-- Posted 30 November, 2011 | |

The Metals:

Gold fell $14.82 to $1701.18 in late Asian trade before it rose to as high as $1750.00 by a little before 10AM EST and then stalled out a bit for the rest of the day, but it still ended with a gain of 1.81%.  Silver dropped down to $31.118 in early London trade, but it then rose to as high as $32.941 by early afternoon in New York and ended with a gain of 2.98%.

Euro gold climbed to over €1300, platinum gained $19.93 to $1552.13, and copper gained 17 cents to about $3.57.

Gold and silver equities rose over 4% at the open, continued even higher in afternoon trade, and ended with about 7% gains.

The Economy:

Fed says growth moderate, hiring still subdued  Reuters

China Reduces Reserve Ratios to Spur Bank Loans  Bloomberg

Fed, Five Central Banks Cut Rate on Dollar Swaps  Bloomberg

“Six central banks led by the Federal Reserve lowered the cost of emergency dollar funding for financial companies in a global effort to ease Europe’s sovereign-debt crisis.

The new interest rate is the dollar overnight index swap rate plus 50 basis points, a half percentage-point cut, and the program was extended by six months to Feb. 1, 2013, the Fed said today in a statement in Washington. The Fed coordinated the move with the European Central Bank as well as the Bank of Canada, Bank of England, Bank of Japan, and Swiss National Bank. (SNBN)”

The fed voted 9-1 in favor of today’s action.  Only Lacker dissented.

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 11/26 expected at 390,000.  At 10AM is the ISM Index for November expected at 51.0 and Construction Spending for October expected at 0.3%.

The Markets:

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

Oil remained above $100 a barrel after the Energy Information Administration reported that crude inventories rose 3.9 million barrels, gasoline inventories rose 200,000 barrels, and distillates rose 5.5 million barrels.

The U.S. dollar index and treasuries plummeted as the Dow, Nasdaq, and S&P soared over 4% higher on better than expected economic data and coordinated central bank action.

Among the big names making news in the market Friday were Warren Buffett, Silver Lake and Yahoo, AMR, Clearwire, and JPMorgan.

The Commentary:

“I still marvel when looking at these charts at those who continue to denigrate gold and particularly those who deny it is a safe haven.

While we all know that the official government CPI numbers are a fantasy, it is still rather interesting to see where gold has run into overhead resistance based on this inflation adjusted chart.

Today's actions by the Fed, in concert with 5 other Central Banks, plus the move by China to lower bank reserve requirements 50 basis points, the first time they have done so in three years, has provided today's fireworks across the commodity and equity marks. It is RISK ON time once again for the hedgies.

I mentioned in my analysis of the COT report yesterday, that the metals needed some sort of fundamental spark to break them out of their respective trading ranges. Perhaps we have that, at least for today, in the form of easing of liquidity concerns. That is unclear to me at this point since this really does not do anything to address the structural issues leading up to the sovereign debt issues. It is simply keeping a liquidity crisis from becoming a full-blown insolvency crisis.

This might explain why after the initial blast higher in the markets on the euphoria around the Central Bank actions, that the markets have not been able to continue adding to their early session gains. Traders are maybe having second thoughts about all this. I know I sure am. While it will temporarily help ease lending concerns, it still does not address the sinking value of all that sovereign debt on the books of the big European banks, nor of that on the books of some US banks. It seems to me we are going to have to see a very clear, unambiguous signal that Germany is going to go along with a large role for the ECB and maybe even a Eurobond market before traders will get more aggressive to the upside.

Regardless, silver has been able to capture its first line of technical chart resistance centered near the $32.50 level. This is its first visit back to this level in a week's time. That has served to reinforce the support level that formed just below the $31 level. For this market to now get anything going to the upside, it is going to have to first convincingly clear $33.50 and then exceed $35. Only then will it have a shot at anything more than a return to the top of its recent trading range.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

“Short and Sweet - Once again, yours truly not only avoided what an ever-increasing number of readers have suggested I should be since early this year (short the U.S. stock market), but I also suggested temporary membership in the “Don’t Worry, Be Happy” crowd and getting long the market heading into their biggest fable of the year: the Santa Claus rally.

To all those who went long the general stock market, great! Now start exiting ASAP! No, I don’t think the “happy” people shall fail to convince the sheep Santa is real. Nor do I wish to be the Grinch (Grandich) who stole Christmas just as we started to enjoy our presents. However, today’s Central Bank actions worldwide scare the living crap out of me!!! What we’ve witnessed is a “Hail Mary” and a “throw the kitchen sink” all rolled into one. While the momentum from this action can carry right through Christmas and into New Year, I’m not going to ride it all the way unless I get pictures it’s Tim Tebow quarterbacking it.

Gold, meanwhile, remains my overwhelmingly favorite asset and the chart above gives me great comfort the “mother” of all gold bull markets remains intact (Relative strength getting stronger). As you can see, we’re coming to a decisive point on the chart where a break above or below trendlines is going to mean a lot. Right now, $1,750 is resistance and $1,675 support. Obviously, it’s my expectation that the break shall be above the downtrend line in purple. We may need to trade sideways some more and knowing liquidity shall start to dry up the further we get into December, it may be wise not to react as soon as one of the lines is violated.

I shall continue to look to buy mostly on a “stink bid” process and shall do my best to keep you informed of such actions.

Please remember: my offices shall be closed from December 10th through January 3rd and blog posting shall be limited during that period.”- Peter Grandich, Grandich Letter

GATA Posts:

Gold shares, cheapest since 2002, said to be 'coiled spring' for rally

Chris Martenson on exponentially rising debt and rapid depletion of resources

The Statistics:

Activity from: 11/29/2011

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: 171.54: +0.14 change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,627.88: No change from yesterday’s data.

The Miners:

Randgold’s (GOLD) total voting rights, Buenaventura’s (BVN) and Newmont’s (NEM) suspended construction in Peru, Entree’s (EGI) closed financing, Great panther’s (GPL) drill results, Revett’s (RVM) permitting update, and SilverCrest’s (SVL.V) commenced drilling were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSER

Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.

All mining news will return tomorrow.

- Chris Mullen, Gold Seeker Report

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• http://www.goldseek.com
• http://www.silverseek.com
• http://www.goldreview.com 

© Gold Seeker 2011

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