Gold started off mixed in Asia and then rose in London and climbed up near $575 in New York before it fell off a bit, but it still ended with a decent gain to end at a new 25 year closing high.  Silver jumped higher in Asia and climbed over $9.90 in London before it fell off a bit in New York, but it also ended with a decent gain to end within a penny of its 18 and ¾ year closing high set on Tuesday.

Gold and silver equities started off slightly higher before dropping nearly 2% along with the major indices, but they did rebound into the close to end with just minor losses.

Copper made new all-time highs above $2.30, platinum gained $8 to $1,072 to get back near its 26 year closing highs, palladium gained $13 to $304 to make new 21 month highs, and euro gold remained near all-time highs above €470.

More Precious Metals Analysis:

“Gold, silver and platinum all rallied to new contract highs today, supported by a strong cash market. The fact that gold rallied despite sharply lower crude oil prices suggests the market is focusing more on demand and the strong economy than it is on fear and flight to safety issues. Still, the escalating tensions over Iran's nuclear program and the weaker dollar may have also provided some support.” - The Hightower Report, Futures Analysis and Forecasting

“The drop in supply from Central Banks, added to the new investment demand from the E.T.F.'s, and Japanese and Investment Bank buying, keeps gold driving forward, barely pausing for breath.   Pent-up demand waits for any fall in the price of gold to get in, but it's not coming!

It's not so much an individual crisis that takes gold up, but the number of potential crises that make one possible and triggers others, that makes gold an attractive investment.” - Julian D.W. Phillips of www.goldforecaster.com

“There is a real battle in the gold markets right now in the $570’s, trying to push April gold over the $578 technical resistance.  At this level, there is likely to be another impulse wave higher brought in from technical buying and short covering.  This is what the market needs in the short run to push us to and possibly over the $600 an ounce mark.  Silver too is poised to run over $10 with gold breaking higher. 

The last several months have seen a dramatic shift in sentiment for precious metals and this is in spite of a currently strong U.S. Dollar.  Gold continues to attract the status of a safe haven asset along with its monetary attribute, and after decades of neglect, old timers and fresh blood are now looking at gold in an entirely new light with it reaching fresh record highs.” – Peter Spina of www.goldforecaster.com

The U.S. dollar index started off higher on inflation fears that may cause the fed to continue to raise rates, but it turned lower following terror rumors that were later denied.  The index did not recover however, and ended near its lows of the session.

Oil fell throughout trade and ended sharply lower despite continued worries over Iran.  Natural gas stocks fell 88bcf which is a smaller drop than normal for this time of the year.

Treasuries started the day off lower on economic data that raised inflation fears which may cause the fed to continue to raise rates, but the bond market then turned higher as rumors circled that the U.S. may be raising the terror alert level.  Those rumors were later denied, but treasuries still ended slightly higher ahead of jobs data tomorrow.

The Dow, Nasdaq, and S&P dropped throughout morning trade and remained near their lows in afternoon trade to close with near 1% losses.  Inflation fears and terror fears were cited as reasons for the drop, but there was no recovery in the indices after terror rumors were denied.

Among the big names making news in the market today were Amazon, Electronic Arts, the NASD, Comcast, Electronic Arts, Whirlpool, Shell, Tyco, and General Re and AIG.

Gold & Silver Stock News Update from GoldReview.com:

Quarterly results from Royal Gold and Golden Star, Bema Gold’s new gold and silver vein system at their Julietta mine, Tan Range’s fourth tranche of their C$3 million private placement, Nevsun’s drill results from Bisha, Canyon Resources’ announced dismissal of their clean water act suit, Apollo Gold’s Black Fox drill results, and Golden Star’s updated mineral reserves were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

“My Two Ounces”

The above commentary is kept as objective as possible.  “My Two Ounces” is a segment of the report in which I interject some market views of my own as well as some reader comments.  I encourage the reader to engage and discuss these views in the Forums section on SilverSeek.com.  Access the “My Two Ounces” section of the forum here.

Why is gold going higher?  The reader may notice that I seldom, if ever, provide reasons for the movements of gold and silver in my daily commentary.  I do provide quotes from other analysts, but I rarely give reasons myself.  I simply report the movements themselves and when and where the happen in the world.  I don’t often provide reasons for the movements because I try to keep the report as objective as possible and the reasons for movements in the metals are as varied as they come when you ask the many analysts out there, but lets go over a few of the reasons today. 

Inflation fears?  Maybe, but the guys in the bond pits certainly don’t seem to be too afraid of inflation and they are regarded on Wall Street as some of the smartest around when it comes to that.  There also doesn’t seem to be a high correlation to movements in the metals when inflation fears do move stocks and bonds around. 

A falling dollar?  Maybe, but both the U.S. Dollar and the metals have found gains over the past year or so and the previously high inverse correlation between them seems to have dissipated, at least for the moment.  Twin deficits that seemingly set new records each month are among the many economic fears that could very well send the dollar back to new lows, however, and that correlation could very well return.

Safe haven fears?  Maybe, but there are often days where news of a horrible attack or a new warning from al Qaeda comes out and the metals will drop.

Climbing oil fears?  Maybe, but the correlation between oil and the metals is not so strong either.  There are many days in which oil is up yet the metals are down.  The gold-oil ratio remains at historically low levels however and should it get back to historical norms, gold needs to be much higher or oil needs to be much lower, or both.

These are 4 of the most common reasons touted out and while they may be valid, they aren’t always available as reasons for daily movements.  There have been days recently where inflation data is tame, the dollar is up, geopolitical fears are tame, and oil is down, but gold, silver, and everything else precious is up, sometimes markedly.  The opposite also occurs.

So what does this mean?  To me it means that there are much larger forces at play.  The basics of any market start at ECON 101, supply and demand.  I am currently in the middle of watching the recently released 2 DVD set of the proceedings of the Gold Rush 21 conference put on by the Gold Anti-Trust Action Committee (GATA) and it displays the supply and demand fundamentals in a form much more insightful than any research report.  The 25 minute introduction summarizing the event will have you eagerly looking forward to the 8 hours of speaker presentations.  That statement seems almost impossible, but for me and most everyone else it turned out to be true. 

Speeches by some of the most knowledgeable men and women in the financial world turn what initially seems an outrageous claim into an indisputable statement of fact.  “The Gold Anti-Trust Action Committee was organized in January 1999 as a Delaware corporation to advocate and undertake litigation against illegal collusion to control the price and supply of certain financial securities, particularly securities involving gold.”  Claiming that someone is controlling the price of gold does sound outrageous at first, but watch the DVD and your opinions are almost sure to change.

Bill Murphy, Chris Powell, Ferdinand Lips, Reginald H. Howe, Peter George, Catherine Austin Fitts, Antal E. Fekete, John Brimelow, James Turk, Robert K. Landis, John Embry, Jeffrey Dahl, James Mortensen, Hugo Salinas-Price, Adam Fleming, and Alf Field.  Seldom will you find a collection of such brilliant minds in one place.  Each brings their own perspective, but all arrive at the same fact.

Learn more about GATA at their website: http://gata.org/ 

Order the DVD set and watch a trailer at http://www.goldrush21.com/

The chairman of the Gold Anti-Trust Action Committee, Bill Murphy, also posts a daily commentary at http://www.lemetropolecafe.com/index.cfm

All are great sources to learn about the reasons why gold and the other metals are currently enjoying their impressive bull runs.  Fortunately, it seems that this bull is still just getting started.  Order the DVD to get an idea of how much further we have to go.

All of today's gold and silver stock news:

American Stellar Energy Adds Important Ground Adjacent to Their San Miguel Project in Mexico - More
- February 02, 2006 | Item | E-mail

Guyana Goldfields Intersects 102 Metres Grading 3.87 g/t Au - More
- February 02, 2006 | Item | E-mail

GoldQuest and Gold Fields Limited Expand Association in Dominican Republic - More
- February 02, 2006 | Item | E-mail

New Gold Inc.: Bought Deal Financing Agreement Increased to CDN $75 Million - More
- February 02, 2006 | Item | E-mail

Millstream Expands Property Position In Madison County - More
- February 02, 2006 | Item | E-mail

Bema Discovers New Gold and Silver Vein System at Julietta Mine - "Bema Gold Corporation is pleased to announce the discovery of a new epithermal vein system at its 79 % owned Julietta Mine in the Far East of Russia. Drilling in the Engteri region of the Julietta Mine property has intersected a high grade gold and silver vein containing up to 76.1 g/t gold and 34.1 g/t silver over 2.3 metres (hole C-5025)." More
- February 02, 2006 | Item | E-mail

Tan Range Chairman Proceeds with Fourth Tranche of C$3 Million Private Placement - "Tan Range Exploration Corporation advises that Mr. James E. Sinclair is proceeding with the fourth tranche of the private placement announced on January 13, 2005 whereby Mr. Sinclair agreed to purchase common shares of the Corporation representing an aggregate value of $3,000,000. Such shares are to be purchased in 8 quarterly tranches of $375,000 each, commencing February 1, 2005." More
- February 02, 2006 | Item | E-mail

General Metals Corporation Clarifies Recently Published Financials - More
- February 02, 2006 | Item | E-mail

Cream Minerals Clarifies News Release of January 27, 2006 Regarding Inferred Mineral Resource for Dos Hornos North - More
- February 02, 2006 | Item | E-mail

Automotive Specialty Concepts Announces the Name Change to Drake Gold Resources Corp. - More
- February 02, 2006 | Item | E-mail

Aur Resources To Hold Fourth Quarter Results Conference Call - More
- February 02, 2006 | Item | E-mail

Dynasty Gold Appoints Vice President Exploration - More
- February 02, 2006 | Item | E-mail

Tao Minerals Ltd. - News Release - More
- February 02, 2006 | Item | E-mail

Tenke Announces Initial Resource Estimate at Josemaria Project in Argentina - More
- February 02, 2006 | Item | E-mail

Sherwood Receives Conditional Approval to Accelerate Warrant Exercise: Proceeds to be used to Fund Development of Minto Project, Potentially Faster than Forecas - More
- February 02, 2006 | Item | E-mail

Southwestern Resources Corp.: 36 Metres of 9.7 Grams Per Tonne Gold Intersected in Hole B05-148, Boka Gold Project, Yunnan Province, China - More
- February 02, 2006 | Item | E-mail

Sonora Gold Options Greta Property and Receives Initial San Enrique Results from Teck Cominco - More
- February 02, 2006 | Item | E-mail

Messina Minerals ('MMI') 2006 Exploration and Drilling - More
- February 02, 2006 | Item | E-mail

Linear Gold Extends Gold-Silver-Copper Discovery at the Northern Anomaly, Ixhuatan Project, Chiapas Mexico - More
- February 02, 2006 | Item | E-mail

Northland Provides Update on Norra/Barsele and Stora Sahavaara Projects, Sweden - More
- February 02, 2006 | Item | E-mail

Oro Gold's Geochemical Survey Defines Large Scale Gold and Copper Anomaly on Cimarron Property, Sinaloa, Mexico - More
- February 02, 2006 | Item | E-mail

Petaquilla Meets with the President of Panama - More
- February 02, 2006 | Item | E-mail

Dr. Felix Kaminsky Joins Pan African Mining Corp.'s Diamond Team in Madagascar - More
- February 02, 2006 | Item | E-mail

Osisko Hits Higher Grades at Canadian Malartic: 6.57 g/t Au Over 18 Metres - More
- February 02, 2006 | Item | E-mail

Globestar Mining Retains Leading Investor Relations Firm - More
- February 02, 2006 | Item | E-mail

First Quantum Minerals Announces Formal Bid for Adastra Minerals - More
- February 02, 2006 | Item | E-mail

Goldeye Private Placement - More
- February 02, 2006 | Item | E-mail

Halo Increases Property Holdings in North-Central Manitoba - More
- February 02, 2006 | Item | E-mail

Franklin Mining Has Exceeded 2,000 Shareholders - More
- February 02, 2006 | Item | E-mail

Anaconda Gold Closes $1,614,500 Private Placement - More
- February 02, 2006 | Item | E-mail

Aurogin Commences Geophysical Program on Battle Mountain-Cortez Gold Project - More
- February 02, 2006 | Item | E-mail

Nevsun Resources Ltd.: Metallurgical Drill Hole Results, Bisha, Eritrea - "Nevsun Resources Ltd. is pleased to announce the results of assaying from drill holes specifically put down to obtain a bulk sample for metallurgical purposes. The drill program took part in two phases in 2005. Although preliminary test results having been recently released in the Bisha Scoping Study carried out by AMEC Americas Limited, additional metallurgical test work will be completed in conjunction with the Bisha Feasibility Study currently being completed. Metallurgical test work for both the Scoping Study and the Feasibility Study is being carried out at SGS Lakefield." More
- February 02, 2006 | Item | E-mail

Canyon Resources Announces Dismissal of Clean Water Act Suit - "Canyon Resources Corporation, a Colorado-based mining company, is pleased to announce the dismissal of a March 2004 lawsuit citing Clean Water Act violations in the case of the Montana Environmental Information Center, Inc. and Earthworks/Mineral Policy Center Inc., the Plaintiffs, vs. Canyon Resources Corporation and C.R. Kendall Corporation. Following a motion to dismiss by the Plaintiffs, the suit was dismissed without prejudice by Judge Charles C. Lovell, Senior United States District Judge for the United States District of Montana, Helena Division." More
- February 02, 2006 | Item | E-mail

Royal Gold Reports 26% Increase in Second Quarter Revenues - "ROYAL GOLD, INC., the leading publicly-traded precious metals royalty company, today announced fiscal second quarter 2006 net income of $2.9 million or $0.12 per basic share, on royalty revenue of $7.6 million. These amounts compare to net income for the second quarter of fiscal 2005 of $2.6 million, or $0.13 per basic share, on royalty revenue of approximately $6.0 million." More
- February 02, 2006 | Item | E-mail

Latest High-Grade Gold Intercepts Reported At Apollo Gold's Black Fox Project - "Apollo Gold Corporation is pleased to announce additional encouraging results from the 2005 core drilling program of the Gold Zone at its Black Fox Project near Timmins, Ontario, Canada. The most recent drilling continues to demonstrate high-grade gold mineralization and excellent system continuity. Highlights include (all true widths): 7.8 feet (2.4 meters) of 3.20 oz Au/ton (109.8 gm Au / tonne) in Hole 235-317 and 12.2 feet (3.7 meters) of 3.10 oz Au/ton (106.2 gm Au / tonne) in Hole 235-320." More
- February 02, 2006 | Item | E-mail

Golden Star Reports Unaudited Financial Results for the Fourth Quarter and 2005 Year - "We incurred a net loss of $12.1 million or $0.08 per share on revenues of $96.0 million during 2005 based on our unaudited results versus net income of $2.6 million or $0.02 per share on revenues of $65.0 million during 2004. While total revenues were $31.0 million higher than in 2004, due mostly to nine months' production in 2005 from our new Wassa mine and from higher realized gold prices, operating costs were $48.5 million higher, due mostly to costs from Wassa and higher overall costs for fuel, materials and labor at Wassa and Bogoso/Prestea." More
- February 02, 2006 | Item | E-mail

Golden Star Updates Mineral Reserves and Mineral Resources at December 31, 2005 - "Mineral Reserves in 2005 increased by 660,000 ounces or 17% before mining depletion. Mineral Reserves, after mining depletion, increased by 270,000 ounces or 7% during 2005 to 56.8 million tonnes grading 2.22 g/t for contained gold of 4.05 million ounces at year end. The increase was a result of an increased gold price assumption and a focused drill program around our operating mines to convert and better define our Mineral Resources (as defined below). These gains were offset by increasing cost factors and design changes." More
- February 02, 2006 | Item | E-mail

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- Written by Chris Mullen

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-- Posted Thursday, 2 February 2006 | Digg This Article