-- Posted 8 February, 2011 | | Source: SilverSeek.com

The Metals:

Gold rose about $10 in Asia before it fell back to almost unchanged at $1348.30 by a little before 8AM EST, but it then popped to $1365.09 in the first 15 minutes of trade in New York and continued to as high as $1368.05 before it closed with a gain of 1.17%.  Silver rose over 1% in Asia before it fell to see a $0.033 loss at $29.267 in London, but it also soared back higher in New York and ended near its last minute high of $30.283 with a gain of 3.1%.

Euro gold rose to about €999, platinum gained $13 to $1853.50, and copper remained at about $4.57.

Gold and silver equities rose about 2% by midday and remained near that level for the rest of the day.

The Economy:

Fed's Lockhart says inflation still too low  Reuters

Job Openings in U.S. Fall to Three-Month Low in Sign Recovery to Take Time  Bloomberg

Small Business Optimism Hits 3-Year High in January  Yahoo

Obama to call for $53B for high-speed rail  Yahoo

Lacker says better economy requires Fed to rethink  Reuters

There were no major economic reports today and there are none due out tomorrow, but Bernanke will be testifying before the House Budget Committee at 10AM and Ron Paul will host a monetary policy hearing to examine the impact of Federal Reserve policies on job creation and the unemployment rate at 10AM as well.

The Markets:

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

Oil fell in early trade on China’s interest rate hike, but a weaker dollar seemed to limit losses.

The U.S. dollar index fell on the continued easing of tensions in Egypt that encouraged traders to put cash to work in higher yielding assets.

Treasuries turned lower after today’s auction of $32 billion in 3-year notes sold at a high yield of 1.349% with a bid to cover of 3.01.

The Dow, Nasdaq, and S&P found modest gains on decent earnings reports.

Among the big names making news in the market today were UBS, Toyota, McDonald’s, Microsoft, Chrysler, and Citigroup.

The Commentary:

“Dear CIGAs,

Today’s big news once again came out of China, which announced yet another rate increase in what has now been a series of hikes over the last several months. In what has to be a significant development, gold, which initially dipped lower upon the news, ricocheted higher, surging through overhead resistance just above the $1350 level. It appeared that a series of buy stops were set off which then allowed price to run into the next resistance zone centered around the $1365 level.

What I find so noteworthy about today’s performance in gold is that it also mirrored what was taking place to a greater extent across the entire commodity complex. If anything, gold took on a leadership role along with silver. You might recall that in the past, these rate hikes by China have brought in extremely heavy selling in commodities as the prevailing sentiment at those times has been that any attempt by China to rein in its inflation stallion was going to result in a slowdown in what has been the main driver of the global economic engine. That would lead to a global slowdown which would pressure commodity prices.

Copper in particular would get hit hard during such episodes due mainly to its historic role as a leader in the overall commodity sector. Today, copper did what it has done in the past – it moved sharply lower but then it too rebounded and while it did not make it back into positive territory, it came back well off of its lows working back to nearly unchanged at one point.

The same pattern was seen in the grains and in the meats, which were also lower overnight as the news came down the wires but those too came back off their worst levels thanks also to some help from wheat (more about that later).

Why I want to bring this to your attention is that we might indeed be seeing another one of those frequent shifts in trader/investment psychology which makes markets so interesting and fresh. To see market action like this tells me that an inflation psychology is beginning to become more entrenched in the minds of global investors who are slowly coming to realize that the Central Banks are well behind the inflation curve. I think it is also safe to say, based on the price action across these various markets, that the deflation boogeyman is losing his allies.

Perhaps this is what has been foretold in the bond market’s breakdown of last Friday. Were it not for the continued meddling by the US monetary authorities in that bond market ( they euphemistically term it “Quantitative Easing ), I suspect that the bonds would have been sharply lower today as well. Inflation is raging across Asia and in many places in Latin America and it is just a matter of time before even the worst skeptic is going to be forced into acknowledging the obvious – that it is coming to a movie theater near you. Certainly a plunging US Dollar is not synonymous with deflationary pressures!

Which brings me to the US Dollar – in yet a further development certain to rekindle investor suspicions concerning the “health” of this economic recovery, news came out of Denmark, that Amagerbanken, the nation’s eighth largest bank in terms of lending, was toppled due to a series of failed real estate related loans. The Danish government is now on the hook for $2.8 billion worth of losses.

News like this tends to remind those who are looking through rose-colored glasses, that beneath the apparent tranquil surface there still lurks issues that have been essentially plastered over with money printing. This sort of thing is what brings buying into gold across a wide assortment of various currencies as investors become fearful of the erosion of the value of their currencies. It did not help the Dollar any for the current Chairman of the Federal Reserve to be out leading the cheerleading squad to warn the Republicans that they had better not mess with NOT RAISING the debt ceiling from its current cap of $14.3 TRILLION.

I can see it now – Ben is dressed in a cheerleader’s costume with pom-poms:

2 bits,

4 bits,

6 bits a dollar,

All for raising the debt ceiling,

Stand up and HOLLER…..

Yea…

I find Ben’s comments particular obscene seeing that the mass of the nation is seriously worried about the US debt level. The recent election blowout was due in large part of concerns over the economy and rising levels of national indebtedness and here we are treated to the pathetic spectacle of what should be a beacon of frugality and responsibility thinking he is leading the charge in some sort of economic war:

Admiral Ben Farragut:

“Damn the torpedos – full speed ahead”.

To show you that it is not just the dollar that is a concern, the euro fell against gold. Gold, when priced in Euro terms, moved higher coming in at €999.707 at the PM Fix but actually trading above the €1,000 mark at one point during the session.

The technical posture of gold just got a tremendous boost with today’s good showing. Both the 10 day and the 20 day moving averages have now turned higher and momentum has now broken the downtrend line that has been in place for the last two months. What is now needed to put some icing on the cake is for momentum to move into positive territory. This will further encourage traders to Buy dips rather than Sell rallies.

Open interest stabilizing down near 466,000 seems to have done the trick for gold as the failure of the longs to liquidate in any further size has short circuited the bears’ attempts to break it down below $1320. All of those shorts slammed on below $1320 in anticipation of another move lower were snared by Chinese buying and are now taking their medicine as those positions are all deeply underwater. Only the strong handed shorts can handle that sort of loss.

A quick comment about silver – those of you who have been tuning in to my weekly radio interviews with Eric King over at King World News have heard us discuss its technical price chart. I am still watching for a strong close above the $30 level for a sign that this market is ready to kick up another leg higher. One can see the action of the Bears attempting to hold it down below this level by watching the 3 minute bar chart, as they realize what such a close would mean to their positions. Going into the close, it is apparent that they failed. If silver can stay above $30 the rest of the day, odds now favor a test of the recent high in short order. Keep in mind, as we discussed on our recent radio interview, the COT report shows that last week the hedge funds (managed money) finally began increasing their net long exposure after having whittled that down for the last couple of months. They are now returning to this market and doing so from a sharply reduced long side exposure. There is plenty of room available for them to begin piling back in and that is what leads me to believe that the recent high is going to fall. Also, a lot of guys sitting on the sideline waiting for silver prices to move lower so that they could buy are now realizing that they had better get in. That is what buying does – it begets more buying.

On the food front, wheat, notched yet another 30 month high as it moves ever closer to the $9.00 mark. It seems like just yesterday when we were talking about watching for wheat to make a run towards the $8.00 level! The impetus for its move higher today was news out of China (not about rate hikes) that severe drought could be affected as much as 37% of its entire wheat crop. Great goggly moogly – the news on the food front just keeps getting worse with each passing week it seems.

Platinum and palladium were both strong today.

Please take a bit of time to stop by my developing blog site at www.traderdannorcini.blogspot.com. I will be posting some comments on the HUI and some technical charts later in the day there.

Bonds are beginning to give up their artificial gains as I finish this commentary up. We will see how they fare going into the close this afternoon.”- Dan Norcini, More at JSMineset.com

GATA Posts:

Central banks must act against rising commodity prices, Lux central banker says

Alasdair Macleod: Why technical analysis fails with gold

Murray Pollitt: World would benefit from a higher gold price

The Statistics:

Activity from: 2/07/2011

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 - No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,370.22 - No change from yesterday’s data.

The Miners:

SEMAFO’s (SMF.TO) plant expansion, Exeter’s (XRA) water rights, Timberline’s (TLR) drill results, Richmont’s (RIC) drill results, Seabridge’s (SA) mineral resource model, Revett’s (RVM.TO) 2010 summary, and Silvermex’s (SLX.TO) corporate update and 2011 budget 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:

Nevada Geothermal Power Inc. to Present and Take Part in a Private Press Event at GEA Geothermal Energy Finance Forum 2011 - More
- February 08, 2011 | Item | ShareThis

Calibre Receives $1,398,750 from Warrant Exercise - More
- February 08, 2011 | Item | ShareThis

Golden Reign Resources Ltd.: Board of Director Appointment & Grant of Stock Options - More
- February 08, 2011 | Item | ShareThis

Coro Announces 170 Meters at 0.63% Copper From Drilling Program at Chacay Property and Exercise of Warrants - More
- February 08, 2011 | Item | ShareThis

Explor Starts Drilling Kidd Township Property - More
- February 08, 2011 | Item | ShareThis

Nemaska Exploration Reports Wide High Grade Channel Samples From Whabouchi Lithium Project - More
- February 08, 2011 | Item | ShareThis

Crocodile Gold Announces Initial Uranium Resource Estimate at Thunderball Completed by JV Partner Thundelarra - More
- February 08, 2011 | Item | ShareThis

Sulliden Appoints Don Dudek to Its Board of Directors - More
- February 08, 2011 | Item | ShareThis

Puget Ventures Announces the Appointment of Igor Kovarsky as Executive Vice President of Puget Ventures/Global Cobalt Corp. - More
- February 08, 2011 | Item | ShareThis

Malbex Reports 8 Metres at 7.08 g/t Gold and 11.6 g/t Silver and 86 Metres at 0.77 g/t Gold and 9.34 g/t Silver From Del Carmen Norte - More
- February 08, 2011 | Item | ShareThis

Valterra Drills 14.47 g/t Au & 34.60 g/t Ag over 4.0m in New Zone at Star Project - More
- February 08, 2011 | Item | ShareThis

Orex Announces New Drilling Campaign at Goldboro - More
- February 08, 2011 | Item | ShareThis

Velocity Minerals Ltd. Announces Geochemical Survey Results at Orogrande - More
- February 08, 2011 | Item | ShareThis

Western Copper to Trade on the NYSE Amex - More
- February 08, 2011 | Item | ShareThis

TerraX resumes soil sampling and line cutting at Stewart Property, Newfoundland along 6 km alteration trend, following up on 725 meter gold in soil anomaly - More
- February 08, 2011 | Item | ShareThis

Sphere Resources Inc. Commencement of 2011 Exploration Program on the Expanded Dome Property in Red Lake District, Ontario and Acquisition of Further Claim - More
- February 08, 2011 | Item | ShareThis

Auriga Gold Withdraws Preliminary Prospectus; Shares and Warrants Have Been Distributed - More
- February 08, 2011 | Item | ShareThis

Earth Dragon Resources Announces Initial Gold Deposit Assay Results From Ghana - More
- February 08, 2011 | Item | ShareThis

SEMAFO to Augment Mana Plant Capacity - "SEMAFO (TSX:SMF - News) today announced a fourth phase of plant expansion at its Mana Mine in Burkina Faso. As a result, plant capacity is expected to attain up to 7,200 tonnes per day ("tpd") in bedrock and up to 8,000 tpd in blended ore. Completion of phase four will increase throughput by 1,200 tpd, representing an additional 26,000 to 30,000 ounces of gold annually when compared to current plant capacity." More
- February 08, 2011 | Item | ShareThis

Red Pine Drilling Results Advance SaraCourt Exploration - More
- February 08, 2011 | Item | ShareThis

Colorado Rare Earths Inc. Appoints Harvey Kaye and Daniel McGroarty to Board of Directors - More
- February 08, 2011 | Item | ShareThis

GoldQuest Announces the Appointment of Julio Esplaillat as President & CEO - More
- February 08, 2011 | Item | ShareThis

Gold Standard Mining Corp. Announces Results of 2010 Gold Production - More
- February 08, 2011 | Item | ShareThis

Ventana Provides Additional Drill Results and Corporate Update - More
- February 08, 2011 | Item | ShareThis

Athabasca Uranium Acquires Strategic East Key Lake Option - More
- February 08, 2011 | Item | ShareThis

Rye Patch Gold Drills Thick Zones of Gold and Silver at Gold Ridge - More
- February 08, 2011 | Item | ShareThis

Central Resources Reports Final 2010 Geochemical Results and Stakes Additional Ground at Selwyn Creek Project, White Gold District, Yukon - More
- February 08, 2011 | Item | ShareThis

Soldi Ventures Inc. Plans to Drill Up to 2,500 Meters This Winter on Phase One of Its Drilling Program - More
- February 08, 2011 | Item | ShareThis

Integra Gold Corp Intersects 31.2 g/t Gold Over 1.4 Meters and 19.4 g/t Over 2.9 Meters at Forestel Zone - More
- February 08, 2011 | Item | ShareThis

Midland Exploration and JOGMEC's Ground Geophysical Survey Reveals the Presence of Several New Rare Earth Targets on the Ytterby Project, South of Strange Lake - More
- February 08, 2011 | Item | ShareThis

Cavan Ventures Inc. Announces Non-Brokered Private Placement - More
- February 08, 2011 | Item | ShareThis

EurOmax Reports 2.1 Million Ounces Gold Initial Resource Estimate for Logo Prospect, Trun Project, Bulgaria - More
- February 08, 2011 | Item | ShareThis

Magellan Minerals Drills 7.5m @ 18.83g/t Gold at Moreira Gomes, Cuiu Cuiu - More
- February 08, 2011 | Item | ShareThis

Grayd Reports Expansion of Tarachi Mineralization - More
- February 08, 2011 | Item | ShareThis

10,000 Metres of Drilling Recommended for Treaty Creek Property - More
- February 08, 2011 | Item | ShareThis

Adex Reports Initial High Grade Drill Results at Mount Pleasant - More
- February 08, 2011 | Item | ShareThis

Crosshair Provides Update on CMB Joint Venture Project - More
- February 08, 2011 | Item | ShareThis

Yorbeau Initiates 2011 Drilling Program - More
- February 08, 2011 | Item | ShareThis

Standard & Poor's Initiates Factual Stock Report Coverage on Midlands - More
- February 08, 2011 | Item | ShareThis

Premium Exploration Drills Third Discovery at Idaho Gold Project: 2.1 g/t Gold Over 20.1 Meters - More
- February 08, 2011 | Item | ShareThis

Cream Minerals Initiates 10,000 Metre Drill Program at the Nuevo Milenio Silver-Gold Project - More
- February 08, 2011 | Item | ShareThis

Richfield drills 72 m @ 1.69 g/t Au; 183 m @ 1.03 g/t Au; 206 m @ 1.56 g/t Au; 72 m @1.3 g/t Au; 91 m @ 1.07 g/t Au - More
- February 08, 2011 | Item | ShareThis

Lithium Corporation Initiates Drill Permitting at Cortez Lithium Prospect - More
- February 08, 2011 | Item | ShareThis

American Lithium Minerals Releases Initial Drill Results for the Borate Hills Project - More
- February 08, 2011 | Item | ShareThis

Trelawney Intersects 243.10 Metres of 1.31 g/t Gold at the Cote Lake Deposit - More
- February 08, 2011 | Item | ShareThis

First Liberty Power Corp to Focus Exclusively on Lithium Development - More
- February 08, 2011 | Item | ShareThis

Alderon Intersects 29% Iron Over 608 Meters - More
- February 08, 2011 | Item | ShareThis

Purepoint Stakes Projects Adjacent to Red Willow Project in Athabasca Basin - More
- February 08, 2011 | Item | ShareThis

Yankee Hat Confirms Extention of Gold Mineralization and Intersects 6.47 g/t Gold Over 2.43 Meters at the Fran Property - More
- February 08, 2011 | Item | ShareThis

Nevada Copper Updates Feasibility Study Progress - More
- February 08, 2011 | Item | ShareThis

General Metals Corporation President Provides Update on Independence Project Status - More
- February 08, 2011 | Item | ShareThis

Pitchstone Drills Calcrete Uranium in Namibia - More
- February 08, 2011 | Item | ShareThis

Selwyn Resources Announces Teleconference on Acquisition of ScoZinc Limited - More
- February 08, 2011 | Item | ShareThis

Colorado Goldfields Inc. Announces Agreement With State of Colorado's DRMS for Pride of the West Mill - More
- February 08, 2011 | Item | ShareThis

Selwyn Acquires ScoZinc Limited - More
- February 08, 2011 | Item | ShareThis

Willow Creek Completes Acquisition of Nevada Property - More
- February 08, 2011 | Item | ShareThis

Timmins Gold Corp.: 10.67 Meters of 7.51 gpt Gold Intersected in Ongoing Drill Program Which Continues to Extend and Expand Mineralized Zones at San Francisco - More
- February 08, 2011 | Item | ShareThis

Canaco Initiates Phase 1 Drill Program on the Handeni Gold Trend in Tanzania - More
- February 08, 2011 | Item | ShareThis

Aquila Reports Eight Meters of 18.57 Grams Per Tonne Gold from the Peninsula Gold Prospect - More
- February 08, 2011 | Item | ShareThis

CanAlaska Uranium Ltd. - Cree East Uranium Joint Venture Commences Drilling - More
- February 08, 2011 | Item | ShareThis

Salazar Intersects 28 m of 2 g/t Gold & 5% Copper at High-Grade El Domo VMS Deposit - More
- February 08, 2011 | Item | ShareThis

GGG Resources plc (the "Company" or "GGG") Bullabulling Gold Project-February Project Update - More
- February 08, 2011 | Item | ShareThis

Revett Provides Summary of 2010 Operations and Year End Reserves - "2010 has proven to be a pivotal year as our operations at Troy have provided significant cash flow and our development efforts have opened up new mining areas and identified further near term exploration targets. As we focus on realizing the full potential of the Troy Mine, meeting our 2011 production targets and advancing the Rock Creek project, we remain committed to the safety of our employees, the communities where we operate and responsible mineral development above all else." More
- February 08, 2011 | Item | ShareThis

Silvermex Resources Corporate Update and 2011 Budget - "Silvermex Resources Inc. ("Silvermex") (TSX:SLX - News) - Silvermex experienced remarkable growth in 2010. The last 12 months has seen Silvermex advance from a junior explorer to a silver and gold producer with tremendous growth potential of both mineral resources and production levels. The Company's market capitalization has grown over 800% from CA$24.5 million in January 2010, to the current market capitalization of $195 million." More
- February 08, 2011 | Item | ShareThis

Exeter Secures Option to Purchase Water Rights for the Caspiche Gold-Copper Project in Chile - "Exeter Resource Corporation (TSX:XRC - News)(AMEX:XRA - News)(Frankfurt:EXB - News) ("Exeter" or the "Company") is pleased to announce that it has optioned water rights to a total volume of 300 litres per second from a private Chilean company. The rights relate to surface water flows and are consumptive in nature. The option agreement provides for staged payments deductible from a purchase price of US$15 million. The Company can withdraw from the option at any time without penalty." More
- February 08, 2011 | Item | ShareThis

Timberline Drills 71.6 Metres of 1.22 Grams of Gold per Tonne at Lookout Mountain - "Timberline Resources Corporation (TSX-V:TBR - News)(AMEX:TLR - News) ("Timberline" or the "Company") is pleased to report continued favorable assay and gold recovery results from drilling at its Lookout Mountain Gold Project along the Battle Mountain - Eureka Trend of central Nevada. Results included several ore-grade intercepts with excellent recoveries of oxide gold mineralization, including Hole BHSE-062 which returned 1.22 grams per tonne (g/t) (0.036 ounces per ton (opt)) over 71.6 metres (235 feet) with 92.0-percent recovery." More
- February 08, 2011 | Item | ShareThis

Richmont Mines Inc.: Final 2010 Drilling Results Confirm Strong Gold Potential of the Wasamac Property - "We are very pleased with the results obtained from our 2010 drilling program as they confirm the existence of a strong mineralized system between the -200 and -800 metre elevations that remains open at depth in several areas over a lateral extension of 2 km. Now that the final results have been received, our geology team is actively working on the re-evaluation of the resources of the Wasamac property. At the same time, drilling continues with three drills currently active on the property". More
- February 08, 2011 | Item | ShareThis

Seabridge Reports Major New Gold/Copper Resource at KSM's Iron Cap Zone - "An independent mineral resource model for Seabridge Gold's (TSX:SEA - News)(AMEX:SA - News) Iron Cap Zone at its 100% owned KSM project estimates a new indicated resource containing 5.1 million ounces of gold and 1.7 billion pounds of copper immediately adjacent to the Mitchell deposit. The indicated resource is flanked by a halo of inferred resources containing an additional 3.4 million ounces of gold and 1.3 billion pounds of copper. The Iron Cap resource estimate was prepared by Resource Modeling Inc. ("RMI") of Stites, Idaho and will be incorporated into an updated Preliminary Feasibility Study ("PFS") scheduled for completion in April 2011." More
- February 08, 2011 | Item | ShareThis

- Chris Mullen, Gold Seeker Report

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