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-- Posted Tuesday, 19 August 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold and silver fell over 2% in Asia and rebounded back near unchanged in London before they rose to find over 1% gains at $814.90 and $13.337 by about noon EST in New York.  Both metals then fell back off a bit in afternoon trade, but gold still ended with a gain of 1.36% while silver ended unchanged on the day.

Euro gold rose to about €549, platinum lost $35.50 to $1352.50, and copper gained over eleven cents to about $3.43.

Gold and silver equities rose over 3% by early afternoon before they fell back off slightly into the close, but they still ended with over 2% gains.

The Economy:

The fed’s Lacker today called for a Core year/year inflation rate of 1.5% which is even less than the fed’s earlier stated target of 2.0% y/y and far below the y/y core rate of 3.5% reported today.  The fed’s Fisher said that the Fed should remain "poised" to hike rates if slowing growth fails to contain inflation pressure and also said that he did not regret dissenting from other fed members at past meetings in calling for higher interest rates than the rest of the members.  While both of these comments seem hawkish, there are several who think that raising interest rates will do nothing to help contain inflation and still others who think that listening to fed members is a fairly useless exercise to begin with.  Watch what they do instead.  There are no major economic reports due out tomorrow.

The Markets:

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

Oil fell in early trade as Tropical Storm Fay hit Florida and did not hit operations in the Gulf of Mexico, but prices turned higher in late trade on geopolitical concerns between NATO and Russia as a forecast also surfaced for Fay to possibly turn Northwest and impact operations after all.

The U.S. dollar index had an outside day of a higher high and a lower low which could signal a technical reversal of its recent trend higher.  Evidence of high inflation with the fed inept to do anything about it also dragged treasuries lower on the day.

The Dow, Nasdaq, and S&P fell on more financial concerns and inflation worries as PPI came in higher than expected and fed comments were less than soothing.

Among the big names making news in the market today were Home Depot, General Dynamics and Jet Aviation Management, Medtronic, Intel, Lehman Brothers and JPMorgan, and Merck.

The Commentary:

“Dear CIGAs,

Do you read headlines like the following concerning similar serious bank failures in Euroland? According to public figures on losses, the FDIC has $38 billion in capital to work with. There are problems in Euroland, of course, but do you really believe they will catch up to the US in the race to currency worthlessness?

Do you think the Fed has room to raise rates? Such an event would drop the Dow like a rock in a matter of days, killing whatever is left of a down trending US economy.

According to a retired IMF economist, a MAJOR US bank is in trouble. IS this your bank? None of us can know. Does your bank or financial agent have a relationship with this supposed institution that will cause your financial agent injury?

You should understand that all the media tricks being played to influence a bully market populated by the Hedgies has but temporary influence. You must understand that there is NO synthetic short in the dollar position because who on earth is rushing for dollars to pay off debts? It is a failure to meet debt obligations which today means non-functioning OTC derivatives that is the definition of DEFLATION. This is gold positive in a big way.

Are you, as practically as possible, distanced from your financial agent?

If you are not, please, do the necessary.”- Jim Sinclair, JSMineset.com

“December Gold finished up 11.1 at 816.8, 3.2 off the high and 24.8 up from the low.

September Silver closed up 0.005 at 13.105. This was 0.355 up from the low and 0.185 off the high.

The gold market managed an impressive pulse up trade after seeing initial weakness early in the trading session. In fact, the gold market actually managed to return to the vicinity of the August spike low early in the session, but prices seemingly recoiled up and away from that level quickly. However, with the US Dollar failing to rally in the face of hawkish US Fed comments and in the face of patently inflationary US PPI readings, it is possible that the bullish Dollar outlook was called into question. Clearly the gold bulls had some mid morning help in their case as oil prices sprang to life off a North American refinery glitch.

The silver market managed to throw off early weakness and at times prices were as much as 63 cents an ounce off its early lows. Seeing a sharp rebound in copper prices seemed to provide silver with an additional lift, especially since some traders suggested that the bounce in copper might have been the result of physical value hunting buying. Some traders suggested that the bounce in energy prices prompted spec and fund buying of physical commodities like silver, gold and the grains and therefore it is possible that some of the strength in the market toward was attributable to broad based buying interest.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Is gold demand soaring or plunging?

CMRE's October meeting examines the financial crisis

Sharp contraction in money supply points to Wall Street crunch

David Bond: Let's be Hunts

Ted Butler: Lessons of a lifetime

The Statistics:

As of close of business: 8/18/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: The JSE subtracted 0.99 tonnes.

COMEX Gold Trust (IAU)

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

Silver Trust (SLV)

Note: Change in Total Tonnes from yesterday’s data: 76.87 tonnes were added to the trust.

The Stocks:

Aurelian’s (ARU.TO) drill results, Fronteer’s (FRG) discovery, Banro’s (BAA) drill results, Anatolia’s (ANO.TO) permit, Angolplat’s (AMSJ.J)worker deaths, Lihir’s (LIHR) fiscal 2008 results, Fortuna’s (FVI.V) drill results, Fresnillo’s (FRES.L) first-half profits, and Starling’s (SRLM.OB) lawsuit 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:

Duran Ventures Terminates Option on JD Property in BC to Focus on Aguila and Pasacancha Project in Peru - More
- August 19, 2008 | Item | E-mail

Significant Land Package Optioned Adjacent to U.S. Gold Corp. Project - More
- August 19, 2008 | Item | E-mail

GoldSpring Renews Reclamation Permit for Comstock Lode Property - More
- August 19, 2008 | Item | E-mail

Vena Resources Closes Private Placement - More
- August 19, 2008 | Item | E-mail

Victory Nickel Announces Offer for Independent Nickel - More
- August 19, 2008 | Item | E-mail

Skye Resources Securityholders Approve Business Combination With HudBay Minerals - More
- August 19, 2008 | Item | E-mail

American Uranium Acquires Interest in Nu Star Exploration's Arizona Strip Claims - More
- August 19, 2008 | Item | E-mail

Canadian Royalties Appoints an Interim Chief Financial Officer -