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-- Posted Tuesday, 18 March 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold fell to $997.50 by late trade in Asia before it rose about 1% to as high as $1012.40 in early New York trade and then fell back off into the close, but it still ended with a small gain of 0.16% at a new record closing high.  Gold has since sold off in after hours access trade in response to the fed’s policy statement and at the time of writing (4PM EST) is trading with a loss of over 2%.

Silver rose to $20.423 and fell to $19.84 before it closed out COMEX trade with a loss of 1.7%, but it has also sold off over 2% in after hours access trade.

Euro gold fell to about €635, platinum lost $20 to $1990, and copper gained nearly 6 cents to about $3.77.

Gold and silver equities traded just slightly lower in morning trade, but they then steadily sold off after the fed’s statement and ended with roughly 4% losses.

European central banks sell just 2 tonnes of gold sales last week  Resource Investor

The Economy:

The federal reserve cut the fed funds rate by 75 basis points to 2.25% and cut the discount rate by 75 basis points to 2.5%.  They noted that inflation has been elevated and uncertainty over the inflation outlook has increased, but they also expect it to moderate over coming quarters.  They also stated that financial markets remain under considerable stress and downside risks to growth still remain.  Basically it seems that the fed is more concerned than before about both slowing economic growth and rising inflation, but they allocated a large paragraph in their statement to inflation and inflation expectations that was not there before and this likely led them to cut by just 75 basis points rather than the widely expected cut of 100 basis points.  They did however also leave the door open for more cuts at future meetings, scheduled or otherwise.  The FOMC voted 8-2 in favor of the decision with Plosser and Fisher dissenting and calling for a smaller cut due to inflation concerns.  Text of FOMC statement  There are no major economic reports scheduled tomorrow.

The Markets:

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

Oil surged back over $3 higher today after yesterday’s huge loss of $4.53 as recession worries eased and brought demand expectations higher from yesterday’s gloomy outlook.

The U.S. dollar index rose markedly after the fed cut rates by only 75 basis points.

Treasuries fell before the fed’s announcement after yesterday’s large gains and they fell even more after the fed’s announcement that cut rates by just 75 basis points rather than the 100 basis points widely expected in the bond pits.

The Dow rallied as much as 300 points in morning trade and the Nasdaq and S&P followed suit on better than expected earnings reports from Lehman Brothers and Goldman Sachs that eased the financial worries raised over Bear Stearns the past week.  All three indices initially pared their gains following the fed’s statement, but they soon rose to new highs on the day and ended with over 3% gains.

Among the big names making news in the market today were Yahoo and Microsoft, Lehman Brothers, Goldman Sachs, Delta Air Lines, Visa, and Exxon Mobil.

The Commentary:

“April Gold finished up 1.7 at 1004.3, 8.7 off the high and 3.3 up from the low.

May Silver closed down 0.34 at 19.96. This was 0.01 up from the low and 0.54 off the high.

The gold market showed initial strength in the wake of a relief rally in the US equity market, as the trade seemingly moderated its fears of too much slowing in the wake of the early stock market action. However, the gold market seemed to fade as the session progressed and clearly gold appeared to be disappointed in the magnitude of the US Fed's rate cut but the real aggressive selling in gold came in close proximity to another pulse up in equity prices. Not surprisingly the Fed remained concerned about the ongoing threat of inflation and that could have supported the gold market, but instead gold weakened. Perhaps the gold market was being undermined by ideas that lower interest rates were at least temporarily poised to reduce the amount of financial market uncertainty facing the markets. It goes without saying that the bounce in the Dollar in the wake of the FOMC decision served to add to the selling pressure in the gold market on Tuesday afternoon.

The silver market saw some initial support from the gains in gold, copper and platinum. However, the silver market was the first metals market to turn negative on the session before the FOMC result really turned up the selling pressure. News of increased scrap supply flow onto the world market combined with some general long profit taking seemed to undermine and add to the downside tilt. While the silver market hasn't paid that much attention to the physical supply flow news lately, the fact that gold came under pressure and the Dollar bounced might have forced the market to embrace some of the classically negative fundamental developments.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Ted Butler: Life after Bear Stearns

U.S. Global's Holmes sees gold zigzagging to $2,000

'Strong euro' is only weak dollar, ECB board member says

Fed rallies Wall Street to aid ailing Lehman Brothers

Gretchen Morgenson: Rescue me -- Fed bailout crosses a line

Rescuing dollar raises potential policy tug-of-war

Banks want five times the emergency cash offered by Bank of England

Paulson wants 'strong dollar' but will world prop it up?

The Statistics:

As of close of business: 3/18/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 Note: Change in Total Tonnes from yesterday’s data: StreetTRACKS added 10.43 tonnes to a new record high holding and the JSE added 0.24 tonnes.

COMEX Gold Trust (IAU)

 Note: Change in Total Tonnes from yesterday’s data: 0.31 tonnes were added to the trust.

Silver Trust (SLV)

 Note: Change in Total Tonnes from yesterday’s data: 77.05 tonnes were added to the trust.

The Stocks:

Power cut threats in South Africa, Almaden’s (AAU) drilling, Keegan’s (KGN) drilling, Paramount’s (PZG) assay results, Exeter’s (XRA) drill results, IAMGOLD’s (IAG) drill results, Coeur’s (CDE) exercised over-allotment option, Fury’s (FUR.V) warrant exercise, and Scorpio’s (SPM.TO) drill results 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:

CanAm Uranium Announces Airborne Survey Results and Interpretation - More
- March 18, 2008 | Item | E-mail

Drilling Underway at the ATW Diamond Project, Canada - "Almaden Minerals Ltd. ("Almaden", "the Company") (Toronto:AMM.TO - News)(AMEX:AAU - News) is pleased to announce that a sonic, overburden drill program is now underway on the Company's ATW diamond project, North West Territories ("NWT"), Canada. Almaden and Williams Creek Explorations Ltd. ("Williams Creek") each own an approximately 41 1/2% interest in the project." More
- March 18, 2008 | Item | E-mail

Laurion announces drill targets identified from recently completed geophysical surveys on both the Lydian and German properties, Timmins, Ontario. - More
- March 18, 2008 | Item | E-mail

Marifil Mines Clarifies Last News Release - More
- March 18, 2008 | Item | E-mail

Wesdome Gold Mines Ltd. - Wesdome announces 2007 year end reserves and resources - More
- March 18, 2008 | Item | E-mail

Eoin Rothery appointed director of Pebble Creek - More
- March 18, 2008 | Item | E-mail

Nithi Mountain Metallurgical Program - More
- March 18, 2008 | Item | E-mail