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

The Metals:

Gold dipped a few dollars to $1639.51 by a little after 8:30AM EST, but it then rallied back higher for most of the rest of trade in New York and ended near its late session high of $1666.40 with a gain of 0.93%.Silver surged to as high as $32.86 and ended with a gain of 0.93%.

Euro gold rose to about €1268, platinum gained $11.25 to $1677, and copper gained 6 cents to about $3.89.

Gold and silver equities waffled near unchanged and ended mixed.

The Economy:

Average rate on 30-year mortgage up to 3.92 pct. Yahoo

Tomorrow at 8:30AM EST brings CPI for February expected at 0.4%.Core CPI is expected at 0.2%.At 9:15 is Industrial Production for February expected at 0.5% and Capacity Utilization expected at 78.8%, and at 9:55 is Michigan Sentiment for March expected at 75.8.

The Markets:

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

Oil fell after Reuters reported that “Britain has decided to cooperate with the United States in a bilateral agreement to release strategic oil stocks.”

The U.S. dollar index fell as traders took profits from this week’s earlier gains.

Treasuries fell as the Dow, Nasdaq, and S&P rose on decent economic news.

Among the big names making news in the market today were Apple, Las Vegas Sands, Yahoo, and Cisco.

The Commentary:

“Much to the chagrin of the Federal Reserve, bond traders are taking that FOMC statement from yesterday and taking no prisoners as they literally hammer the long bond into submission. I find it a bit ironic (to be honest I am gleeful about it) that the Fed, which continues its attempts to manipulate hedge fund behavior by herding them into the equity markets, has opened an enormous can of worms and awakened the heretofore comatose bond vigilantes as an undesirable chain reaction to their "peachy" statement about the state of the US economy.

Bond traders are already moving the Fed Funds Futures to indicate interest rate hikes in early 2014, and not the latter part of 2014 as those minutes revealed yesterday. Worse, the yield on the Ten Year has spiked. It started off the week at 2.04% and ended today at 2.27%. As for the long bond, forgettaboutit; it was absolutely pummeled today now having dropped over 3 1/2 points the last two days.

What has happened is very simple - the happy talk about the US economy coming out of the FOMC minutes has traders jettisoning safe haven trades and even short term Treasuries in favor of the bull train leaving the station in the US equity markets. The problem? The last thing that the Fed and the US government needs or wants is a rising interest rate environment.

Oh sure, they can stand a bit of a move higher, but if any of this begins filtering into the mortgage market and the cost of home mortgages, autos, etc. begins moving higher, it will nip whatever nascent recovery there might be in the bud. And don't forget - there is that pesky "LITTLE" issue of the US national debt which will cost more federal tax revenue to service in a rising interest rate environment. Remember, even with its more upbeat assessment of the US economy yesterday, the FOMC certainly did not suggest that the recovery was robust or was it healthy. What they basically said, if I might paraphrase, was that it was showing modest improvement but was not out of the woods.

Doesn't matter - the bond market is focused on the "modest improvement" part and is interpreting that, either rightly or wrongly, that the Fed is not going to be doing any QE in the immediate future. After all, if things are supposedly so firmly on the right track, why the heck does anyone want to be in a "SAFE HAVEN" Treasury when everything is peachy keen, particularly if those paper IOU's are paying out squat.

The Fed has basically undercut it own low interest rate policy by giving investors the greenlight to sell bonds in order to deploy those funds into the equity markets. See what happens when you engineer a stock market rally?

I suspect that the Fed is going to be getting increasingly nervous if this sell off in the bonds, particularly the long end, continues unabated. Let's see how far the bond bears will push them.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

The Statistics:

Activity from: 3/14/2012

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: 182.36: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,752.67: No change from yesterday’s data.

The Miners:

Nevsun’s (NSU) new director, Great Basin’s (GBG) new bought deal, Seabridge’s (SA) optioned project, Vista Gold’s (VGZ) operating highlights, Freeport’s (FCX) update on Grasberg operations, Richmont’s (RIC) drill results, Aurizon’s (AZK) 2011 results, McEwen Mining’s (MUX) production and development update, and AngloGold’s (AU) upgraded credit rating 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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