-- Posted 9 December, 2011 | |

The Metals:

Gold dropped $3.75 to $1703.35 in Asia before it rose to as high as $1723.75 in London and then fell back off to see a slight loss at $1706.40 by a little after 9AM EST, but it then rallied back higher in New York and ended with a gain of 0.24%.  Silver slipped to $31.448 in Asia, but it then chopped back higher for most of the rest of trade and ended with a gain of 1.9%.

Euro gold remained at about €1280, platinum gained $20 to $1510, and copper gained 7 cents to about $3.56.

Gold and silver equities rose about 1% by late morning and remained near that level for the rest of the day.

The Economy:

All of this week’s other economic reports:

Next week’s economic highlights include the Treasury Budget on Monday, Retail Sales, Business Inventories, and a FOMC Rate Decision on Tuesday, Import and Export Prices on Wednesday, Initial Jobless Claims, PPI, Empire Manufacturing, the Current Account Balance, Net Long Term TIC Flows, Industrial Production, Capacity Utilization, and the Philadelphia Fed on Thursday, and CPI on Friday.

The Markets:

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

Oil rose as the U.S. dollar index fell on Europe’s fiscal union.

“Europe secured an historic agreement to draft a new treaty for deeper economic integration in the euro zone on Friday, but Britain, the region's third largest economy, refused to join the other 26 countries in a fiscal union and was isolated.”

“Euro-zone leaders said on Friday they will forge closer fiscal ties via an inter-governmental accord that will likely be adopted by 26 European Union nations, leaving Britain isolated as the only member to definitively refuse to participate.”

Treasuries fell as the Dow, Nasdaq, and S&P rose on better than expected economic data and relief over Europe.

Among the big names making news in the market Friday were Toyota, Samsung, and the CFTC.

The Commentary:

“U.S. Stock Market – Once again it was proven that there are three guarantees in life:

1 – Death

2 – Taxes

3 – The “Don’t Worry, Be Happy” crowd on Wall Street shall milk their greatest fable for all its worth – the “Santa Claus Rally”.

As noted in recent comments, I had taken out a temporary membership in the “happy” camp. And while the “Tis the season to be jolly and long” can continue to the New Year thanks to decreasing volume and interest, my long-term outlook remains the same (but I shall not be the Grinch (Grandich) that stole Christmas and leave discussing this for the New Year).

Gold – I’ve just two things to say about gold:

1 – The “Mother” of all gold bull markets continues.

2 – $2,000+ in 2012 is a question of when, not if.

U.S. Bonds – Avoid. I believe it can be the worse investment for the next decade.

U.S. Dollar – The European fiasco gave a reprieve to the condemned world reserve currency. Sadly, it shall make its demise even uglier.

Oil and Natural Gas – $100 is likely to become the floor for oil in 2012 as multiple time bombs in the Middle East are set to explode. Much more ample supply of natural gas than I thought would come available has tempered my bullishness towards natural gas and I suspect we shall see a $3.50 – $5 trading range until if and when one or more of the Middle East time bombs detonate.”- Peter Grandich, Grandich Letter

“The mining sector, as evidenced by the HUI, remains mired within its now more-than-a-year long trading range which is bounded on the top by the 600 level and supported on the bottom by the 500 level. Going back into November of 2010, all rallies have eventually failed to hold for long above the top of this range. There were only two weeks in which the index was able to pull off that accomplishment but it then failed and failed very large at that. It collapsed over 85 points in a single week which dropped the index back down to the bottom of the range.

This needs to be kept in mind as we look at the daily chart which is detailing a pattern showing a tightening congestion as it moves into the end of the year. Normally one looks for a breakout of this type of coil and then a strong trending move in the direction of the breakout. However, before such a trending move could occur, we would need to see the breakout from the current constricting coil actually extend beyond the boundaries noted on the weekly chart. In other words, the breakout must have enough force behind it to not just take out the top of the downsloping trend line of the coiling pattern but push past the horizontal resistance line near 600 on the weekly chart if these mining shares are going to start a strong trending move higher.

The flip side of course is that a breakout of the lower upsloping trend line of the coil would have to extend deeply past the bottom of the larger trading range near the 500 level to suggest a trending move to the downside in these stocks.

The summary of all this is that we are still stuck in a very broad, year-long consolidation phase in the mining sector shares with some potential to resolve this stalemate depending on how the market views the efforts of the various Central Banks in dealing with the current sovereign debt crisis. Other than that, it is as much fun as watching paint dry.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

GATA Posts:

Join GATA at Vancouver and California resource conferences

Murray Pollitt: Bond investors soon may be less mesmerized

BIS, Bank of England, Fed reported to have sold gold today

The Statistics:

Activity from: 12/08/2011

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: 171.50: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,769.12: +42.36 change from yesterday’s data.

The Miners:

IAMGOLD’s (IAG) increased dividend and US Gold’s (UXG) business combination with Minera Andes (MAI.TO) were among the big stories in the gold and silver mining industry making headlines Friday.

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