Gold Seeker Closing Report: Gold and Silver End Slightly Higher

	Close	Gain/Loss
Gold	$1454.20	+$1.10
Silver	$40.27	+$0.18
XAU	216.67	-0.95%
HUI	578.25	-0.45%
GDM	1689.26	-0.30%
JSE Gold	2797.18	+26.16
USD	74.96	+0.07
Euro	144.39	-0.38
Yen	119.41	-0.11
Oil	$107.11	+$0.86
10-Year	3.466%	-0.034
T-Bond	119.8125	+0.46875
Dow	12270.99	+0.06%
Nasdaq	2761.52	+0.61%
S&P	1314.41	+0.02%

Gold climbed $9.05 to $1462.15 at about 9AM EST before it dropped back to $1451.14 by early afternoon in New York, but it still ended with a gain of 0.08%. Silver surged to as high as $40.743 before it fell back to $40.085, but it then bounced back higher in late trade and ended with a gain of 0.45%.

Euro gold rose to about €1007, platinum gained $3 to $1770, and copper fell 9 cents to about $4.29.

Gold and silver equities saw slight gains for most of the morning, but they then turned lower midday and ended with modest losses.

Report	For	Reading	Expected	Previous
Retail Sales	Mar	0.4%	0.5%	1.1%
Retail Sales ex-auto	Mar	0.8%	0.7%	1.1%
Business Inventories	Feb	0.5%	0.8%	1.0%

“The Federal Reserve said the economy expanded at a “moderate” pace across much of the U.S. in February and March, led by manufacturing, with labor markets showing improvements in most regions.”

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 4/09 expected at 385,000 and PPI for March expected at 1.1%. Core PPI is expected at 0.2%.

Oil rose after the Energy Information Administration reported that crude inventories rose 1.6 million barrels, gasoline inventories fell 7.0 million barrels, and distillates fell 2.7 million barrels.

The U.S. dollar index found slight gains after the release of the fed’s Beige Book.

Treasuries remained higher after today’s $21 billion 10-year note auction sold at a high yield of 3.494% with a bid to cover of 3.13.

Among the big names making news in the market today were Motorola and JPMorgan.

“Over the years of market watching, one can easily become very cynical as they observe the machinations of the international banks that run the financial system of the US. The manner in which their reports are issued, the timing involved, the reactions of the various markets, all lead me to believe that nothing should ever be taken for granted when it comes to the primary dealers and their cozy relationship with the Federal Reserve.

Those of you who have been watching the bond market are no doubt aware by now that they have been getting whacked of late. Over the last month, they have dropped over 6 full points. In the process of so doing, the bonds have been telegraphing inflation fears related to the out of control US government spending and easy money policy known as QE. The former necessitates huge supply of Treasuries to fund the deficits while the latter provides the demand.

The problem has been that the bond market is not cooperating with the Fed's intentions. They want the long bond market moving higher, not lower. In effect, the market has short circuited the effect of QE.

Now, how to stop this rapid descent in bond prices? Enter the primary dealer known as Goldmach Sachs, the plague upon the US financial system. Goldman issues a report today crowing about high crude oil prices slowing down the economy and stifling demand for commodities and what not. They then go on to advise their clients to dump their long commodity positions. Meanwhile the Dollar continues to descend violating a major chart support level in the process only barely managing to recover that level before the close of afternoon trading in New York. However, bonds rallied sharply forcing a sizeable short covering burst as traders had been positioning for the inflation trade.

So what do we have when the dust settles? The crude oil market drops sharply down from its recent peak near $113 and bonds settle nearly a full point higher erasing half of the losses of the previous week. The Dollar however is still weak.

If you are the Fed and want to see your QE program be successful, you cannot have long term interest rates continuing to rise nor can you have energy prices continuing to soar. But what can you do short of actually stopping QE dead in its tracks, something which if you do, will crater the stock market. Why enlist your pals over at Goldman and agree to release their "client recommendation". Presto - problem solved. Crude gets hit hard and bonds rally. The Dollar? Well that will have to wait for another day.

Look at the chart [here] and see the regions I have noted and compare the price action of the long bond with that of crude oil. Observe that for the last two weeks of February of this year, the surge higher in crude oil was being viewed as a deflationary occurrence by the bond market, a tax on economic activity, which would slow economic growth. Bonds rallied sharply during that time frame and while the Fed was not pleased to see the spike in energy costs, at least they had the satisfaction of watching bond prices move higher and longer term interest rates move lower.

The problem began in the middle of March when crude oil, not content to sit at $100, went on to spike higher into new ground surging from just below $100 all the way to $113. By then the bond market noticed the move and began connecting the dots and selling off as traders braced themselves for the inevitable inflation outburst associated with soaring energy prices. Whether it was trucking, shipping, railroads, Fed-Ex, UPS, etc; anything requiring energy to move goods was going to be impacted. These businesses had to pass through the higher energy to their customers or end users with the result that the upward price pressures would filter through into the economy. As the bond market sold off and energy stayed firm, the QE program was becoming useless.

Call me cynical, but after looking at the price chart and noting how the rise in crude from mid March onward corresponded directly with a move lower in the bonds, it is evident that the bond market WAS NO LONGER viewing the rise in crude as a deflationary factor as it had done so a month earlier, but was now firmly pricing in the rising price as an inflationary event.

Today we suddenly get Goldman telling the world that the bond market has it all wrong and that the rising crude oil price is going to again be deflationary. Thus the recommendation to sell commodities, gold included, which has the effect of dropping crude lower and moving the bonds higher.

We'll see how long this "new" mindset sticks around or whether Goldman has singlehandedly managed to enforce a new psychology on the market place. Either way, the Fed is no doubt quite pleased at what they saw today, with the exception of perhaps the action in the Dollar. They can deal with that another day.

The Biblical plagues that beset Egypt did not include Goldman Sachs but the locusts that devoured all that is valuable and consumed it upon themselves have a lot in common with this privileged insider which makes its living by preying upon the wealth of others.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 0.91 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 133.35 - No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 11,212.53 -30.36 change from yesterday’s data.

Harmony’s (HMY) gold production, Solitario’s (XPL) priced offering, NovaGold’s (NG) first quarter results, Northgate’s (NXG) construction update, and SilverCrest’s (SVL.V) start-up production and commissioning phase activities 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.

Mountain Boy Receives Updated Technical Report-Reports Increase in Grade and Ounces at its Silver Coin Project, BC - More
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Osisko Pours First Gold at Canadian Malartic Mine - More
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Canadian Orebodies Inc Obtains Approval of Disinterested Shareholders - More
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ICN Resources Announces TSX Venture Exchange Approval on the Definitive Agreement With Lode Star - More
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VVC Exploration Closes a Brokered Private Placement - More
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Caribou Renegotiates Caribou Dome Agreement - More
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Lions Gate Metals Inc.: 298m of 0.44% Copper Expands Higher Grade Zone at Poplar Project, BC - More
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Dia Bras Samples More High Grades of Silver and Gold at its Bacerac Property - More
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Mexivada Mining Corp. Announces Expansion of Poker Flats Project to 3,600 Acres in the Carlin Trend, Nevada - More
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Northaven Expands Allco Holdings - More
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Homeland Uranium Appoints New Executive Team - More
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Applied Minerals Provides Updated Resource Statement of its Dragon Mine Property - More
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Houston drills 1.41 g/t gold over 38.7 m including 8.8 g/t over 3.0 m near surface at the newly discovered Robertson Gold Zone - More
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Matamec Intersects 1.04% ZrO2 Over 73.3 Metres on its Kipawa HREO-Y-Zr Deposit - More
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Everett Resources Completes VTEM Electromagnetic Airborne Survey on Menarik Property, Quebec - More
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Compass Appoints Independent Committee to Consider Acquisition of Shares of Africa Mining - More
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Golden Share Plans Drilling on Malartic Lakeshore for Third Week of April - More
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Lithium Exploration Group Commences 12-Week Sample-Testing Program at Valleyview Project Site - More
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Juby Joint Venture Partner Reports Discovery of New Gold Zone Adjacent to 100% Owned Goldeye Property - More
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Ring of Fire Resources Inc. Closes Private Placement to Raise $1,500,000 - More
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Bear Lake Gold: Drilling Update at the Larder Lake Project and NI 43-101 Resource Estimate at Cheminis - More
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El Tigre Drill Hole ET-26 Encounters 11.69 Meters 180 Grams Per Tonne Silver Including 1.28 Meters 511 Grams Per Tonne Silver at El Tigre Property - More
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West Kirkland Adds to Its Technical Team and Commences Drilling in Nevada - More
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Cue Resources Ltd. Receives Positive Pump Test Results at the San Antonio Uranium Deposit - More
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Manicouagan to Commence Drilling at Kasagiminnis Lake-Part of Its Pickle Lake Gold Project - More
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Pacific Ridge Completes Airborne Magnetic Survey at Mariposa - More
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Caerus Resource Reports Sample Results at El Cafetal Gold Mine - More
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Amex Receives Confirmation from Bowmore on Continuation of Option on Chivas Property, Mexico - More
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Cap-Ex Acquires Adriana's Properties Adjoining Block 103 - More
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Revolution Expands Jones-Keystone Discovery: Intersects 104.0 meters averaging 1.27 g/t Au, including 40.0m of 2.33 g/t Au at Champion Hills Project - More
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Everton Reports Additional Results From La Lechoza Including 11.26 g/t Au and 235 g/t Ag, 0.76% Cu, 6.99% Zn, 1.05% Pb Over 1.50 Metres - More
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Auryx Gold Drilling Identifies Two New Zones of Mineralization at the Otjikoto Gold Project in Namibia - More
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Strategic Investor Invests in International Lithium Corp., Proposed Spin-Off from TNR Gold Corp. Proceeding - More
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Luna Gold Applies for a Secondary Listing on the Lima Stock Exchange and Appoints Celfin Capital S.A. SAB as Its Sponsor in Lima - More
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Rainy River and Northern Superior Announce Initial Assays and the Completion of Winter Diamond Drilling at the Ti-Pa-Haa-Kaa-Ning ("TPK") Project - More
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August Announces Trenching Program at Las Lajas Gold Project, Mexico Completed; Follow-Up Diamond Drilling Program Underway - More
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Eurasian Minerals Identifies Additional Drill Defined Zones Including 31.5 Meters of 1.22% Copper and 15.1 g/t Silver at the Golcuk Property in Turkey - More
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Formation Metals Inc. Proposes to Extend Warrants - More
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Castillian Re-Files September 30, 2010 Interim Financial Statements to Include Notice of No-Auditor Review - More
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Positive Preliminary AmmLeach(C) Amenability Testwork on Samples From Firestone's Zinc Properties in Nevada - More
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Avion Gold Re-Files September 30, 2010 Interim Financial Statements to Include Notice of No Auditor Review - More
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VMS Ventures Discovers High Grade Copper Zone Near Surface: 9.81% Copper Over 1.37m Within 6.59m of 2.25% Copper in Hole RE-11-001 at Its 100% Owned Cowan River - More
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Spartan Gold Ltd. Announces Expansion of Poker Flats Project to 3,600 Acres in the Carlin Trend, Nevada - More
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Orosur Mining Inc. Announces 2011 Third Quarter Earnings Conference Call and Web Cast - More
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Harmony sees March quarter gold output 2 pct lower - "Harmony Gold (HARJ.J) said on Wednesday that its gold production for the March 2011 quarter would likely be two percent lower than the previous quarter mainly due the impact of the Christmas break.

It did not give figures in a brief guidance to investors but it said cash operating costs remained steady and capital expenditure was contained during the quarter." More
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Newmont Takes Paladin Energy Stake After Fronteer Takeover - More
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Solitario Prices Common Stock Offering - "Solitario Exploration & Royalty Corp. (NYSE Amex:XPL) (TSX:SLR.to - News) today announced that it has priced an underwritten public offering of 3,400,000 shares of common stock at a price to the public of $2.50 per share. Solitario expects that the net proceeds of the offering, after deducting underwriting discounts and commissions and estimated offering expenses, will be approximately $7.8 million. Solitario intends to use the net proceeds from this offering for the completion of the feasibility study, advancement of permitting and exploration drilling at its Mt. Hamilton project, exploration in Peru and Mexico, the repayment of certain of its outstanding short-term margin borrowing and general corporate purposes, including possible acquisition and exploration of new mining properties. In connection with the offering, Solitario has granted the underwriter a 30-day option to purchase up to an additional 510,000 shares to cover over-allotments, if any. The offering is expected to close on or about April 18, 2011, subject to satisfaction of customary closing conditions." More
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NovaGold First Quarter Financial Results and Projects Update - "For the three-month period ended February 28, 2011, the Company reported a net loss of $67.4 million (or $0.22 basic and diluted loss per share) compared to a net loss of $19.4 million (or $0.10 basic and diluted loss per share) for the corresponding period in 2010. This variance was mainly due to the non-cash asset impairment of the power transmission rights which resulted in an impairment charge of $52.7 million, of which $13.8 million was attributable to non-controlling interest and $9.7 million of future income tax recovery." More
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SilverCrest Santa Elena Mine Commissioning Phase Update Silver and Gold Sales Reported - "SilverCrest Mines Inc. (TSX-V:SVL - News) (the "Company") is pleased to report on start-up production and commissioning phase activities at its 100% owned Santa Elena mine located in Sonora, Mexico. Based on revised reserve estimates, mine plan and leach cycle, the open pit mine is expected to produce approximately 800,000 ounces of silver and 30,000 ounces of gold per full year of production at an estimated life of mine cash cost of US$8 per ounce of silver equivalent using a 55:1 Ag:Au ratio on a recovered ounce basis. Based on start-up production for the first quarter and assuming Commercial Production (near design capacity and steady-state) is achieved by June, the mine is expected to produce approximately 430,000 ounces of silver and 26,000 ounces of gold for 2011. The most significant commissioning activities completed to December 31, 2010 and March 31, 2011 are outlined below. For more information and to view production photos, please visit the Company's website at www.silvercrestmines.com." More
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Northgate Minerals Provides Update on Construction and Exploration Activities at Young-Davidson - "Northgate Minerals Corporation (TSX:NGX.to - News) is pleased to provide an update on construction activities for its 100% owned Young-Davidson project located beside the town of Matachewan, Ontario, 60 kilometres ("km") west of Kirkland Lake. Northgate is also pleased to report that follow-up drilling on the YD West zone continues to return positive results." More
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