in New York before it rose to see an almost 1% gain at $28.487 by about 9AM EST and then dropped to as low as $27.965, but it also surged back higher midday and ended near its early afternoon high of $28.852 with a gain of 1.73%.  Both metals have continued even higher in after hours access trade at the time of writing.

Euro gold jumped to almost €992, platinum gained $7.88 to $1832.75, and copper waffled around its recent all-time high at $4.54 (About $10,000.00 per metric ton).

Gold and silver equities remained near unchanged for much of the morning, but they then climbed higher throughout most of afternoon trade and ended with about 3% gains.

The Economy:

“With output growth likely to be moderate for awhile and with employers reportedly still reluctant to add to their payrolls, it will be several years before the unemployment rate has returned to a more normal level,” Bernanke said today in a speech at the National Press Club in Washington. “Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”

"Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain stubbornly below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate."

Text: Bernanke addresses National Press Club  Reuters

Fed Ignores Inflation With ‘Uber’ Stimulus, Pond Says: Tom Keene  Bloomberg

Overall, Bernanke’s comments were taken as very dovish.  Few believe he will raise the fed funds rate anytime in the near future.

Tomorrow brings jobs data for January.  Nonfarm Payrolls are expected at 163,000, the Unemployment Rate is expected at 9.5%, the Average Workweek is expected at 34.3, and Hourly Earnings are expected at 0.2%.

The Markets:

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

Oil fell and the U.S. dollar index rose as the euro fell after “European Central Bank President Jean-Claude Trichet said inflation expectations in the euro zone remain firmly anchored, dampening speculation of an interest-rate hike.”

Treasuries fell as the Dow, Nasdaq, and S&P largely ignored intensifying conflict in Egypt and rose to find decent gains by the close on better than expected economic data.

Among the big names making news in the market today were TD Ameritrade, NYTimes, Ford, MasterCard, Costco, Limited, Shell, Merck, Starwood, J.C. Penney, and Viacom.

The Commentary:

“Dear CIGAs,

Apparently the catalyst for the strong move higher in gold today was a speech given by Chairman Bernanke in front of the National Press Club this morning. Basically he repeated what we have been saying for what seems like an eternity now – in spite of all the QE and gazillions in liquidity created by those programs, job growth remains anemic:

“It will be several years before the unemployment rate has returned to a more normal level,”

Traders rightly interpreted that to mean QE is still on for the immediate future.

Here is an excerpt from Bloomberg on the story detailing Bernanke’s comments. Click here to read the entire story…

Little Alarm

Fed policy makers are showing little alarm over the rise in food and energy prices. The central bank’s Jan. 26 statement acknowledged rising commodity prices while saying that longer- term inflation expectations were stable and “underlying inflation” was still on the decline.

While prices of some “highly visible” items such as gasoline have “significantly” increased recently, “overall inflation remains quite low” and wage growth has slowed, Bernanke said. “These downward trends in wage and price inflation are not surprising, given the substantial slack in the economy,” Bernanke said.

I am not sure what planet Ben is on but maybe he should take a quick peek at the CCI chart (Continuous Commodity Index) and say that with a straight face. He may be “showing little alarm” but rest assured many of us are showing a great deal of alarm including every person in the US that has an unfortunate habit called eating. This is not to even make mention of the fact that we have governments being toppled on account of soaring food prices. In spite of all the years of watching Central Bankers spin, dodge, weave, obfuscate and outright deceive, I still marvel at their temerity when dealing with the fruits of their own creation.

Back to gold however – an important occurrence took place yesterday.

Open interest finally stopped declining according to the data released by the exchange this morning. Although the increase was minimal, it stopped going down and that is what is so significant. It sure looks as if the wholesale long side liquidation has come to an end. Based on the price action today, that appears to have now been confirmed. Keep in mind we are down to levels of overall hedge fund net long-side exposure last seen when gold was trading at $920. There is no froth whatsoever left in the gold market and without that froth, there is insufficient selling available to take the market lower. That requires more long liquidation and the shorts are not getting any more of it.

Three things occurred technically with today’s nice upside move. The first is that gold has broken out of the coiling pattern shown on the chart to the upside, a bullish development. Secondly, it has now gotten firmly back above the 10 day moving average. As a matter of fact, it ran exactly to the 20 day moving average which served as today’s high. Thirdly, it has also managed to push through a horizontal resistance level near $1350.

The next test for the gold bulls will be whether or not they can recapture $1365. If the bulls can close the market near today’s level or higher tomorrow, they will have pulled off quite a feat for they will have prevented confirming a head and shoulders top pattern on the weekly chart and have sprung a major bear trap.

Further helping matters along is the fact that the HUI went against the tide of a flat to weaker general equities market and moved strongly higher. While it is only Thursday, the developing weekly chart pattern shows a picture of an index that has run towards the 40 week moving average and had a strong bounce up and away from that level. If the HUI could extend today’s gains in tomorrow’s session and close above 530, it would have generated a very nice upside reversal pattern on that chart.

On the daily chart the index has pushed through both the 10 day and the 20 day moving averages and has now turned the shorter 10 day upwards after a decline in that average that has lasted for a solid month. That turns the short term chart pattern back to friendly once again. Now, for the intermediate to turn friendly, the HUI needs to clear the downtrending 40 and 50 day moving averages coming in near 541 and 545 respectively.

The Dollar was higher today which seemed to engender some broader selling in some of the commodity markets. Not sure what all that was about but for the time being it looks more like a bounce in a bear market  with the dollar perhaps trying to put in a short term bottom here. We’ll keep an eye on that.

Bonds moved lower which is a bit of a surprise to me given the general overall tenor of Bernanke’s speech, which I certainly did not view as all that bullish for the economy. As is the case yesterday, they are flirting dangerously close with an important chart support level.”- Dan Norcini, More at JSMineset.com

GATA Posts:

Newmont pays 37% premium to acquire Fronteer Gold

Cash is trash in China as rabbit-themed gold fills 'unbelievable' demand

The Statistics:

Activity from: 2/01/2011

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: No change in Total Tonnes from yesterday’s data.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 110.84: -0.02 change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,400.60: -4.57 change from yesterday’s data.

The Miners:

ITH’s (THM) drill results, Newmont’s (NEM) offer for Fronteer (FRG), Ivanhoe’s (IVN) rights offering, Royal Gold’s (RGLD) second quarter results, Sabina’s (SBB.TO) exploration program, and Silvercorp’s (SVM) closed mine acquisition 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:

Fancamp to Focus on Deeply Buried Targets in James Bay Lowlands - More
- February 03, 2011 | Item | ShareThis

ESO And Uravan Execute Option Agreement - More
- February 03, 2011 | Item | ShareThis

Caribou Announces Financing and Board Change - More
- February 03, 2011 | Item | ShareThis

Coral Provides Update on Robertson Project, Nevada - More
- February 03, 2011 | Item | ShareThis

Harvest Gold Closes a Non-Brokered Financing Raising $1,004,500 - More
- February 03, 2011 | Item | ShareThis

Sabina Gold & Silver Opens Nunavut Camp for Aggressive 2011 Exploration Program - "We are very excited about the aggressive program that we have planned for 2011 to follow up on the tremendous success we had in 2010," said Tony Walsh, President & CEO. "While our resource calculations continue on the new Llama and Umwelt discoveries as well as the Goose deposit, our exploration team is ready to get started on our largest campaign ever. The 2011 program will focus on extending our new gold discoveries on the Goose claim block as well as applying our exploration tool box to look for new gold discoveries on the other Back River and Wishbone targets. Initial drilling should commence on or about March 1 at Goose. Once the Goose camp becomes operational, efforts will shift to opening the Hackett Camp." More
- February 03, 2011 | Item | ShareThis

Initial Leach Analyses Indicate Portage Zone Mineralization Is Amenable to Conventional Leaching at Gold Canyon's Springpole Gold Project - More
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Radius Gold Inc. drills deeper at Banderas property, Guatemala - More
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Laurentian Goldfields Ltd. Announces $2,000,000 Non-Brokered Private Placement - More
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Mansfield Discovers Gold Copper Porphyry System - More
- February 03, 2011 | Item | ShareThis

Colossus Minerals Advises Warrant Holders of Approaching Expiry of Warrants - More
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Trade Winds Reports Assays from Previously Unsampled Core from its Drilling Campaigns - More
- February 03, 2011 | Item | ShareThis

Detour Gold Announces US$105 Million Financing for Mining Fleet - More
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Private Placement of $1.2 Million Completed in DIOS by IAMGOLD - More
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PHI Gold Corporation Subsidiary Cooperates With AXN Group LLC (AXNG) in Asian Mining Projects - More
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Yale Announces Warrant Exercise and Exploration Update - More
- February 03, 2011 | Item | ShareThis

Northquest Ltd. Appoints Vice President Exploration - More
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Mesa Uranium JV Partner Passport Potash Commences Geophysical Survey at Holbrook Potash Project - More
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Sierra Resource Group Appoints Brad Hacker New CFO - More
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Nevado Intersects Significant Iron, Titanium and Vanadium in Diamond Drill Hole FT-10-01 From the Farrell-Taylor Occurrence at the La Blache Property (Quebec) - More
- February 03, 2011 | Item | ShareThis

Diamonds North and MMG Defining Targets-Confirm Budget for Nickel Project - More
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Bolero Acquires the "Charge" REE Prospect in Northern BC - More
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American Bonanza Purchases Jaw Crusher for the Copperstone Gold Mine - More
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Pedro Resources Announcements - More
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Dalradian Intercepts 1.17 Metres of 44.47 g/t of High Grade Gold at Tyrone Project - More
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Baja Appoints Wolf Seidler to Board - More
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Golden Phoenix Joint Venture Partner Scorpio Gold Announces 13,167 Meter Drill Program Has Begun at Mineral Ridge Gold Project in Nevada; Three-Phase Drilling - More
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New Discoveries and Remainder of 2010 Drilling Results Continue Trend of Positive Grade and Thickness Intervals for OJVG's Resource Expansion Program - More
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Aldrin Announces 2011 Yukon Exploration Plan - More
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Silver Falcon Mining, Inc. (SFMI) Releases Its Production Ore Values - More
- February 03, 2011 | Item | ShareThis

Sandspring Presents Drill Results From Holes TPD117-TPD128 at the Toroparu Gold-Copper Deposit and a 350m Deposit Model Extension - More
- February 03, 2011 | Item | ShareThis

African Gold Group, Inc. Discovery of New Gold Zone Located Up to 1.5 km South-East of Main "Zone 1" Deposit Intercepted at Kobada, Mali - More
- February 03, 2011 | Item | ShareThis

TintinaGold Intersects 2.00% Copper, 0.04% Co and 15 g/tonne Ag Over 6.78 Meters Thick Cu-Co-Ag Zone on Its Sheep Creek Property, Montana, USA - More
- February 03, 2011 | Item | ShareThis

Midland Exploration Adds Two Strategic Claim Blocks to its Casault Gold Property East of Detour Lake - More
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1.4 Million oz. Measured/Indicated 800,000 oz. Inferred Gold Resource Announced Near Columbus Gold's Summit Project, Nevada - More
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Cartier Begins Drill Program on Destor-Porcupine Zone - More
- February 03, 2011 | Item | ShareThis

Empire Accelerates Drilling at Bursa Copper-Gold Discovery; Announces Private Placement - More
- February 03, 2011 | Item | ShareThis

Belmont & Dorex Drilling at Bufo Lake Discovers New Gold Zone - More
- February 03, 2011 | Item | ShareThis

Earth Dragon Resources Summarizes Recent Activity and Future Goals - More
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Selwyn Resources Ltd.: Infill Drilling of 93 Lens at XY Central Deposit Confirms High-Grade Mineralization - More
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Avanti Mining Releases NI 43-101 Compliant Technical Report on the Kitsault Molybdenum Project - More
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Energy Fuels Acquires Hollie Claims-Expands Mineral Resources in the San Rafael Project, Emery County Utah - More
- February 03, 2011 | Item | ShareThis

Latin American Minerals Inc. Engages New Investor Relations Consultant - More
- February 03, 2011 | Item | ShareThis

Alderon Commences Winter Drill Program at Kami - More
- February 03, 2011 | Item | ShareThis

Century Mining Reports on 2010 Gold Production and Guidance for 2011 Production - More
- February 03, 2011 | Item | ShareThis

Largo Appoints Tim Mann as Chief Operating Officer - More
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Laurentian Goldfields Ltd. Commences Drilling at Goldpines North Joint Venture - More
- February 03, 2011 | Item | ShareThis

Consolidated Thompson Iron Mines Limited Mails Meeting Materials Following Receipt of Interim Court Order With Respect to Arrangement With Cliffs Natural Res. - More
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Kirrin Resources Confirms 2011 Exploration Plans; Continued Focus on Rare Earth Elements, Uranium and Acquisitions - More
- February 03, 2011 | Item | ShareThis

Alamos Gold Provides Mulatos Exploration Update - More
- February 03, 2011 | Item | ShareThis

Inspiration Mining Identifies Additional Mineralized Zones at Its Langmuir Open Pit Nickel Deposit With 202 Metres of .24% Ni - More
- February 03, 2011 | Item | ShareThis

IBC Advanced Alloys Completes Initial Beryllium Oxide Nuclear Fuel Research - More
- February 03, 2011 | Item | ShareThis

Sunridge Gold Reports More High-Grade Copper Drill Results From Debarwa Deposit, Asmara Project, Eritrea - More
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Goldstone to Begin 2011 Key Lake Drilling Program by February 15 - More
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MDN Confirms That the Niobium-Tantalum Mineralization Extends More Than 400 m South From the Crevier Deposit - More
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Golden Touch Receives Conditional Tsx Venture Exchange Acceptance to Acquisition of Jab Resources Limited ("Jab") - More
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Valentine Lake Joint Venture intersects New High-Grade Lens at Leprechaun Gold Deposit Grading 8.15 g/t Au Uncut Over 20 Metres (TW) in Upper Zone of Deposit - More
- February 03, 2011 | Item | ShareThis

Spartan Gold Ltd. Appoints Former Rio Tinto Senior Executive Mr. Marcus Flis to Chair Newly Formed Advisory Board - More
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Phase 2 Drilling Update, Eastern Extension Property - More
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International Tower Hill Intersects 13.7 Metres of 5.45 g/t Gold in Higher Grade Zone at Depth at the Livengood Project, Alaska - "International Tower Hill Mines Ltd. ("ITH" or the "Company") (TSX:ITH - News)(AMEX:THM - News) is pleased to announce results from the final 27 holes drilled in its 70,000-metre 2010 drill program at the Livengood Gold Project, near Fairbanks, Alaska. Results were highlighted by hole MK-RC-0470 which intersected 13.7 metres of 5.45 g/t gold at a depth of 395 metres, providing further evidence of a new deeper zone of higher grade mineralization directly beneath the existing Money Knob deposit in the southwestern portion of the resource (see Figure 1). These final results will be incorporated into a resource update to be completed in the first quarter of 2011." More
- February 03, 2011 | Item | ShareThis

Newmont Expands Nevada Growth Potential With Acquisition of Fronteer Gold - "Under the Plan of Arrangement, shareholders of Fronteer Gold will receive Cdn$14.00 in cash and one common share in a new company ("Pilot Gold"), which will own certain exploration assets of Fronteer Gold, for each common share of Fronteer Gold. The cash consideration represents a premium of approximately 37% to the closing price of the common shares of Fronteer Gold on the TSX as of February 2, 2011 and equates to a value of approximately Cdn$2.3 billion for Fronteer Gold (excluding Pilot Gold)." More
- February 03, 2011 | Item | ShareThis

Successful Ivanhoe Mines Rights Offering Yields US$1.18 Billion in Gross Proceeds to Advance Construction at Oyu Tolgoi Project - "Ivanhoe Mines (TSX:IVN - News)(NYSE:IVN - News)(NASDAQ:IVN - News) announced today that final, closing results of its strategic rights offering have confirmed that the offering generated US$1.18 billion (CDN$1.17 billion) in gross proceeds to be used to advance development of the Oyu Tolgoi copper-gold project in Mongolia." More
- February 03, 2011 | Item | ShareThis

Royal Gold Reports Record Revenue and Free Cash Flow for Second Quarter Fiscal 2011 - "Royal Gold, Inc. (NASDAQ:RGLD - News) (TSX:RGL.to - News) today announced net income attributable to Royal Gold stockholders of $18.3 million, or $0.33 per basic share, on record royalty revenue of $56.3 million for the second quarter of fiscal 2011. This compares to net income attributable to Royal Gold stockholders for the second quarter of fiscal 2010 of $9.6 million, or $0.24 per basic share, on royalty revenue of $34.7 million." More
- February 03, 2011 | Item | ShareThis

Silvercorp Closes Acquisition of BYP Gold-Lead-Zinc Mine in Hunan Province, China - "Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX:SVM - News)(NYSE:SVM - News) is pleased to announce that it has received the necessary Chinese government approvals, including Chinese military clearance, to acquire a 70% equity interest in Yunxiang Mining Co. Ltd. ("Yunxiang"), a private mining company in Hunan Province, China. Yunxiang's primary asset is the BYP Gold-Lead-Zinc mine (the "BYP mine"), located 220 km, or a 3 hour drive, southwest of Changsha, the capital city of Hunan Province, China. The BYP mine has a mining permit covering 3.67 km2, a safety production permit, and a 400 tonne per day ("t/d") floatation mill. As a result of this acquisition, Yunxiang is now converted into a Sino-Foreign joint venture company and Silvercorp has now taken over the control of Yunxiang." More
- February 03, 2011 | Item | ShareThis

- Chris Mullen, Gold Seeker Report

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