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-- Posted Friday, 11 January 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold fell to $887.25 in London before it rebounded in New York and rose to $898.15 by late morning, but it then fell back to $894.44 ahead of a rally back higher into the close that left it with a gain of 0.45% at a new record high.  Silver rose to $16.272 in London and fell to $15.92 in New York before it rallied back higher in the last few hours of trade and ended with a gain of 0.50% at a new 27 year high.

Euro gold rose to over €605, platinum gained $7 to $1559 to a new record high, palladium gained $3 to $376, and copper gained over 4 cents to about $3.31.

Gold and silver equities rose roughly 1% in the first hour of trade, remained near their highs for most of the rest of the day, and closed at new record highs.

The Economy:

All of this week’s economic reports:

Next week’s economic highlights include Retail Sales, PPI, the New York Empire State Index, and Business Inventories on Tuesday, CPI, Net Foreign Purchases, Industrial Production, Capacity Utilization, and the fed’s Beige Book on Wednesday, Housing Starts, Building Permits, Initial Jobless Claims, and the Philadelphia Fed on Thursday, and Leading Economic Indicators and Michigan Sentiment on Friday.

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The Markets:

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

Strong demand forecasts and various USDA reports brought the grain complex in the news today and sent many commodities markedly higher.  Soybeans rose to a new record high near $13 and corn was limit up 20 cents a bushel with talk of a repeat performance on Monday.

Oil fell on continued worries about a contracting economy that will cut into future demand.

The U.S. dollar index rebounded slightly from yesterday’s notable losses.

Treasuries rose as the Dow, Nasdaq, and S&P plummeted for most of the day on credit market worries and concerns over coming writedowns in earnings reports due to losses related to exposure to bad mortgage investments.

Among the big names making news in the market Friday were Tiffany, Best Buy, Bank of America and Countrywide, Merrill Lynch, American Express, and Restoration Hardware.

The Commentary:

“February Gold finished up 4.1 at 897.7, 2.4 off the high and 6.2 up from the low.

March Silver closed up 0.095 at 16.37. This was 0.305 up from the low and 0.01 off the high.

The gold market showed a distinct two sided trade on a couple different occasions during the trade on Friday but clearly the bull camp held most of the control. In fact, with another new high for the move taking place in gold in the face of a sharp slide in equity prices and a further deterioration in economic sentiment, the gold trade seems to be locking its focus on the flight to quality and safe haven angles. With April gold managing a low to high rally on the week of roughly $41 an ounce the market certainly forged an impressive compacted run up. Surprisingly the bull camp wasn't discouraged by the fact that the US Dollar failed to weaken in the face of a significant deterioration in its economy and even more surprisingly in the face of increased US rate cut prospects.

The March silver contract forged a rather wide trading range on Friday with an approximate range of 35 cents. Without sounding like a broken record the silver market continued to mostly ignore or discount the escalating threat of US slowing. However, the threat of broad based physical commodity market liquidation was discounted somewhat by the fact that some grain prices were limit up and copper prices also finished modestly higher. Certainly the weakness in oil prices could have concerned some silver bulls, but the trade is pretty entranced with the flight to quality mantra.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Moody's says overspending threatens U.S. debt rating

The Statistics:

As of close of business: 1/10/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 Note: Change in Total Tonnes from yesterday’s data: StreetTRACKS added 2.46 tonnes and the LSE subtracted 0.55 tonnes.

COMEX Gold Trust (IAU)

 Note: No change in Total Tonnes from yesterday’s data.

Silver Trust (SLV)

 Note: No change in Total Tonnes from yesterday’s data.

The Stocks:

Golden Star’s (GSS) updated resource model, Apogee’s (APE.V) assay results, and Valencia’s (VVI.V) drill results were among the big stories in the gold and silver mining industry making headlines Friday.

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