Gold Seeker Closing Report: Gold Gains $30 before Fed Statement; Volatile Afterwards

	Close	Gain/Loss
Gold	$1739.90	+$29.60
Silver	$37.83	-$1.50
XAU	201.22	+4.40%
HUI	549.84	+4.47%
GDM	1599.52	+4.09%
JSE Gold	2512.17	+26.03
USD	74.05	-0.74
Euro	143.35	+1.62
Yen	130.03	+1.47
Oil	$79.30	-$2.01
10-Year	2.182%	-0.157
T-Bond	137.1875	+1.90625
Dow	11239.77	+3.98%
Nasdaq	2482.52	+5.29%
S&P	1172.53	+4.74%

Gold climbed as much as $69.09 to a new all-time high of $1779.39 at about 5:20AM EST before it fell back to as low as $1719.25 by late morning in New York, but it then rallied back higher in the last two and a half hours of trade and ended with a gain of 1.73%. Silver fell to as low as $37.508 before it also bounced back higher in late trade, but it still ended with a loss of 3.81%.

At the time of writing, gold is mixed in afterhours access trade in reaction to the fed’s statement (more below). Live Gold Charts

Euro gold climbed to a new record high at about €1222, platinum gained $30.50 to $1747.25, and copper rose slightly to about $3.97.

Gold and silver equities rose almost 2% at the open before they fell back near unchanged by midmorning and then saw slight losses immediately after the fed’s statement, but they ultimately rose to new highs in late trade and ended with over 4% gains.

Report	For	Reading	Expected	Previous
Productivity	Q2	-0.3%	-0.6%	-0.6%
Unit Labor Costs	Q2	2.2%	2.2%	4.8%

The fed kept the federal funds rate in its record low range of 0.00% to 0.25% as expected. They also pledged and/or forecasted to keep rates exceptionally low until at least mid-2013 (should economic conditions warrant it – which they expect), and that caught many by surprise.

From the statement: “The committee currently anticipates that economic conditions -- including low rates of resource utilization and a subdued outlook for inflation over the medium run -- are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”

This marks a notable change from the fed’s previous language of keeping rates low for an “extended period,” or for the “foreseeable future,” and essentially sets a target date for the possibility of higher rates to about 2 years from now.

“The Federal Open Market Committee also discussed a range of policy tools to bolster the economy and said it is “prepared to employ these tools as appropriate,” it said in a statement today in Washington.”

“The Fed said U.S. economic growth was proving considerably weaker than expected, suggesting inflation, which has already moderated recently, will remain contained for the foreseeable future. Three officials, Richard Fisher of the Dallas Fed, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia, voted against the move.”

Tomorrow at 10AM EST brings Wholesale Inventories for June expected at 1.0% and at 2PM is the Treasury Budget for July expected at -$132.0 billion.

Oil saw slight gains in early trade on OPEC’s rosy demand forecast, but it then fell and ended with a notable loss at under $80 a barrel following the fed’s grim economic outlook.

The U.S. dollar index fell in early trade on speculation about what the fed may say, and then fell even further following their statement. The Swiss franc exploded to new highs.

Treasuries reversed early losses and shot higher following the fed’s statement as yields plunged to historic lows on worries about slow economic growth. Today’s $32 billion 3-year note auction sold at a high yield of 0.50% with a bid to cover of 3.29.

The Dow, Nasdaq, and S&P ended nicely higher in extremely volatile and mixed trade.

Among the big names making news in the market today were AOL, Apple, Dish Network, Goldman Sachs, and HSBC.

“The following chart is more for informative purposes than for trading but I did want to note that using the Federal Government's CPI data, (which is of course deliberately designed to underestimate the true rate of inflation), gold has effectively reached its all time high in terms of a monthly closing price in inflation adjusted terms. Whether or not this induces some profit taking among longs, particularly as global equity markets are now at this hour experiencing a rather sharp upside recovery after yesterday's pounding is as yet unclear but if we see a strong short squeeze in equities, watch for some profit taking to occur in gold. Already the metal is some $30 off its best levels of the evening.

We might also see a recovery in the gold mining shares if this rally continues into the New York trading session as those were moving higher yesterday before they succumbed to the general wave of equity selling.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

“U.S. Stock Market – Since the fall of 2007, I’ve stated that America was in serious dog-do. While I was blessed to foresee much of an incredible bear market rally, I never loss sight that such a rally was not a new bull market but a bear rally in a secular bear market that I constantly stated would need at least to eventually retest the 2009 lows. I compared my expectation to what took place in the Japanese stock market from 1989 until present.

While I was never able to get short, I also am not caught with my pants down to my knees but my limited exposure to mining shares has caused unfortunately some of my butt to be exposed.

As noted last night, out of this carnage an explosive rally should be born. But one should not think this is the second coming of a mega bull market but rather relief rallies within a bear market that has many more years to run its course (of which its ultimate target is at least the 2009 lows).

Gold and Silver – From the spring of 2003 until today, yours truly has seen gold and silver as the single best assets, bar none. I was blessed to have sidestepped some rather nasty corrections along the way. Since 2003, I’ve suggested gold being one’s single largest holding by far. I’ve maintain up to a 50% exposure to gold up until last evening where I suggested lowering such exposure down a notch. You will see that in my updated “Tracking List”, I lowered such exposure to 40% but also increased mining share exposure from what has almost always been limited to 20% to 40%. This is because while I still think gold can rise to my new target of $2,350, I think we can finally see the mining shares outperform the metals going forward (fingers, toes and everything else I can cross).

Let’s not forget that it’s the very things that unfolded for why we were so incredibly bullish on gold $500, $1,000 or even more lower. The difference now is it’s no longer cheap but still worthy. I can tell you don’t be surprised that you see it $50-$100 lower one day and for the umpteenth time, be proclaimed as “topped out” or “the bubble burst” as we’ve heard over and over again (yet rest assured the very journalists who wrote those stories will never ask their sources and/or themselves why were they so wrong for so long and instead simply say it all over again).”- Peter Grandich, Grandich Letter

COMEX Gold Trust (IAU) Total Tonnes in Trust: 161.64: +0.69 change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,890.74: -119.71 change from yesterday’s data.

Richmont’s (RIC) second quarter results, Seabridge’s (SA) drill results, New Gold’s (NGD) drill results, Aurizon’s (AZK) drill results, and Hecla’s (HL) second quarter results 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.

Liberty Star Pays 2011/2012 Claim Fees for Southeastern Arizona Exploration Projects - More
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Rio Novo Gold Intersects 2.10 g/t Au Over 15.0m at Vira-Saia Target, Almas Gold Project - More
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AuRo Resources Appoints John Gomez to the Board of Directors - More
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El Tigre Silver Corp. Appoints Steven Craig as Vice President of Exploration - More
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Astral Samples 12m at 2.1 g/t Au from Hand Trenching, 32.2 g/t Gold & 368 g/t Silver from Grab Samples, Prepares to Drill in Sinaloa, Mexico - More
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Ethos Identifies New "Mascot Creek" Gold Soil Anomaly Area Near the Coffee Fault, Betty Property, White Gold District, Yukon - More
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VMS Reports 5.94% Copper Over 2.23 Metres in Drill Hole RLE007 From Follow-Up Drilling of New Copper Zone Located 1.8 Kilometres Northeast of Reed Copper - More
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TriStar Signs Drilling Contract and Confirms Soil Gold Anomaly at Castelo de Sonhos Property in Brazil - More
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Eagle Plains/Blackrock Commence Geophysical Survey on Elsiar Copper-Gold Project, West-Central B.C. - More
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Thundermin and Cornerstone File NI 43-101 Technical Report on Sedar in Support of an Updated Little Deer Mineral Resource Estimate - More
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Goldstrike Board Appointment - More
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Geopulse Completes First Stage Acquisition Strategy - More
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Bayfield Extends Near Surface Gold-Silver Mineralization in Easterly Step-Out Holes at Rainy River, NW Ontario - More
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Mineral Mountain Increases Its Land Holding in the Straw Lake Area, Purchases the Konigson Gold Occurrence - More
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Eloro Resources Announces Consolidation of Shares - More
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Rare Earth Metals Reports 2.05% TREO Over 96.2 Meters from Its Two Tom Deposit in Labrador - More
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Cadillac Obtains 0.27% Copper Over 610 Feet - More
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Threegold in Gold Completes First Stage Exploration - More
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Caribou Copper Retains Deutsche Investor-Relations - More
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Mexivada Appoints VP-Exploration and Updates Progress at Timmins, Ontario Gold Project - More
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Cascadero Copper Corporation: Drill and Crew Mobilized to Las Cuevas Gold Prospect Salta Province Argentina - More
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Abcourt Mines Inc.: High Grade Values Intersected at Vendome Property in Four Holes Confirm Historical Data - More
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Trelawney Secures Additional Lock-Up Agreements; 57% Of Augen Gold Shares Now Supportive of the Trelawney Offer - More
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Globex Announces 2011 Half Year Results - More
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Kenai Resources Ltd.: Update on Sao Chico Gold Project, Brazil - More
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Silver Spruce Reports More Significant REE Results Pope's Hill Trend, Trans Labrador Highway, NL - More
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PAW Announces Closing of Non-Brokered Private Placement - More
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Rye Patch is Ready to Drill Garden Gate Pass Project - More
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Tara Minerals Enters Mine Development Partnership - More
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SEMAFO: Initial Drill Results at Mana's Massala-Saoura Include 6.77 g/t Au Over 8 Meters - More
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Search Minerals Announces Option for Votorantim Group to Acquire 50% Interest in Its Salt Technology Process for Nickel Laterite Extraction in Brazil - More
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Estrella Announces Initial Drill Results from Colpayoc Gold Project, Peru - More
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Local Demonstrations Delay Drilling at Southern Arc's West Lombok Project - More
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Great Western Minerals Group Appoints Monazite Processing Expert to Steenkampskraal Rare Earth Project Team - More
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Lumina Intersects 578 Meters Grading 0.85% Copper Equivalent at Taca Taca Copper-Gold-Molybdenum Project, Argentina - More
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Tournigan Updates Progress on Prefeasibility Study for Kuriskova - More
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North Country Gold Corp. Extends High-Grade Gold Trend at Three Bluffs and Three Bluffs West to Depth and Along Strike - More
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Sono Extends High-Resolution Aeromag Program on its Copper/Silver Project in Botswana, Africa - More
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Probe Mines Commences Metallurgical Testwork at Borden Lake - More
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Silver Quest Intersects 278 Metres of 2.8 Grams per Tonne Gold at Davidson Gold Project, BC - More
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Linear Metals Retains Alliance Advisors as US Investor Relations Consultant - More
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Jayden Resources Inc.: Silver Coin Continues to Produce Strong Results; 3.90 g/t Gold Over 13.0 Meters Including 43.8 g/t Over 0.5 Meters in Hole SC11-351 - More
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Sunridge Gold Engages Endeavour Financial - More
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Typhoon Exploration Confirms Several Gold Zones, Including One Located 2.5 km from the Fayolle Deposit - More
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INV Metals Reports Q2/2011 Results - More
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Xmet Completes First Phase of Trenching Program on Duquesne-Ottoman Property - More
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Mountain Lake Reports More High-Grade Gold at Leprechaun with Intersection of 16.15 g/t Over True Width of 13.3 Metres in Step-Out Hole VL-11-306 - More
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Hecla Reports Second Quarter 2011 Doubling of Income - "Hecla Mining Company (“Hecla”) (NYSE:HL) today announced second quarter net income of $33.3 million, or $0.12 per basic share. Second quarter silver production was 2.3 million ounces at a cash cost of $0.52 per ounce, net of by-products." More
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Richmont Mines Announces a Significant Increase in Earnings and Cash Flow for the Second Quarter; 2011 Production Guidance Reaffirmed - "Richmont Mines Inc. (TSX: RIC.TO - News)(AMEX: RIC.TO - News), ("Richmont" or the "Corporation") is pleased to announce financial and operational results for its second quarter ended June 30, 2011. Financial results are based on International Financial Reporting Standards ("IFRS") and dollars are reported in Canadian currency, unless otherwise noted." More
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Drilling Upgrades and Expands Gold Resources at Seabridge's Courageous Lake Project - "Results from the first 10 infill core holes drilled this summer at Seabridge Gold's 100% owned Courageous Lake Project are likely to expand and upgrade the project's multi-million ounce gold resource. Another 38 infill holes will be drilled before the program ends this September." More
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New Gold Intersects 278 Metres of 2.8 Grams per Tonne Gold at Blackwater Project - "New Gold Inc. ("New Gold") (TSX:NGD.to - News)(NYSE AMEX:NGD) today announces the drill results for 12 additional holes and four metallurgical holes on its Blackwater Project in central British Columbia. The latest results are a continuation of New Gold's aggressive drill program at Blackwater where the company now has assays for a total of 66 additional holes since the completion of the project's initial March 2011 resource estimate. Today's results include infill and step-out holes drilled within and around the currently defined mineral resource." More
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Aurizon Reports Discovery of New Gold Bearing Trends Outside of the Fayolle Deposit - "Aurizon (TSX: ARZ.TO - News)(AMEX: AZK - News) ("Aurizon" or "the Company") is pleased to announce a new series of drill results from the exploration program on the Fayolle project located 20 kilometres north-east of Rouyn-Noranda, Quebec and 10 kilometres north of Aurizon's Joanna project." More
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