-- Posted Tuesday, 10 February 2009 | | Source: GoldSeek.com

April Gold closed up 21.4 at 914.2. This was 6.2 up from the low and 5.3 off the high.

March Silver finished up 0.3 at 13.13, 0.03 off the high and 0.07 up from the low.

The gold market behaved impressively on Tuesday morning by starting out positive
and then managed to add to the gains in the face of a mid morning downside extension
in the US equity markets. It certainly appeared as if disappointment off the
Treasury Secretary's presentation undermined the stock market and that in turn
pushed the gold market up to an even higher level. It seemed as if the gold market
was being lifted by a combination of flight to quality and inflation, even though
the inflation argument was somewhat countervailed by the weakness in the US equity
market and by the weakness in the energy complex. However, seeing the $32 billion
in 3 year notes go off well in the first leg of the current refunding cycle would
seem to suggest that the US will be able to borrow more and perhaps create even
more money and to many traders that is inflationary.

The silver market started out strong and added to the gains in the face of extending
weakness in the US equity market. Significant strength in the platinum market
might have lent some spillover support to the silver and gold markets during the
trade Tuesday. Seeing the first leg of the Treasury refunding go off "well" might
have been seen as an inflationary development as the US for the time being looks
to be able to borrow more money and create more money and that might be seen as
an inflationary development by the metals trade.

- The Hightower Report

Futures Analysis and Forecasting

-- Posted Tuesday, 10 February 2009 | Digg This Article | Source: GoldSeek.com

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