-- Posted Monday, 8 August 2011 | | Disqus

The Metals:

Gold rose to a new all-time high of $1714.88 in Asia before it retraced back to $1691.15 at about 10AM EST, but it then rose to a new record high of $1718.79 by early afternoon in New York and ended with a gain of 3.24%.  Silver climbed to as high as $40.32 in Asia before it dropped back to $38.42 by late morning in New York, but it then rallied back higher in the last couple of hours of trade and ended with a gain of 2.53%.

Euro gold climbed to a new record high at about €1205, platinum gained $4.75 to $1716.75, and copper fell over 15 cents to about $3.96.

Gold and silver equities rose roughly 3% by midday, but they were then dragged lower by general market weakness in afternoon trade and the HUI and GDM closed near unchanged while the XAU ended with a modest loss.

The Economy:

S&P downgrades U.S. credit rating - S&P announced Friday night that it has downgraded the U.S. credit rating for the first time (Lowering the nation’s rating to one notch below AAA), dealing a symbolic blow to the world’s economic superpower.  Washington Post

US debt downgrade could mean rate hikes for all  Yahoo

Obama says U.S. remains 'AAA country'  latimes

S&P's Beers: No 2nd thoughts on US downgrade  Yahoo

Moody's says U.S. needs to find more deficit cuts  Reuters

G-7 Seeks to Calm Investor Fear After World Stock Selloff  Bloomberg

Gross Praises S&P’s ‘Spine’ as Buffett Says Rating Company Erred  Bloomberg

China tells U.S. "good old days" of borrowing are over  Reuters

U.S. Loses AAA Rating on Concern About Debt Cuts  Bloomberg

The ECB announced plans to intervene in the bond markets and buy Spanish and Italian debt, but doubts remain about whether or not that is the appropriate step to take.

“The European Central Bank’s move to buy Italian and Spanish bonds to tame the region’s debt crisis marks a step toward the kind of fiscal union that Germany has opposed since the founding of the single currency.

While investors and economists say tighter fiscal ties and increased transfers to the financially weak euro states will be needed to end the financial contagion, purchases of Italian and Spanish debt that Royal Bank of Scotland Group Plc estimates may eventually reach 850 billion euros ($1.2 trillion) threaten fresh political fault lines.”

Tomorrow at 8:30AM EST brings second quarter Productivity expected at -0.6% and Unit Labor Costs expected at 2.2%.  At 2:15PM is a FOMC Rate Decision.

The Markets:

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

Oil fell over 6% on S&P’s credit rating downgrade.

The U.S. dollar index rose as the euro fell on Europe’s debt problems.

Treasuries rose markedly as the Dow, Nasdaq, and S&P dropped over 5% more on worries about S&P’s downgrade and Europe’s debt problems.

Among the big names making news in the market today were Fannie Mae, Freddie Mac, Bank of America, Tyson, Verizon, and AIG.

AIG sues BofA for $10 billion over "massive fraud"  Reuters

The Commentary:

“The bond market has voted and given its assessment of the S&P downgrade of US long term debt  -  investors are not only willing to buy and hold US Treasury debt but they are willing to buy and hold that debt at even lower rates of interest than going into the downgrade. Risk is trumping all right now and investors are running out of nearly everything out there except for gold and Treasuries. Even silver has been feeling the impact of risk aversion trades as it has surrendered a large part of its gains as the collapsing copper and equity markets are pulling the grey metal from its highs while safe haven bids are bringing it support.

One normally expects to see interest rates rise after a downgrade but such is the current environment that investors are rushing into cash and into gold. It would seem that gold is finally getting the due respect it deserves after being constantly harangued as "no safe haven" by far too many talking heads who confuse liquidity driven issues with fundamentals. I marvel at the obtuseness of some who just last week were trashing the metal for being "no safe haven" on a day in which equities were getting hit hard and investors were rushing to get liquid and meet margin calls. Never mind the fact that gold had been making one record high after another across a wide variety of currencies. Never mind that as the sovereign debt crisis in Euroland escalated, more and more buying of gold was occurring. All that mattered was we had a huge selloff in stocks last Thursday so out were trotted CNBC's "experts" on the gold market who pronounced it as "no safe haven" because it was being sold to meet margin calls.

Today, those nitwits are looking very stupid indeed because now the talk is that "gold might be the last safe haven available". Gee, what a surprise - 6,000 years as a currency finally does matter. My oh my what a difference a day or two can make. Let me guess - these same "experts" will now be trotted back out to tell us why gold is such a great safe haven - and they can do this without blushing!

Gold gapped higher from the get go last evening as it opened above strong resistance at $1,680 and never looked back. Anytime you see a "gap and go" above a strong chart resistance level, you know you have something impressive occurring. That is exactly what has happened in the gold market as it has left $1680 resistance in the dust and blown right through psychologically significant resistance at $1,700. As I write this, it has set a new record high of $1,721.90 and is up over $66. If global equity markets do not soon stop the bleeding, these $60 up days could soon become $100.

Further aiding the metal's upside progress is the long awaited divorce of the mining shares from the broader US equity markets. The HUI in particular is having a strong day, up 4.6% at 551 as I write this while the XAU is up 2.82% at 201.59. The HUI must get through last week's high up near 570 to have a shot at taking on critical chart resistance at 580 once again. If we get some further short covering from the hedge fund ratio spread trade, that should occur rather easily. That trade makes increasingly less sense as gold powers on towards one record high after another, especially given the already severe undervaluation of the gold shares in comparison to the metal itself. If they insist on doing a spread trade why not buy the miners and short the broader equity markets. That was has been a winner for more than a month now. If the hedge fund managers could wrap their mind around this trade, the miners would make new all time highs in short order.

I think it is important to note the price action in the Continuous Commodity Index (CCI). Now that we have a few months of price action to observe we can get a sense of the shift in investor sentiment towards the overall sector. Back in March, when the earthquake and tsunami struck Japan, commodities were sold down as investors rushed out of risk. The thinking was that the blow would result in slower overall growth globally. Traders then reassessed that view and pushed prices back right up to the old high. Later in April, once the index was unable to push through the former peak in price and go on to make another high, technicians sold and fundamentalists built the case that the slowdown in global growth would lessen prospects for further gains for the sector. Since that time, price has been on a rather slow grind to the downside. Based on this chart, the case can be made from a technical standpoint that unless or until the sector pushes past 660, inflation fears are no longer foremost in traders' minds. The current thinking is that RECESSION is more likely than INFLATION. That view in commodities is being reinforced from the bond pits as well.

Gold is now in an acceleration phase as it continues moving with a new and steeper uptrending channel. Given the huge speculative flows into this market, it will remain quite volatile as traders pay increasing attention to any market moving news and react according to their interpretation of that news. What that means for those who hold the metal, is that they should expect large price swings on a day to day basis. Also look for a margin hike increase very soon coming out of the CME Group for the metal as it is precisely this sort of volatility that triggers such increases.

We have several levels of downside support should we get any sort of pullback or retracement in price. The first is $1,680, followed by $1,650 - $1,644 and then by $1,620.

Silver needs to get above $40 and stay there. It just cannot hold that level as it is unable to shrug off its industrial metal hat to the point where safe haven or monetary related flows can keep it elevated. Downside support in silver is last week's low near $37.50 and then $36.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

GATA Posts:

U.S. could run off with other nations' gold, Rickards tells CNBC

Chris Powell: Who will put the gold questions to central banks?

MineWeb's Lawrence Williams reports on GATA's London conference

Jim Sinclair is interviewed by GoldMoney's James Turk

GATA's London conference draws nearly 400 from 38 countries

The Statistics:

Activity from: 8/04/2011

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

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

COMEX Gold Trust (IAU) Total Tonnes in Trust: 160.95: +0.43 change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,010.45: No change from yesterday’s data.

The Miners:

Goldcorp’s (GG) dividend, Claude’s (CGR) metallurgical and engineering results, Timberline’s (TLR) third quarter results, Coeur’s (CDE) second quarter results, Hecla’s (HL) project developments, and Silver Wheaton’s (SLW) dividend and second quarter 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:

African Queen Closes $2.4 Million Private Placement - More
- August 08, 2011 | Item | ShareThisShareThis

Puget Ventures Inc. Receives Conditional Approval for Graduation to the Toronto Stock Exchange - More
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St. Augustine Gold and Copper Ltd.: Chief Financial Officer Resigns - More
- August 08, 2011 | Item | ShareThisShareThis

Cassius Ventures Ltd. Announces Termination of Carrot River Agreement in Order to Focus on Development of the Nicaragua Gold Properties - More
- August 08, 2011 | Item | ShareThisShareThis

Orezone Expands Bombore Gold Project Area 60% With New Permit - More
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Andover Ventures Announces SEDAR Filing of Resource Estimate for Burgin Extension Deposit, East Tintic Mining District, Utah, USA - More
- August 08, 2011 | Item | ShareThisShareThis

Golden Phoenix Completes Initial Due Diligence Period on Santa Rosa Gold Mine; Begins Finalizing Definitive Joint Venture Agreement - More
- August 08, 2011 | Item | ShareThisShareThis

Victory Nickel Identifies Western Extension of Nose Deposit at Minago - More
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Mineral Mountain Resources Ltd. Joins OTCQX - More
- August 08, 2011 | Item | ShareThisShareThis

Diamonds North Begins Diamond and Gold Exploration at Amaruk - More
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Volta Files Updated NI 43-101 Technical Report on the Kiaka Gold Project - More
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Goldstone Shareholders Approve Acquisition by Premier Gold - More
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Globex Drills 5.23% Cu and 13.12% Zn Over 4.5 Metres at Tonnancour - More
- August 08, 2011 | Item | ShareThisShareThis

Alto Group Holdings Announces Expansion of Excelsior Mining Project - More
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Viper Gold Stakes Property Near Timmins, Ontario, Canada - More
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Centamin Egypt Closes Recommended Cash Offer for Sheba Exploration (UK) Plc - More
- August 08, 2011 | Item | ShareThisShareThis

MAX completes soil sampling and additional drilling at Majuba Hill copper/silver project in Nevada - More
- August 08, 2011 | Item | ShareThisShareThis

PBX Continues to Drill More Copper in Copaquire, Chile - More
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Solomon Stakes Additional Pacer Claims in Southwest Yukon; Exploration Crews Mobilize to Outpost Claim Group - More
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Augyva Announces Change to the Board of Directors - More
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Williams Creek Gold Limited Reports Additional Results from Its Phase I Drilling Program on its Barkerville Property - More
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Arco Retains Micon International to Write 43-101 Reports - More
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Altius Minerals Corporation (TSX: ALS) Reports an Expanded Exploration Alliance With Cliffs Natural Resources - More
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St. Eugene Reports 90% Gold Recovery and Up to 93% Silver Recovery at Amisk Joint Venture - More
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Metanor Resources Inc.: Granting of an Option - More
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Teryl Resources Corp. Announces Drill Program to Commence on 100% Owned Westridge Property, Fairbanks, Alaska - More
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AmeriLithium Announces August 15th Exploration Start Date for Clayton Deep Lithium Brine Project - More
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Invenio Begins Exploration on Candle Hills Gold Property - More
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Integra Gold Corp. Senior Vice President Appointed - More
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Luna Gold Corp. Reports Operational and Financial Results for the Three and Six Months Ended June 30, 2011 - More
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Oro Mining Intersects Additional High-Grade Gold Mineralization from Its Sonic Drilling Campaign and Releases Multiple Drill Results at Taunus Project, Mexico - More
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$6.3 Million Exploration Program at Inter-Citic's Dachang Gold Project Well Underway - More
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Santa Fe Gold Plans Q4 2011 Ramp Up at Summit Silver-Gold Mine - More
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Focus Gold Corp Nears Closing of the Metallum Acquisition - More
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Source Intersects 1.05 g/t Gold, 2.10 g/t Silver and 0.34% Copper (1.69 g/t Gold Equivalent) Over 22.0 Metres at Cinco Senores - More
- August 08, 2011 | Item | ShareThisShareThis

Levon Files Report on Sedar for the First Bulk Tonnage NI 43-101 Compliant Resource at Its Cordero Project in Mexico - More
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El Capitan Submits Results to Investment Banker - More
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Vaaldiam Reports 2011-Q2 Financial Results - More
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DISCOVER MONGOLIA 2011 International Mining Investors' Forum (IMIF) to Take Place in Ulaanbaatar, Mongolia, Announces Post-Conference Mine Site Visits - "Mongolia's largest Mining Investors' Forum will take place in Ulaanbaatar from 8-9th September 2011. The 9th annual forum is now a hallmark event in the mining sector in Mongolia. This event will see domestic as well as multinational mining companies and global resource financiers gather in Mongolia. The conference provides the opportunity for these companies to introduce their projects and share views on Mongolia's emergence as a major resource exploration frontier in the world." More
- August 08, 2011 | Item | ShareThisShareThis

Aquila Drilling at U.S. Gold Projects - More
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Sniper Resources Ltd.: Exploration Update - More
- August 08, 2011 | Item | ShareThisShareThis

BonTerra Intercepts a Zone 169.70 Metres Grading 0.73 Grams / Tonne Gold, Including Various High Grade Zones Assaying up to 54 g/t Gold on the Eastern Extension - More
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GGG Resources plc: Bullabulling Gold Project: Bullabulling Drill Parameters Agreed - More
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California Gold Corp. Completes Initial Closing to Acquire up to an Eighty Percent Interest in Mexivada's AuroTellurio Gold-Tellurium Property in Sonora, Mexico - More
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Orosur Mining Inc Announces Change of Nomad and Broker - More
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Orocobre Awards Detailed Engineering Contract to SKM for Salar De Olaroz Project - More
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Goldcorp Declares Eighth Monthly Dividend Payment For 2011 - "GOLDCORP INC. (TSX:G.to - News) is pleased to declare its eighth monthly dividend payment for 2011 of $0.034 per share. Shareholders of record at the close of business on Thursday, August 18, 2011 will be entitled to receive payment of this dividend on Friday, August 26, 2011 resident individuals who receive dividends from Goldcorp after 2005 are entitled to an enhanced gross-up and dividend tax credit on such dividends." More
- August 08, 2011 | Item | ShareThisShareThis

Claude Resources Inc. Reports Positive Metallurgical Testwork Results at the Amisk Gold Project, SK - "Claude Resources Inc. (TSX-CRJ; NYSE Amex-CGR) ("Claude") is pleased to announce positive metallurgical and engineering results from testwork at the 15,400 hectare Amisk Gold Project in northeastern Saskatchewan, Canada. The Amisk Gold Project is located 20 kilometres southwest of Flin Flon, Manitoba and is a 65:35 Joint Venture between Claude and St. Eugene Mining Corporation; Claude is the operator of the Joint Venture." More
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Coeur Reports Record Second Quarter and First Half Results - "Coeur d’Alene Mines Corporation (NYSE:CDE - News) (TSX:CDM.to - News) today announced record quarterly metal sales of $231.1 million and operating cash flow1 of $115.8 million. The Company’s strong second quarter results were led by its Palmarejo silver and gold mine in Mexico, which produced a record 2.4 million ounces of silver and 33,389 ounces of gold." More
- August 08, 2011 | Item | ShareThisShareThis

Hecla Receives Final Board Approval on Lucky Friday #4 Shaft and Provides Update on Pre-Development Projects - "Hecla Mining Company (“Hecla”)(NYSE:HL) announced today that its Board of Directors has approved the completion of the #4 Shaft Project at the Lucky Friday mine. Hecla is also pleased to report progress on its Star (Silver Valley – Idaho), Equity/Bulldog (San Juan Silver JV – Colorado) and Hugh Zone (San Sebastian – Mexico) pre-development projects and exploration efforts." More
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Timberline Reports Record Financial Results for Third Quarter 2011 - "We are very pleased with both our financial and exploration success during the quarter and year to date. Timberline Drilling is operating profitably, providing cash to offset our exploration expenditures. We remain excited about the district-scale potential at South Eureka and look forward to reporting results from the two active drill rigs on the property. We also continue making steady progress toward the extraction of our bulk sample at Butte Highlands while advancing the operating permit process and our plans for anticipated gold production in early 2012. With near-term gold production, vast exploration upside, and strong operating results from our drilling subsidiary, we believe we are exceptionally well positioned for today's robust gold market." More
- August 08, 2011 | Item | ShareThisShareThis

Silver Wheaton Declares Third Quarterly Dividend Payment For 2011 - "Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX:SLW.to - News)(NYSE:SLW - News) is pleased to announce that its Board of Directors has declared its third quarterly cash dividend payment for 2011 of US$0.03 per common share. The quarterly dividend will be paid to holders of record of its common shares as of the close of business on September 20, 2011, and will be distributed on or about September 30, 2011." More
- August 08, 2011 | Item | ShareThisShareThis

Silver Wheaton Revenues More Than Double - "Silver Wheaton delivered another quarter of record financial results in Q2 2011," said Randy Smallwood, President and Chief Executive Officer of Silver Wheaton. "Though quarterly silver sales have lagged production over the past year, primarily due to a build-up of concentrate inventories at Glencore's Yauliyacu mine in Peru and Goldcorp's Peñasquito mine in Mexico, we have now had five consecutive quarters of increasing operating cash flows. With silver production rates forecast to grow by 80% over the next five years, and ongoing global economic and political uncertainties supporting robust silver prices, our shareholders should continue benefiting from strong free cash flow generation in the years ahead." More
- August 08, 2011 | Item | ShareThisShareThis

- Chris Mullen, Gold Seeker Report

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© Gold Seeker 2011

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-- Posted Monday, 8 August 2011 | Digg This Article | Source: GoldSeek.com

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