Gold Seeker Closing Report: Gold and Silver Gain About 1%

The Metals:

Gold climbed up to $1667.60 in Asia before it fell back to $1649.90 in late New York trade, but it still ended with a gain of 0.79% from last Friday’s close.Silver rose to as high as $30.575 before it fell back to $29.893, but it still ended with a gain of 1.25%.

Euro gold rose to about €1298, platinum gained $33.50 to $1517.50, and copper rose 10 cents to about $3.73.

Gold and silver equities fell throughout most of trade and ended with about 1.5% losses.

The Economy:

Tomorrow brings PPI, Net Long-Term TIC Flows, Industrial Production, Capacity Utilization, and the NAHB Housing Market Index.

The Markets:

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

Oil rose about 2% as the U.S. dollar index fell on economic data out of China and Germany that sent the Dow, Nasdaq, and S&P modestly higher.

German ZEW index shows record jump in January Reuters

China policy easing ahead as growth hits 2-year low Reuters

Among the big names making news in the market today were Citigroup, Kraft Foods, Carnival, and Wells Fargo.

The Commentary:

“Dow Jones news is carrying a report this morning from GFMS (formerly Gold Fields Mineral Services) detailing the amount of gold purchased last year by the world's Central Banks. It was indeed a formidable number.

The net purchases of the yellow metal came in near 430 tons, a more than 5-fold increase on the previous year. It was also the highest level recorded since 1964.

To give you a sense of the significance of these purchases - the amount of NET purchases by Central Banks in 2010 was a mere 77 tons!

Surprising to me was the fact that Mexico was the largest buyer as far as the official monetary sector goes. GFMS reports that they added almost 100 tons of gold to their reserves. I would have thought it would have been China to lead the pack.

The other surprising fact was that signatories to the Central Bank Gold Agreement (this was set up to limit the amount of gold sold by European Central Banks) sold less than 10 tons for 2011.

The summary - Central Banks are now absorbing a significant amount of world gold production. This should continue to provide very good downside support for the metal on price retracements lower as these banks do NOT CHASE PRICES HIGHER but are there to buy at levels they consider gold to have "value".”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

“Dear Friends,

The action of the Euro and the news out of Euroland is suspiciously counter intuitive. Don't buy the party line that it is buying on the bad news.

The Euro minus at least Greece looks better, not worse. The Chinese have to help in order to protect their markets.

I think the deal with the Fed is that the Chinese will watch out moderately for the level of Euro while the Fed will provide all the euro QE money via swaps to the ECB, and why not to other central banks that will then redo the swaps with the ECB?

Follow the money even though it will only be seen in retrospect.

The decrease in French interest rates on the last auction is pure QE and nothing else. It is the use of Fed swaps to the ECB and ECB loans to euro banks to buy the bonds which then add, not detract, from the bank liquidity calculations.

Who are they trying to kid? All this says that 80 to 82 on the USDX is a place where fundamental selling of the US dollar will be huge. That further supports my statement that the gold accordion price reaction is over and the downside is now quite limited in the euro.

Basically what no one a week ago would listen to is starting to take meaningful form. Aren't you glad you gave me 2 days before joining the herd of Gold? That is those of you that took time to listen to my interview.”- Jim Sinclair, JSMineset.com

“U.S. Stock Market - I continue to believe the markets least resistance remains to the upside and to avoid any shorting positions. Perhaps when the chatter starts about a new, all-time high we can put on bearish hats again (but not likely before).

U.S. Bonds – According to investment-research firm Morningstar, a portfolio of U.S. Treasuries with an average maturity of 20 years rose 28% last year, even better than its 26% jump in 2008. You would have to go back to 1995 to find a better year. Last year’s surge came in the 30th year of a historic rally. Since 1981, long-term Treasury bonds have returned 11.03% annually, 0.05 percentage point better than the Standard & Poor’s 500-stock index. To match last year’s price rally, the 10-year note’s yield would have to drop to about 1.05%, far below its record low of 1.72% last September.

In almost 30 years in and around Wall Street, no overall market has been so tempting to short (but thankfully my chicken feathers have stopped me up until now). In my heart of hearts (remembering many times our brain is smarter than our heart), U.S. bonds in general, and Treasuries in particular, are absolute avoids going forward and just may finally come a short (if I can just find some ba___s to short them).

Gold and Silver - Assuming we now have two closes above $1,646, gold has once again trapped the perma-bears and weak-knees bulls by one of its rather sharp, but not long-lasting corrections. Look for these poor souls to once again be bloodied and crying for their mommies as gold moves towards a new, all-time nominal high. Silver is looking like it wants to lead gold higher and an overall short squeeze in both is quite possible.

U.S. Dollar - While the terminally-ill patient appears to be sitting up in its bed and the crowd claiming it’s a miracle healing, my heart and brain both know America is heading for a crisis that shall make the current European one a mere opening act. I continue to hold the vast majority of my cash holdings in Canadian dollars and feel Canada shall be a much safer place to be in the coming years versus its broke and dying neighbor to the south.

Oil and Natural Gas - I continue to believe $100 oil shall become near the bottom of a range with $125 – $150 a real possibility in next 12 months. Meanwhile, its poor kissing cousin, natural gas, can’t get out of its own way. The only good news on that front is we may finally see a move away from expanding exploration that can help remove some of the amply oversupply.”- Peter Grandich, Grandich Letter

GATA Posts:

Iranian currency and economy collapsing under tighter U.S. trade sanctions

New York Sun: Secrets of the Fed

More traders notice gold's regularly counterintuitive behavior

Steve St. Angelo: Silver coin production in U.S., Canada exceeds mine output

Chinese gold bugs take the lead

Rob Kirby: U.S. rigs bond market with derivatives

Charles Krauthammer: Ron Paul's achievement

The Statistics:

Activity from: 1/13/2012

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: 173.18: +1.34 change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,516.75: No change from yesterday’s data.

The Miners:

IAMGOLD’s (IAG) capital spending plans, Kinross Gold’s (KGC) production costs, Solitario’s (XPL) drill results, Newmont’s (NEM) operating highlights, Timberline’s (TLR) drill results, Lake Shore’s (LSG) drill results, Exeter’s (XRA) Prefeasibility Study, Kirkland’s (KGI.TO) board appointment, Silvercorp’s (SVM) drill results, Great Panther’s (GPL) fourth quarter production, Endeavour Silver’s (EXK) scholarship programs, and Fortuna’s (FSM) ringing of the opening bell 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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• http://www.capitalupdates.com
• http://www.goldseek.com
• http://www.silverseek.com
• http://www.goldreview.com

©Gold Seeker 2012

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