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-- Posted Wednesday, 16 January 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold fell over $20 to $878.08 by early trade in London and then rallied back near unchanged to as high as $897.20 by about 10AM EST in New York before it fell to a new low of $876.70 by late morning, but it then rallied back higher into the close and ended over $4 off that low with a loss of 2.19%.  Silver fell to $15.67 and rose to $16.14 before it fell back to $15.727, but it also bounced higher into the close and ended off its low with a loss of 2.59%.

Euro gold fell to about €601, platinum lost $17 to $1559, palladium lost $7 to $371, and copper fell nearly 7 cents to about $3.17.

Gold and silver equities fell over 5% by late morning before they rebounded to find only about 3% losses by early afternoon, but they then fell back off into the close and ended with over 4% losses.

The Economy:

The Fed's Beige Book noted an economy that expanded modestly, but at a slower pace than the slow pace noted last time.  Tighter credit standards, moderate wage increases, a weaker dollar, and weak residential AND commercial real estate were among the other highlights that in the end did not change the outlook for a 50 basis point rate cut at the fed’s next meeting as inflation did not appear to be an issue while slow economic growth was in the mid-November to mid-December time frame referenced.

Tomorrow at 8:30AM EST brings Housing Starts for December expected at 1,150,000, Building Permits expected at 1,140,000, and Initial Jobless Claims for 1/12 expected at 335,000.  At noon is the Philadelphia fed survey for January expected at -1.5.  Bernanke also testifies before the House Budget Committee tomorrow.

The Markets:

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

Oil fell all the way to under $90 after inventory data came in even better than expected, but it did end well of its lows with a loss of only about a dollar on speculation that the recent correction from $100 a couple of weeks ago may be overdone.  Crude inventories built 4.3 million barrels, gasoline inventories built 2.2 million barrels, and distillates built 1.1 million barrels, but refinery utilization surprisingly fell 4.2% to 87.1% to add at least one bullish note to the report.

The U.S. dollar index did not react much to CPI or Net Foreign Purchases data, but it then took off to find decent gains after an European Central Bank governor said that the ECB may revise its growth forecast lower which in turn shifted expectations for the ECB from holding rates steady to perhaps joining the fed in cutting rates.

Treasuries rose in early trade as the major indices fell markedly again, but bonds then fell back off and ended lower as economic data was not that bad overall and the major indices came back to end only modestly lower after traders debated disappointing results from Intel and the fed’s next action.

Among the big names making news in the market today were Boeing, Oracle and BEA, JPMorgan, Ambac, Wells Fargo, and Intel.

The Commentary:

“Today's weakness in gold and strength in the dollar are products of expectations that the Fed would drop rates by Emergency Action today. Talking heads on CNBC fed that rumor. When it did not occur as predicted today the suffering bearish gold interest took that non-event as a tool to hammer gold down and run weak shorts out of the dollar.

Absolutely nothing has changed. There isn't a snowball's chance in hell that housing will improve, the derivative meltdown will stop, the dollar will do anything but short cover or the Fed will fail to drop rates.

Gold will again in the near future cross $887.50 and $900 on its way to $1050 and then $1650…”- Jim Sinclair, JSMineset.com

“February Gold finished down 20.6 at 882, 16.2 off the high and 7 up from the low.

March Silver closed down 0.405 at 15.895. This was 0.085 up from the low and 0.355 off the high.

The magnitude of the rise in the US Dollar seemed to be the main theme for the gold bears on Wednesday. However, with initial steep losses in the stock market, sharp gains in the US Dollar and another noted key downside technical failure in the energy complex it is also possible that broad based speculative technical liquidation added to the prevailing weakness in gold prices. With the liquidation pressure spreading even into the grain markets and soft commodity markets, one gets the sense that the deterioration in the US economic outlook is spreading throughout the marketplace.

Around the lows on Wednesday, the March silver contact reached back down to the vicinity of a couple prior closing values of $15.81 and $15.83. Like the gold market, the silver market also came under what seemed to be moderate technical liquidation pressure. Also like gold, a strong Dollar and weak US economics seemed to inspire spec liquidation. At least in the near term, the silver market looks content to take its lead from the US equity market and the US Dollar.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Ted Butler: Danger zone

The Statistics:

As of close of business: 1/15/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

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

COMEX Gold Trust (IAU)

 Note: Change in Total Tonnes from yesterday’s data: 0.92 tonnes were added to the trust.

Silver Trust (SLV)

 Note: Change in Total Tonnes from yesterday’s data: 138.78 tonnes were added to the trust.

The Stocks:

ITH’s (THM) stock options, Almaden’s (AAU) exploration updates, Kinross Gold’s (KGC) project updates, NovaGold’s (NG) new management team for Galore Creek, Ivanhoe’s (IVN) and Entree’s (EGI) drill results, Excellon’s (EXN.V) corporate update, South American Silver’s (SAC.TO) drill results, Penoles’ (PENOLES.MX) mine strike, Continuum’s (CNU.V) and Fortuna’s (FVI.V) drill results, and Avino’s (ASM.V) drilling were among the 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.

All of today's gold and silver stock news:

Pele Mountain Announces Option Grant - More
- January 16, 2008 | Item | E-mail

Excellon Corporate Update - "The Company has learned that workers at Penoles Naica Mine went on strike on Tuesday in a pay dispute. The Company understands that Penoles normally has good relations with its workers and unions, and that strikes at its mines and smelters are not that common. Penoles has said that it will continue to try and reach a pay agreement with the union. The Company understands that, for the duration of the strike, the Naica mill, to which the Company currently sells the production from its Platosa test mine, will be unable to accept any further shipments from Platosa. The Company is of the view that a strike of short duration will not materially affect the Company's operations, but that a prolonged strike could have a material adverse effect on its cash flow from operations. If it appears that the strike will be prolonged, the Company will take appropriate steps to reduce its operations and thereby conserve its cash resources." More
- January 16, 2008 | Item | E-mail

UNOR Announces Cameco Financing - More
- January 16, 2008 | Item | E-mail

Chile sees shiny gold mining outlook - "Chile, best known in mining circles for its bountiful copper supplies, expects to become a top 10 gold producer early in the next decade as giant new mines start up, a state mining think-tank said on Wednesday." More
- January 16, 2008 | Item | E-mail

ITH Grants Incentive Stock Options - "International Tower Hill Mines Ltd. ("ITH" or the "Company") - (CDNX:ITH.V - News)(AMEX:THM - News)(Frankfurt:IW9.F - News) is pleased to announce that, pursuant to its 2006 Incentive Stock Option Plan, it has granted incentive stock options to certain directors, officers and employees allowing them to purchase up to an aggregate of 190,000 common shares in the capital stock of the Company. The options are exercisable at a price of CAD 1.52 for a period of two years ending January 16, 2010." More
- January 16, 2008 | Item | E-mail

Mantis Mineral Corp. identifies significant Ni-Cu-Zn-Pb soil geochemical anomalies on Oke, Ontario Project - More
- January 16, 2008 | Item | E-mail