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-- Posted Tuesday, 26 August 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold and silver remained near unchanged around $820 and $13.40 in Asia before they dropped to $806.60 and $12.96 by midday in London, but they then soared higher in early New York trade and rose to as high as $830.52 and $13.715 by a little after 10AM EST.  Both metals then fell back off a bit into the close, but they still ended with gains of 0.22% and 1.46%.

Euro gold rose to about €562, platinum lost $8 to $1416.50, and copper fell over 4 cents to about $3.44.

Gold and silver equities traded mostly slightly higher and ended near unchanged.

The Economy:

New Home Inventories are still at a 10.1 month supply after falling the most since 1963 (5.2%) as builders have cut back markedly over the last several months to help add to what sales do occur.  While sales technically increased 2.4%, that was due to the fact that June’s figure was revised from 530,000 down to 503,000.  “Home prices fell a record annual 15.9 percent in June, but the monthly rate of decline slowed from May which suggested the decimated housing sector may be stabilizing, according to Standard & Poor's on Tuesday.” 

FOMC Minutes from the fed’s August 5^th meeting showed they expect inflation to moderate but fear upside risks.  Weak consumer demand, a slowing global economy, and tight credit standards also had members worried.  They continue to say they think the next move will be to raise rates, but point out they remain data dependent while such a move also relies on the health of the financial system that is still viewed as extremely fragile by many.

Also making news late in the day was the that the “number of problem U.S. banks on a regulatory watch list increased to 117 by the end of the second quarter from 90 at the end of the first quarter, the Federal Deposit Insurance Corp said on Tuesday.”

Tomorrow at 8:30AM EST brings the Durable Goods Orders report for July expected at 0.0%.

The Markets:

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

Oil rose on worries over developing Hurricane Gustav that is heading towards the Gulf of Mexico.  Forecasts call for it to hit the Gulf over Labor Day weekend, but it may track south of most oil and natural gas rigs.  Continuing instability in Russia also gave the bulls reason to buy.

The U.S. dollar index founds gains again as more grim data out of Europe sent the euro lower once more.  This time it was on weak German GDP data and because the “Ifo German business climate index in August fell more than expected to a three-year low.”

Treasuries rose as the Dow, Nasdaq, and S&P remained near unchanged and ended mixed on worries over higher oil prices and conflicting economic data.

Among the big names making news in the market today were Smithfield Foods, HP and EDS, Big Lots, Merrill Lynch, Wachovia, Corinthian Colleges, and Citigroup.

The Commentary:

“Dear Friends,

We all know now what the timetable is for revealing busted banks. It is on Fridays after 5pm.

For massive bailouts with our money the timetable is over weekends.

Last weekend GM got a $50 billion US Treasury loan for the development of electric cars and low gas consumption new era vehicles. No one really buys that as we know it is to fend off bankruptcy by GM and an attendant collapse of the credit default derivatives issued thereupon.

If GM wanted a viable electric car they need only call the Tesla Company. They have made a real car, not an overblown golf cart. This car does 0 to 60 in 5 seconds with an equally respectable 1/4 mile both in speed and elapsed time. It tops out at 125 MPH. The car is pricey as it is developed on a Lotus chassis. If produced in good numbers and put on the low level cheap GM or Ford chassis they would have what they supposedly borrowed $50 billion from the US Treasury to invent and produce.

All GM needs in order to find a way to produce a real electric car is a used laptop with an internet connection. That might cost $600.”- Jim Sinclair, JSMineset.com

“December Gold finished up 2.4 at 828.1, 6.9 off the high and 11.6 up from the low.

December Silver closed up 0.199 at 13.678. This was 0.018 up from the low and equal to the high.

After an early morning recovery of rather impressive consequence the gold market settled back down well off its highs. Seeing the Dollar generally maintain a positive tilt had to keep some would be gold buyers at bay during the Tuesday session, especially since the Dollar did forge another new high for the move. It certainly seems as if the partially supportive US economic data and the attempt to bounce in the equity market provided the gold market with a lift. However, strength in the energy complex might have lifted gold instead of the US numbers and the action in the equity market.

Despite a rather significant morning recovery, silver prices at one point fell back as far as 23 cents from their morning highs. However, with the precious metals mostly adopting a positive bias in the face of the latest US Dollar rally that would seem to suggest that silver was beginning to look beyond the recent nearly exclusive focus on the currency markets. Some players suggested that the silver markets capacity to rally on Tuesday was associated with a slight improvement in overall macro economic psychology.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Washington Post reporter gets interested

China's stealth intervention supports dollar

Credit insurance obligations cloud bailout of Freddie, Fannie

China warns U.S. against failure of Fannie, Freddie

Rob Kirby: Only a central bank could be shorting gold that much

John Lee on gold coin rationing: Where there's smoke, there's fire

Mint elaborates on gold coin rationing amid huge demand

The Statistics:

As of close of business: 8/25/2008

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:

AngloGold’s (AU) worker boycott, Timberline’s (TLR) shareholder meeting results, Rubicon’s (RBY) drill results, Solitario’s (XPL) drill results, Petaquilla’s (PTC.TO) accepted offer from Inmet (IMN.TO), and Silver Dragon’s (SDRG.OB) exploration program update 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:

Paladin looks to join top-tier uranium producers - More
- August 26, 2008 | Item | E-mail

Macusani Yellowcake Inc.: Recoveries Average 88.40% from Latest Metallurgical Tests - More
- August 26, 2008 | Item | E-mail

New Grant of Stock Options - More
- August 26, 2008 | Item | E-mail

Timberline Announces Results of Shareholder Meeting and Provides Corporate Update - "Timberline Resources Corporation (AMEX:TLR - News) today announced results of its 2008 Annual Meeting of Stockholders, held on August 22, 2008 in Coeur d'Alene, Idaho. The Company received overwhelming approval for all proposals submitted to stockholders, including the election of its Board of Directors and the proposed acquisition of Small Mine Development, LLC (``SMD'')." More
- August 26, 2008 | Item | E-mail

Great Panther Expands Molybdenum Discovery at Mapimi - More
- August 26, 2008 | Item | E-mail

Pele Mountain Assembles Team of Uranium Industry Leaders to Develop Eco Ridge Mine at Elliot Lake - More
- August 26, 2008 | Item | E-mail

Nickel Mineralization Discovered at Phillips Project - More
- August 26, 2008 | Item | E-mail

Petaquilla Copper accepts sweetened Inmet offer - "Petaquilla Copper (PTC.TO: Quote, Profile, Research, Stock Buzz) has accepted a sweetened C$350 million ($336 million) takeover offer from Inmet Mining (IMN.TO: Quote, Profile, Research, Stock Buzz), clearing the way for Inmet to acquire the majority of the massive Petaquilla project in Panama, the companies said." More
- August 26, 2008 | Item | E-mail