Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 2% and 7% on the Week

Please Note: U.S. markets are closed on Monday in observance of Presidents Day. Canadian Markets will also be closed for a variety of different holidays, depending on which province one is in.

	Close	Gain/Loss	On Week
Gold	$1387.90	+$4.20	+2.07%
Silver	$32.39	+$0.87	+7.79%
XAU	212.45	-0.05%	+4.28%
HUI	554.01	+0.90%	+5.84%
GDM	1638.23	+1.10%	+6.06%
JSE Gold	2752.36	+43.94	+4.09%
USD	77.65	-0.34	-1.01%
Euro	136.87	+0.80	+1.04%
Yen	120.38	+0.35	+0.48%
Oil	$86.20	-$0.16	+0.72%
10-Year	3.589%	+0.015	-1.56%
Bond	119.21875	-0.21875	+0.69%
Dow	12391.25	+0.59%	+0.96%
Nasdaq	2833.95	+0.08%	+0.87%
S&P	1343.01	+0.19%	+1.04%

Gold climbed $4.69 to $1388.39 in Asia before it fell back to $1381.25 in London, but it then climbed to a new session high of $1391.75 in New York and ended with a gain of 0.3%. Silver saw modest gains in Asia and London before it accelerated markedly higher in New York and ended near its late session high of $32.86 with a gain of 2.76% at a new 30-year high.

Euro gold fell to about €1014, platinum lost $8.75 to $1830, and copper remained at about $4.48.

Gold and silver equities rose about 2% by early afternoon, but they then fell back off into the close and ended with only slight gains.

Next week’s economic highlights include the Case-Shiller 20-city Index and Consumer Confidence on Tuesday, Existing Home Sales on Wednesday, Initial Jobless Claims, Durable Goods Orders, and New Home Sales on Thursday, and GDP and Michigan Sentiment on Friday.

Oil held steady on continued tensions in the Middle East that sent the U.S. dollar index lower again. The euro rose on increased expectations for an interest rate hike by the European Central Bank.

Among the big names making news in the market Friday were Caterpillar, Discover, JPMorgan, TomTom, Campbell, Lennar, and Time.

“There is so much to write about today that it is difficult to pick a place from which to get things rolling.

We will start with the grey metal – attempting to describe what is occurring with silver is like attempting to describe a sunset over the Pacific – it is breathtaking. This market is blowing through upside resistance levels as if they did not exist. I cannot confirm this as of yet because the open interest is not currently reflecting it, but this has all the look and smell of a large short in some very serious trouble with a pack of wolves slashing at its throat. The sheer speed and angle of its ascent is indicative of a panic among the short sellers. Apparently some large entities are going for the jugular here and from the looks of it, they have succeeded. This might indeed be the very long awaited Commercial Signal Failure that some have been predicting for many years now. We will know shortly if that is indeed the case. If so, this market will go vertical.

One thing that happens when a large short or number of short sellers end up getting trapped - they are all desperate to get out and will pounce on any offers that might hit the pit that are large enough in size for them to exit as many contracts as possible in the shortest time possible. When the sharks see that, they begin to compete with the shorts and will go for the bids also, forcing the price higher and making it more and more difficult for the shorts to extract themselves from their losing positions without having to pay up. Simply put – the pit takes no prisoners and there are no such things as friends in the pit. It is a ruthless business.

In attempting to project some potential resistance levels on the silver chart we are pretty much in new territory. I am one of those guys which while I study the long term price charts in an attempt to decipher levels where selling or buying might surface, also realizes that when you are talking about going back in time for more than 30 years, a large amount of those who might have been making the market in silver at that time, are either no longer trading in size or might even possibly be dead! In other words, I am just saying that I am not sure how relevant resistance levels from 30 years ago might be in today’s world.

That being said, it looks to be like silver could have a bit of resistance show up near the $33.20 - $33.30 level. If that gives way, it then runs to $33.50. If the trapped shorts really begin to get squeezed, then $33.50 will also not hold and will promptly give way. I will be going through the COT reports this afternoon to see where we are in the size of the short position from the Commercial and Swap Dealer category to get a better feel for all of this.

Open interest is slowly but surely moving back up again in gold announcing the return of the specs to the long side, precisely the medicine this market needs. They are looking over at silver and seeing its strength and are moving into gold. Their return is behind the ability of the yellow metal to punch through the $1380 - $1382 level. It now looks on a firm footing with the setup to make a run towards $1400.

Downside support in gold now lies first back near $1380 and down a bit from there near $1365.

The HUI is very strong today, gapping up on the open and not looking back since. It looks very strong on both the daily and the weekly charts with the index solidly above all major moving averages and those all either moving higher or in the process of turning higher indicating a trending move is underway. Bulls will try to take the shares high enough to push the index into the 570 level. I would expect to see a bit of selling there. If not, the shares are going to move high enough to take the index through 580 and put it in a position to make another try at the 590 – 600 region.

On the rest of the commodity front – the Brent / WTI crude spread reversed today and is currently near $15.75 with both markets moving higher. Brent does not seem to want to move below $100 and WTI seems to have found a floor at $84. What I find very noteworthy is the push higher by gasoline today which has continued to make new 29 month highs time after time this week. It certainly looks to be getting ready to put in a very firm close on the weekly charts and if it holds its gains for another week or so, on the monthly chart as well. On that chart, it will have registered a breakout to the upside. Based on what the futures markets are telling us, consumers had better get ready for an expensive driving season this year.

More and more we are getting reports about monetary officials from various parts of the globe expressing growing concern over the relentless rise in commodity prices, specifically food prices. That engenders chatter about the need to raise rates. Here is the problem for those monetary officials in the West – they need to hike rates if they are going to dry up the liquidity that is sloshing around the planet and making its way into the food markets. However, they cannot seem to hike rates because the “recovery” is still too fragile. So they basically sit and do nothing. Meanwhile, inflationary pressures continue to build in an environment of ultra low interest rates creating the perfect environment for gold in which to thrive.

Equities – well they do not care about anything except for all the funny money that is being created by the Federal Reserve – not the sheer overwhelming amount of debt that is swamping the US, not the protesters in the streets in Wisconsin, not the protests that are spreading to other states such as Ohio, not the fact that these protests are due to the fact that the states are out of money, not the fact that even the Fed officials are telling us that the labor markets are going to be stuck with mediocre growth for as far out as a minimum of 5 years and not the fact that the commodity markets continue moving sharply higher pushing input costs up for business across the board, etc. Nope – nothing matters except the punch bowl. “Drink up me hearties” as Jack Sparrow might say.

Along that line, China was once again forced to hike bank reserve ratio requirements in an attempt to cool down their overheating real estate market. I get the visual picture of a guy standing with a garden hose shooting water onto his house which is engulfed in flames whenever I see the battle that they are having over there with inflation. Negative rates of return on savings, a direct result of this roaring inflation, is what keeps feeding gold demand from China.

Bonds finally moved lower today in the face of a stronger equity market, but even at that, they have not fallen apart yet. Apparently there is enough Fed related buying coming in that the bears cannot pull the rug out from under that market for the time being. You can see it day after day by watching this market trade tick for tick. In come the bids every time it looks as if it is ready to break down. Even at that, this is a market living on borrowed time which is going to break down as the year progresses. How much newly created money the Fed is going to waste on propping it up we will wait until they are done to calculate.

This is also the reason I have no patience for those who claim that any of us who believe that the US monetary authorities are constantly manipulating and interfering in the markets, particularly in the gold market, are a bunch of nuts. For crying out loud – they are publicly manipulating the bond market in the face of the entire world to behold! Oh but that’s the bonds – gold doesn’t count. Yep – that takes care of that argument now doesn’t it? Imagine Chairman Ben sitting in front of the Congress testifying with a straight face that there is no inflation problem with a gold price over $1500!”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

COMEX Gold Trust (IAU) Total Tonnes in Trust: 115.73:+4.07 change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,438.56:+27.33 change from yesterday’s data.

NovaGold’s (NG) new CFO, US Gold’s (UXG) stock offering pricing, Eldorado’s (EGO) fourth quarter results, Gold Fields’ (GFI) quarterly results, and Avino’s (ASM.V) bulk sample update and drill program 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.

Huldra Silver Inc.: Issuance of Options - More
- February 18, 2011 | Item | ShareThis

Millstream Reports a Change to its Board of Directors - More
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Champion Minerals Announces Change to Board of Directors - More
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Queenston Extends Expiry Date of Warrants - More
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NovaGold Appoints Elaine Sanders as Chief Financial Officer - "Elaine has been an integral part of NovaGold's senior team since 2003," said Rick Van Nieuwenhuyse, President & CEO of NovaGold. "Her leadership and financial expertise will ensure NovaGold continues to meet the highest standards for corporate governance and financial disclosure as we grow the company and advance our projects toward our goal of being a low-cost million-ounce-a-year gold producer." More
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Rio Alto Announces the Departure of Feisal Somji - More
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Excalibur Receives Acceptance of Additional Sturgeon Lake Staking - More
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Quantum Expands IR Network - More
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Tres-Or Drilling Update at Advanced Duvay Gold Project, Quebec - More
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Asia Now Retains New Investor Relations Services Consultant and Announces Grant of Stock Options and Amendment to Its Stock Option Plan - More
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Tuffnell Ltd. Announces Geophysics Details of Phase II Exploration at the Little Butte Gold/Copper Project in Arizona, Confirming Mineralized Structures - More
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Great Quest Metals Ltd.: Arrete de la Miniere Permits Received for the Tilemsi Phosphate Concessions - More
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Laurentian Goldfields Ltd. Increases Non-Brokered Private Placement - More
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Greystar Resources Announces Information Hearing on the Angostura Project Was Held in Bucaramanga, Santander, Colombia - More
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Creso Begins Drilling the Tyranite Mine Zone at the Shining Tree Project - More
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North American Palladium Completes C$22 Million Flow-Through Financing - More
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Prophecy Achieves Over 95% Nickel Recovery in Preliminary Results From Lynn Lake Bioleach Study by Mintek - More
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Aguila American Completes Work Program on Peru Gold Project - More
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Eurasian Minerals Inc. and Antofagasta Minerals S.A. Sign Joint Venture and Regional Strategic Alliance Agreements for Copper Exploration in Sweden - More
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Ryan Gold Announces the Appointment of Ian Gendall as Vice President-Exploration - More
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High River Provides an Update on the Bankruptcy Procedures of Prognoz Silver LLC - More
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Chalice Advances Discussions on ENAMCO's Acquisition of 30% of the Zara Project - More
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Valentine Lake JV Continues to Drill Multiple New High Grade Intercepts at the Leprechaun Gold Deposit in Central Newfoundland - More
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HudBay Minerals Acquires 6,667,000 Shares of VMS Ventures Inc. - More
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Timmins Gold Announces Initial Drill Results From the Norma Gold Property - More
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Avino Provides Update on San Gonzalo Bulk Sample and 2011 Drill Program - "Avino Silver & Gold Mines Ltd. (TSX VENTURE:ASM - News; OTCBB:ASGMF - News; BERLIN:GV6 - News; FRANKFURT:GV6 - News) is pleased to announce that processing of the San Gonzalo bulk sample began on January 18, 2011. The monthly totals to February 11th, were 1550 tonnes milled for production of 47 tonnes of concentrate grading 8.4 kg/t silver. Average month to date silver feed grade for February was 329 g/t at 77% recovery. This feed grade result is similar to the estimated resource grade of 332 g/t in the NI 43-101 report by Orequest 2009. Gold results are pending from the accredited lab of SGS in Durango, Mexico. Silver assays are from the on-site laboratory using aqua regia digestion followed by AA spectroscopy. Weekly check samples for silver and gold are sent to SGS, Durango." More
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US Gold Announces Pricing of Common Stock Offering - "US GOLD CORPORATION (NYSE:UXG - News)(TSX:UXG - News) (the "Company" or "US Gold"), an exploration company focused on gold and silver in the United States and Mexico, announced today the pricing of its previously announced underwritten offering in the United States and Canada of 15 million shares of common stock at a price to the public of $6.50 per share (the "Offering Price") for aggregate proceeds of US$97.5 million (the "Offering"). The Company has also granted the underwriters an option to purchase up to 2.25 million additional share of Common Stock at the Offering Price within 30 days following the closing of the Offering to cover over-allotments, if any." More
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Eldorado Gold Corporation: Q4, 2010 Financial and Operating Results-Earnings Increased 31%; Cash Flow Increased 40% - "Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation ("Eldorado" the "Company" or "we") (TSX:ELD - News)(NYSE:EGO - News)(ASX:EAU - News), is pleased to report on the Company's financial and operational results for the fourth quarter ended December 31, 2010. The Company reported net income of $43.6 million, or $0.08 per share, and cash flow from operations of $83.0 million or $0.15 per share for the fourth quarter ended December 31, 2010." More
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Gold Fields Limited : A Steady Quarter With Improved Margins - "Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) today announced net earnings excluding gains and losses on foreign exchange, non- recurring items and share of gain or loss of associates after royalties and taxation for the December 2010 quarter of R1,475 million compared with earnings of R1,016 million and R1,022 million in the September 2010 and December 2009 quarters respectively. In US dollar terms net earnings excluding gains and losses on foreign exchange, non-recurring items and share of gain or loss of associates after royalties and taxation for the December 2010 quarter were US$211 million, compared with earnings of US$138 million and US$135 million for the September 2010 and December 2009 quarters respectively. A net loss of R777 million (US$106 million) was incurred due to the cost of a number of empowerment transactions completed in the quarter." More
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