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-- Posted Thursday, 26 June 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold retained its $5 post-fed gains in Asia and added another $5 or so in London before it spiked even higher in early New York trade and rose to find a nearly $35 gain at $914.50 by late morning.  It next fell back near $910 in afternoon trade, but it then rallied back near its high of the session into the close and ended with a gain of 3.73%.  Silver climbed roughly 2% to about $16.90 in Asia and London and then spiked to as high as $17.43 in early New York trade before it fell back off for most of the rest of trade, but it still ended with a gain of 3.81%.

Euro gold rose to about €580, platinum gained $51 to $2059.50, and copper gained roughly 4 cents to about $3.82.

Gold and silver equities rose about 4% in the first hour of trade before they pulled back to trade about 3% higher by late morning, but they then rallied to new session highs in afternoon trade and ended with about 5% gains despite roughly 3% losses in the major indices.

The Economy:

Tomorrow at 8:30AM EST brings Personal Income for May expected at 0.4%, Personal Spending expected at 0.7%, and PCE Core Inflation expected at 0.2%.

The Markets:

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

Oil rose to a new record high of $140.39 as the OPEC president says he sees oil hitting $170 thanks in large part to a weakening dollar that resumed its fall after yesterday’s fed meeting.  Supply concerns also reignited today after Libya “said it was studying options to cut output in response to possible U.S. actions against producer countries.”

The U.S. dollar index fell and treasuries rose as market participants become not only more convinced that inflation is a major problem, but also that the fed is not going to do anything about it anytime soon.

The Dow, Nasdaq, and S&P fell approximately 3% and ended AT their lows of the session on several poor earnings reports, rising oil prices, and analysts downgrades.  General Motors fell to a 53 year low as Goldman Sachs cut them to a “sell” and that brought many of the other automakers down as well.  Goldman Sachs also cut Citigroup’s and Merrill Lynch’s second-quarter estimates which increased worries about the financial sector.  All three indices fell throughout the day and broke through important support levels.

Among the big names making news in the market today were Bank of America, Citigroup, Merrill Lynch, GM, Discover, ConAgra, Anheuser-Busch, Brunswick, Lennar, and Research In Motion.

The Commentary:

“Reality is starting to set in with even the gold skeptics with today’s aggressive move higher. Gold and silver remain inexpensive and even with some more possible short-term weakness during this seasonally weaker period, the prognosis remains very bright. Monetary demand is what will skyrocket precious metal prices over the coming years as global paper currencies become increasingly suspect.

When I read comments from other seasoned gold analysts and try to understand why some continue to have generally negative bias to their forecasts, I believe their biggest problem is forecasting future prices using prior data and past biases. The dynamics of the gold and silver markets continue to change, evolve. As paper money is converted into historically sound money, the overwhelming demand will shoot prices higher. Economic and fiat money instability has and will continue to drive the evolution of this bull market ahead. We are seeing recognition of this today as reflected by the price moves in both gold and silver.”- Peter Spina, www.goldforecaster.com

“Dear CIGAs,

Boy howdy did the market waste no time in letting Ben know what it thought about the recent FOMC statement!

Gold began recovering from its yesterday morning beating minutes after the FOMC statement hit the wire yesterday afternoon and then continued moving steadily higher as trading progressed from the far East, into Europe and finally into New York in today's session. Interesting enough, the analysts were attributing gold's rise to the weaker Dollar in lieu of the FOMC but in all honesty, the Euro, while higher for the day is not all that strong compared to what we are accustomed to seeing with gold as strong as it is today. If you will notice, the Canadian, Australian and New Zealand Dollars are all weaker against the Greenback. Crude oil is up sharply higher, completely ignoring yesterday's bearish EIA numbers but the real key to gold is that the entire commodity sector is surging higher. The grains are very strong (Corn put in another all time high) as are all the various metals with the result that the CCI index made another record high this morning. Its move higher is what is helping to keep a very firm bid under the gold market and has attracted the momentum funds in a big way now that overhead resistance at $910 has been shattered. Inflation fears are first and foremost on the minds of players.

My take on this is that while the Forex markets are pushing the European currencies as well as the Yen higher, the market views the Fed's statement from yesterday as a capitulation of any attempt to talk up the Dollar. Bernanke's bluff has been called and the weakness of his hand revealed. Economic data simply will not permit the Fed to hike anywhere near as soon as many had been duped into believing by all the hawkish talk coming out of the Fed prior to the FOMC statement. That has attracted a wall of money back into commodities as an inflation hedge and is the reason why gold is so strong. Further helping gold is the horrific beating the darlings of yesterday’s stock rally, the financials, are receiving in today’s session.”-Dan Norcini, More free commentary at JSMineset.com

“August Gold finished up 32.8 at 915.1, 1.4 off the high and 12.6 up from the low.

July Silver closed up 0.622 at 17.125. This was 0.005 up from the low and 0.28 off the high.

Clearly the gold market came alive in the face of soaring oil prices, a sagging Dollar and perhaps because of rising concerns toward the US auto industry and the US financial sector. In other words, the flight to quality argument was seemingly alive in many forms during the trade Thursday but more importantly the flight to quality theme was surfacing from a number of unrelated angles. Certainly inflationary concerns off the latest return to the highs in the energy complex was a key development but given the strength in a host of physical commodity markets, one gets the sense that something bigger than mere speculation was driving the markets upward. In fact, given the pace of declines in the Dollar and the sharp slide in the US equity market, one could say that the interest in hard assets was dominating over paper assets.

Seeing a rally in excess of 75 cents in silver in a single trading session isn't an insignificant development. As in the gold market, the silver market saw a host of flight to quality and inflationary developments that seemed to aggressively pull in the buyers. Clearly the ongoing slide in the US Dollar was a major portion of the rally in the silver market, but one can't downplay the importance of the most recent recovery pulse in the energy complex on the silver trade. In conclusion, broad based buying was seen off a wide range of classic fundamental themes on Thursday.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Oil's rise is mainly dollar's devaluation, OPEC chief says

The Statistics:

As of close of business: 6/25/2008

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:

Gold Fields’ (GFI) shut mine shaft after two deaths, Paramount’s (PZG) resource increase, Taseko’s (TGB) purchased equipment, ITH’s (THM) drill results, Cardero’s (CDY) drill results, Aquiline’s (AQI.TO) scoping study, ECU’s (ECU.TO) exploration results, and SilverCrest’s (SVL.V) Pre-Feasibility 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:

Chapleau Extends Gold Mineralization 1.4 km Southeast of the Lagresia Gold Structure at Mato Velho-Brazil - More
- June 26, 2008 | Item | E-mail

Coronation Minerals Inc./Guyana Goldfields Inc.: Acquisition of Remaining 50% of Coppermine River Project - More
- June 26, 2008 | Item | E-mail

Paramount Gold & Silver Corp. Reports Substantial Resource Increase at its San Miguel Project in Mexico - "Paramount Gold and Silver Corp. (Toronto:PZG.TO - News)(AMEX:PZG - News)(Frankfurt:P6G.F - News)(WKN: A0HGKQ) has completed an updated National Instrument 43-101 compliant mineral resource estimate for its San Miguel Project, located in the Guazapares mining district Chihuahua, Mexico, within the Sierra Madre Occidental gold/silver belt." More
- June 26, 2008 | Item | E-mail

Miranda Gold Reports Red Hill 2007 Drill Results and 2008 Drill Program - More
- June 26, 2008 | Item | E-mail

Taseko Purchases $100 Million in Mining and Milling Equipment - "Taseko Mines Limited (Toronto:TKO.TO - News)(AMEX:TGB - News) ("Taseko" or the "Company") is pleased to announce that it has finalized negotiations for the purchase of the key mining and milling equipment required for the Phase III expansion at its 100% owned Gibraltar copper-molybdenum mine." More
- June 26, 2008 | Item | E-mail

The Honourable Ethel Blondin-Andrew Agrees to Join Victory Nickel's Board of Directors - More
- June 26, 2008 |