-- Posted Thursday, 12 January 2012 | | Disqus

The Metals:

Gold climbed over $20 to $1661.85 by about 10AM EST before it fell back to $1643.77 by about 2:30PM EST, but it then bounced back higher into the close and ended with a gain of 0.48%.  Silver surged to $30.654 before it fell back to $29.897, but it also bounced back higher in late trade and ended with a gain of 0.77%.

Euro gold fell to about €1285, platinum gained $4.40 to $1491.70, and copper gained 10 cents to about $3.64.

Gold and silver equities rose almost 2% in the first half hour of trade before they drifted back lower for most of the rest of trade, but they still ended with about 1% gains.

The Economy:

Obama asks Congress for $1.2 trillion increase in nation’s borrowing limit The Washington Post

Mortgage rates hit record lows: Freddie Mac MarketWatch

Tomorrow at 8:30AM EST brings Export and Import Prices for December and the Trade Balance for November expected at -$84.0 billion.  At 9:55 is Michigan Sentiment for January expected at 71.2.

The Markets:

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

Oil rose in early trade on worries about Nigerian output, but it then fell back off in late trade and ended with a nearly 2% loss on a report that the EU is delaying sanctions on Iran.

The U.S. dollar index fell as the euro rose “after European Central Bank President Mario Draghi expressed confidence about the effectiveness of the bank’s long-term lending operations.”  Neither the ECB nor the Bank of England raised or cut interest rates, as was expected.

Yields fall sharply at Spanish, Italian debt sales Reuters

Greece may clinch bond swap deal by next week: source Reuters

ECB sees "substantial" effect from cheap money offer Reuters

Treasuries fell after today’s $13 billion 30-year note auction sold at a high yield of 2.985% with a bid to cover of 2.6.

The Dow, Nasdaq, and S&P fell on worse than expected economic data in the first hour of trade, but they then rebounded midmorning on relief over Europe and all three indices ended with modest gains.

Among the big names making news in the market today were Home Depot, MF Global, JPMorgan, Wynn, Williams-Sonoma, Sears, RealtyTrac, and RBS.

The Commentary:

Visualize: All The World's Gold - http://www.numbersleuth.org/  

“U.S. Stock Market – I continue to believe the least resistance in the stock market is to the upside despite believing not only is economic growth greatly hampered by the ever-increasing debt levels, but also political paralysis that has gripped Washington. I do believe it can get another shot in the arm from a “QE 3″ type action by the Fed in the not-too-distant future. I’m not the only one who thinks this.

U.S. Bonds - I’m struggling with two things in 2012:

1-Not saying anything bad about the Vancouver Canucks (You have to admit I’m doing okay on this)

2-Wanting to short bonds in the worse way

Ideally, a new low on yields on a new QE action by the FED would be too much to resist so stay tuned.

Gold – This article is not far-fetched. We still need 2 consecutive closes above $1646 to remove any lingering negative technical angles for the perma-bears to harp on but it’s nice to know they have once again cried wolf and ended up bloodied from their erroneous cries. Isn’t it also nice to know you can always count on Tokyo Rose to be wrong and go the other way?

U.S. Dollar – The bull dollar boat is so filled up that some of them are holding onto the sides while treading water. Interestingly, it has not gotten above real key resistance despite all the fluff about some new mega dollar bull market. A reversal on something like a new QE action would not surprise me. In the end, America faces a far worse debt crisis than Europe has seen and the longer we don’t face up to it, the worse it shall be when the can is no longer able to be kicked further down the road.

Oil and Natural Gas – With all the sable rattling in the Middle East, hard to envision a much lower oil price. Natural gas is overflowing and hard to see how we go much higher for now. Longer-term its still okay but the shares are mostly overvalued.”- Peter Grandich, Grandich Letter

“Gold, Silver and Copper responding to low interest rate environment:

All three of the above commodities are responding to news today that inflation in China is supposedly slowing somewhat (one always has to read these numbers with a healthy dose of skepticism as the Chinese are becoming almost as adept as US official-sector statisticians). Also adding to the mix is news that the ECB will keep interest rates low and would not rule out additional rate cuts if necessary in their view.

This is music to the ears of gold as it thrives in environments when there is plenty of room for more liquidity. The thinking in regards to China is that they have room to back away from any rate hikes and actually ease credit restrictions which had been put in place over the last year as the authorities there grappled with inflation problems.

Copper liked the news very much as traders there are viewing the news as positive for future demand if credit stays easy.

Note that in this environment silver is outperforming gold. That will continue as long as traders adopt a psychology focusing on future inflation as a result of easy credit instead of the opinion that deflation is the evil genie to be focused upon.

We are basically back to the risk trade today as most commodities are higher (crude oil continues its Yo-Yo-like trade as it is now higher) as the US Dollar sinks back down while the Euro rallies a full point. Grains are dragging on the commodity indices however as a USDA report has sent corn limit down this morning with spillover being seen in the Soybean market. Wheat bulls were also kicked in the groin by the same report showing larger-than-expected supplies of wheat. That news is good for consumers but disappointing for many farmers who are probably looking at corn with a handle of "5" in front of it unless some sort of crop scare down in Argentina surfaces.

Gold has pushed through $1650 and run as high as $1663 but has fallen back from its best levels. The bulls are performing but need to keep it above $1650 to see it run to $1675- $1680.

If Silver, and this is a big "IF", can hold ABOVE $30, it has a very good shot at seeing $32 relatively quickly. It has been unable to hold gains above $30 for some time now so such an event would signal a shift towards the metal by large speculators and hedge funds. We will see how it fares the remainder of the session.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

GATA Posts:

CFTC acts to protect trader collateral, endorses 'Volcker rule'

The Statistics:

Activity from: 1/11/2012

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 0.411 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 171.84: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,516.75: No change from yesterday’s data.

The Miners:

NovaGold’s (NG) filed National Instrument 43-101 technical report, Timberline’s (TLR) initial mine plan and permitting update, Aurcana’s (AUN.V) record production, First Majestic’s (AG) record production, SilverCrest’s (SVL.V) record production, and Silver Standard’s (SSRI) update on the status of operations and guidance for 2012 were among 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.

Please see Yahoo’s Mining/Metals News Wire for all of today’s mining news.

- Chris Mullen, Gold Seeker Report

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Additional Resources for today’s Gold Seeker Report can be found:

• http://www.capitalupdates.com
• http://www.goldseek.com
• http://www.silverseek.com
• http://www.goldreview.com 

© Gold Seeker 2012

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-- Posted Thursday, 12 January 2012 | Digg This Article | Source: GoldSeek.com

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