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-- Posted Wednesday, 20 February 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold fell to as low as $913.40 by about 9AM EST in New York, but it then rallied fiercely higher over the next 4 hours of trade, made an intraday high of $936.15, and closed with a gain of 0.85% at a new record closing high.  Silver fell to $17.173 before it rose to as high as $17.75 and closed with a gain of 1.26% at a new 27 year high. 

At the time of writing, both metals have continued to gain in after hours access trade and have set new record and 27 year intraday highs with roughly 1% further gains from their 1:30PM EST COMEX closes at as high as $945.80 and $17.84 by 4:30PM EST.

Euro gold rose to about €636, platinum fell $20 to $2120, and copper fell a couple of cents to about $3.71.

Gold and silver equities steadily rose for most of trade and ended with about 2% gains.  The three major mining indices (XAU, HUI, GDM) sit roughly 3-5% from making new record highs of their own.  Previous record high closes were set on January 14^th, 2008.

The Economy:

FOMC minutes from the fed’s January 30^th meeting showed they feel downside risks remain even after their 50 basis point cut that day, but they also discussed a rapid reversal of the rate cuts should economic indicators turn around into more positive territory.  They defended the 75 basis rate cut after their emergency January 21^st meeting as necessary to align the real policy rate with the weakening economy.  Also announced was a previously undisclosed conference call on January 9^th that resulted in no public action.

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 2/16 expected at 345,000.  At 10AM is the Leading Economic Indicators report for January expected at -0.1% and the Philadelphia Fed survey expected at -10.0.

The Markets:

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

Oil fell in early trade on profit taking after yesterday’s record run, but it came back to find a decent gain by the close as supply concerns in Nigeria and Venezuela remain and traders also prepared for tomorrow’s inventory reports.  The March contract rose to as high as $101.32 before it closed out at a new record high of $100.74.  Tomorrow begins the use of the April contract as the most forward contract and it is currently trading about $1 below the March contract.

The U.S. dollar index rose and treasuries fell in early trade as CPI came in higher than expected and reduced the possibility that the fed will continue to cut interest rates, but those gains and losses pared in later trade in anticipation of, and on confirmation of, FOMC minutes released late in the day that showed the fed will likely continue to cut rates.

The Dow, Nasdaq, and S&P fell in morning trade on inflation worries, but they also reversed course midday and ended with decent gains on expectations the fed will continue to cut interest rates despite higher than expected CPI as FOMC minutes ignored inflation worries for the most part and instead focused on the fact the fed feels downside risks remain.

Among the big names making news in the market today were 3Com and Bain, Sharper Image, and Host Hotels.

The Commentary:

“April Gold finished up 8 at 937.8, 1.6 off the high and 21.3 up from the low.

March Silver closed up 0.252 at 17.76. This was 0.54 up from the low and 0.01 off the high.

Despite some early weakness in the wake of a Dollar rally and somewhat soft US Housing Starts and Permits data, April gold managed to recover in the afternoon action and take out the prior session's highs. Apparently seeing active two sided trading action in the energy markets provided the bulls with a fresh buying impetus but it is also possible that a late bounce in the grain markets provided the gold market with an added lift. Perhaps the gold and silver markets were lifted by comments from the Fed's Poole who once again suggested that the US would avoid a recession but the market might have really embraced suggestions from Poole that Food and Energy prices might be setting inflation "trends".

The silver market clearly performed better than gold for most of the session. In fact, the silver market managed to climb back into positive ground well ahead of gold and then added to the gains in the afternoon action. Certainly the silver market benefited from the revived inflationary concerns seen in the wake of the US CPI report but it would also seem like a later recovery bounce in oil and grain prices contributed to the bounce in silver prices. Apparently silver wasn't held back by weakness in platinum and copper prices or by the slightly disappointing US Housing readings released early in the trading session.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Nigerian states support discontinuing payment in dollars

Driving to the gold rush in Mexico

Ted Butler: Deep into the danger zone

The Statistics:

As of close of business: 2/19/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

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

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:

Agnico Eagle’s (AEM) fourth quarter results, Almaden’s (AAU) 2007 review, Anatolia’s (ANO.TO) president and CEO appointment, Anglo American’s (AAUK) profit, Canyon’s (CAU) optioned properties, Seabridge’s (SA) resource estimate, Newmont’s (NEM) mining contract in Indonesia, Silver Standard’s (SSRI) note offering, Pan American’s (PAAS) increased reserves, ECU’s (ECU.TO) drill results, and Silverstone’s (SST.V) sales and forecast were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

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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:

Agnico-Eagle reports record fourth quarter 2007 results - "Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") today reported record quarterly net income of $65.2 million, or $0.46 per share for the fourth quarter of 2007. This result includes a gain of $29.8 million, or $0.21 per share, on the reduction of income tax rates. In the fourth quarter of 2006, the Company reported net income of $41.9 million, or $0.35 per share." More
- February 20, 2008 | Item | E-mail

Silver Standard Offers US$120 Million of Convertible Notes - "Silver Standard Resources Inc. ("Silver Standard") (Toronto:SSO.TO - News)(NasdaqGM:SSRI - News) announced today a proposed offering of approximately US$120 million aggregate principal amount of senior unsecured convertible notes due February 2028 (the "Convertible Notes") pursuant to private placement exemptions. Silver Standard expects to grant the initial purchasers in the offering a 30-day option to purchase up to an additional US$18 million principal amount of Convertible Notes." More
- February 20, 2008 | Item | E-mail

Portage Minerals Announces the Appointment of Andres Tinajero as CFO - More
- February 20, 2008 | Item | E-mail

First Narrows Provides Update on Exploration Activities in Sonora, Mexico - More
- February 20, 2008 | Item | E-mail

2007 Year Review of Almaden's Canadian Activities - "2007 was a very busy year for Almaden Minerals Ltd. ("Almaden" or "the Company") (Toronto:AMM.TO - News)(AMEX:AAU - News) with active exploration on multiple projects in Canada. The Company conducted a drill program on its wholly owned Elk Gold project, British Columbia the results from which have already been released (see Almaden news release of January 18, 2008)." More
- February 20, 2008 | Item | E-mail

Chapleau Resources Drilling Demonstrates Potential for Major Copper-Gold Porphyry at La Yegua, Peru - More
- February 20, 2008 | Item | E-mail

Newmont Declares Regular Quarterly Dividend - "The Board of Directors of Newmont Mining Corporation (NYSE: NEM - News) today declared a regular quarterly dividend of $0.10 per share, payable March 28, 2008 to holders of record at the close of business on March 7, 2008." More