Gold Seeker Closing Report: Gold and Silver End Mixed

The Metals:

Gold climbed as much as $18.10 to $1737.20 by a little after 9AM EST before it fell all the way back to $1720.41 by a little after 2PM, but it then bounced back higher in late trade and ended with a gain of 0.59%. Silver surged to as high as $33.942 before it fell back to as low as $33.09 and then also rebounded, but it still ended with a loss of 0.33%.

Euro gold rose to about €1323, platinum gained $7 to $1633, and copper remained at about $3.80.

Gold and silver equities traded slightly higher for most of the morning, but they then fell back off a bit in afternoon trade and ended with modest losses.

The Economy:

Fed's Fisher to Wall Street: QE3 is "fantasy" Yahoo

Mortgage applications down as purchase demand falls Reuters

“A few members of the Federal Open Market Committee meeting said the central bank may soon have to consider more asset purchases, while others said the economic outlook would have to deteriorate first.

A few members said economic conditions “could warrant the initiation of additional securities purchases before long,” according to minutes of their Jan. 24-25 meeting released today in Washington. “Other members indicated that such policy action could become necessary if the economy lost momentum or if inflation seemed likely to remain” below 2 percent in the medium run.”

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 2/11 expected at 365,000, Housing Starts for January expected at 671,000, Building Permits expected at 675,000, and PPI for January expected at 0.3%. Core PPI is expected at 0.2%. At 10AM is the Philadelphia Fed for February expected at 10.0.

The Markets:

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

Oil remained higher after the Energy Information Administration reported that crude inventories fell 200,000 barrels, gasoline inventories rose 400,000 barrels, and distillates fell 2.9 million barrels.

The U.S. dollar index turned slightly higher after the euro fell on news that Greece’s latest bailout package is getting delayed.

Treasuries ended slightly lower in mixed trade.

The Dow, Nasdaq, and S&P fell on worries about Europe.

Among the big names making news in the market today were Zynga, Yahoo-Alibaba, JPMorgan, HSBC, Deere, Kellogg and Pringles, and BNP Paribas.

The Commentary:

“Gold is holding firm in today's session but has retreated from its best overnight levels. You will notice that within the larger time frame on the chart, gold has made a nice run to stiff resistance beginning near $1760 and then retreated. Buying on the downside coming in near the support level marked (close to $1720) has been extremely consistent over the last two weeks however. The result has been a constricting triangle forming which is a consolidation pattern.

Bulls cannot take it through resistance at this point but neither can the bears break it down. I happen to believe that the reason the latter cannot accomplish their intent is the reality of gold strength across a variety of other world currencies. Bluntly - the price of gold is holding in terms of all of the major currencies as savvy investors/traders are well aware of what the monetary authorities are doing to their respective currencies in order to keep the game of musical chairs, aka - the global economy - going.

Central Bankers and monetary authorities are doing what they were born to do, namely, destroy the value of their nation's currencies to benefit the big international banks within their midst. Gold is all too well aware of that and is doing what it always has done and always will do - function as a currency of last resort and a refuge from their depredations.

What we want to watch for in gold is a breach of this triangular pattern with a close preferably above the $1750 level to kick this thing up into that heavy resistance zone noted. Obviously gold bulls would want to see dips below $1720 meet with strong buying and an almost immediate return back above that heavy red line shown.

As another quick note of reference, check out the price of Gold compared to the price of the US long bond in the following chart. Note that going back to early 2009, when QEI was still in force, gold was the asset that investors favored in relation to the US bond market. After a brief dip lower in this ratio during the middle of 2010, when investors were fearful that another round of QE was not going to be forthcoming, the ratio returned in favor of gold until it peaked just after QEII expired and the Fed had nothing really significant to replace it. From that point on, bonds have been a better investment than gold.

That might possibly be changing at this point as interest rates crawl along at abnormally low levels and investors become more fearful of currency debauchment. The downtrend line in this ratio has been broken but has a bit more work to do in order to look more convincing. A move through the heavy blue line shown would do the trick.

At some point in this now multi-year game of constant liquidity doses and other quick fixes which solve nothing, investors will begin to dump bonds and move much more strongly towards gold. That will signal the beginning of the end game as the ratio will be flashing the loss of confidence in the political and monetary authorities to deal with this massive papering-over of the problem.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

GATA Posts:

Spain first stole it from Peru and now steals it from salvagers

Fed audit should cover gold 'shenanigans,' Paul tells GoldSeek Radio

The Statistics:

Activity from: 2/14/2012

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 0.384 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 179.27: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,624.97: -33.25 change from yesterday’s data.

The Miners:

Barrick’s (ABX) dividend, Northern Dynasty (NAK) Environmental Baseline Document, AngloGold’s (AU) full-year adjusted headline earnings, and Silvermex’s (SLX.TO) fourth quarter production results were among big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

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

Please see Yahoo’s Mining/Metals News Wire for all of today’s mining news.

- Chris Mullen, Gold Seeker Report

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Additional Resources for today’s Gold Seeker Report can be found:

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

© Gold Seeker 2012

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