-- Posted Thursday, 11 April 2013 | | Disqus

The Metals:

Gold dropped $3.90 to $1554.60 at about 5AM EST, but it then rose to as high as $1568.19 in New York and ended with a gain of 0.16%.  Silver climbed to as high as $27.842 and ended with a gain of 0.07%.

Euro gold fell to about €1192, platinum gained $4.50 to $1528.25, and copper rose slightly to about $3.43.

Gold and silver equities saw slight gains in the first hour of trade, but they then drifted back lower for most of the rest of trade and ended with about 1.5% losses.

The Economy:

Tomorrow Brings Retail Sales, PPI, Michigan Sentiment, and Business Inventories.

The Markets:

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

Oil fell after the “International Energy Agency once again cut its outlook for global oil demand.”

The U.S. dollar index “weakened against most of its major counterparts as investors bet that central banks around the world will maintain stimulus measures, bolstering demand for higher-yielding assets.”

Treasuries pared early gains after today’s $13 billion 30-year note auction sold at a yield of 2.998% with a bid to cover of 2.49.

The Dow, Nasdaq, and S&P rose on better than expected jobs data and positive company reports.

Among the big names making news in the market today were Bitcoin, American Realty, Deutsche Telekom, and Microsoft.

The Commentary:

“Central Bank buying out of Asia has been attracted to the metal on approaches to this lower support zone in time past. We will have to wait and see if that buying materializes again.

One thing I find quite ironic. Let me mention it and see if you do also. The Bank of Japan, has adopted the policy of its new Prime Minister whose stated goal when he ran for election was to deliberately produce a 2% inflation rate. That was for the express purpose of getting the Japanese economy out of the deflationary trap which has snared it for decades now. When you really examine that policy, all it essentially consists of is massive buying of all maturity ranges of Japanese government debt, along with some targeted buying of certain ETF's and some other financial assets. The scope and the size of this buying has various estimates that I have seen but it looks to be in the neighborhood of (US) $1.4 Trillion or so.

What is the methodology to induce inflation when we cut to the chase? Simple - drive the currency lower pushing the costs of imported goods higher while making Japanese goods much more competitive on the global market. Also, keep interest rates artificially at such extremely low levels that it spurs borrowing and thus consumption.

What has been the result for gold priced in terms of the Yen? Answer - it shot up to an all time high just yesterday.

Now turn your attention to the US here. What is the policy of the Federal Reserve? Buy enough government bonds to keep interest rates, both short and long term, artificially low in order to spur borrowing and thus consumption.

Somehow this is supposed to produce inflation in Japan without it being inflationary here. Okay - what is the difference? Well, the US Dollar is going higher and higher against a large basket of other majors. This is short-circuiting the inflationary implications of a weaker currency and has thus far enabled the Fed to play the exact same game that the Bank of Japan is playing but without the same consequences.

Regardless, Gold in US Dollar terms keeps being sold by hedge funds while gold in Japanese Yen terms keeps rising.

I can note this divergence and apparent contradiction but quite frankly what irritates me to no end is to hear various talking heads, pundits and analysts, praising the Fed for its efforts and avoiding inflation in the process. Why praise them? The only thing preventing their policy (the exact same policy as Japan's) from knocking the Dollar into the same abyss as the Yen is the fact that the some of the other major currencies have stunk to high heaven.

With the US stock market moving higher alongside of the Dollar, foreign investors are chasing US stocks hoping to catch the move up and profit additionally from the Dollar appreciating against their own domestic currency - a DOUBLE BAGGER as we say. That is generating strong inflows of foreign currency to our shores creating yet another source of artificial demand for the Dollar.

I am not sure what will cause the US Dollar to reverse course but the US is at 100% Debt to GDP ratio with a growing federal budget and a looming entitlements crisis. We continue to read reports of various trade deals between China and some of its trading partners that call for direct exchange in their native currencies and so forth obviating the need for any US Dollar involvement whatsoever. The US fiscal house is in such serious disorder that it is screaming a warning at the top of its lungs and yet utter complacency prevails.

These things have a habit of continuing on merrily until one day they just don't. I do not know when that will be but I know it will be. Instead of giving this problem the serious attention it deserves, our leaders are instead fixated on homosexual marriage and gun snatching. Nero at least produced something constructive while Rome burned even if it was only a song on his fiddle. This current crop of leaders.....”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

“If gold could speak it would say this

I’m celebrating my 30^th year in and around the financial arena and I can honestly say I never see any investment known to mankind that has done as well as it has for over a decade, yet command little or no respect from the masses.

Let me go one step further now and say that while I always have been a supporter of GATA, I’ve respectfully disagreed with Bill Murphy and Chris Powell on the severity and the consistency they felt gold was manipulation……. BUT NO MORE!!!

I half-joke when I made this post. But just from a mathematical standpoint, what are the odds that so many one-day rallies are never ever followed by a decent upday? Even in the worse of bear markets, a two day rebound is quite common.

But then you see Goldman Sachs (which I use to call Gold-down Sachs but now shall be called No-Gold Sachs until further notice) not only issue negative gold report (remember, the last one a couple of months ago had an initial reaction but then has not gone the way they said it would), but now say short it. And as “luck” would have it (I think it goes way beyond luck), a story goes around that Cyprus is going to sell large quantities of gold (which this evening was reported to be totally false but damage already done) and a “pre-mature” FED meeting minutes suggests easing may come to an end (which is never, ever, ever going to happen because the FED has painted itself totally into the corner and knows the moment they stop the financial markets crater).

So the net result is gold is slammed again and the bears seem to be winning when in fact their attacks grow more desperate and don’t even last as long as the good old days.

Silver is showing some relative strength after some of the biggest oversold readings my work has ever shown.

I know it’s extremely painful and when you lump in the disaster of junior resource stocks it feels hopeless. But that’s exactly what the manipulators want because it’s them who have gotten ever more desperate and want to break gold’s back. We need to get above $1,620 before an all-clear signal can be given but a good start would be to see silver lead for a change and we recoup much of today’s loss back by weeks end.”- Peter Grandich, Grandich Letter

GATA Posts:

Schiff complains of gold market manipulation on CNBC; network lets it pass unremarked

Fed leaks rate-setting minutes to banks

The Statistics:

As of close of business: 4/10/2013

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 16.848 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 210.21: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,497.59: No change from yesterday’s data.

The Miners:

Royal Gold’s (RGLD) project update, Revett’s (RVM) mine update, and Excellon’s (EXN.TO) assay 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.

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

- Chris Mullen, Gold Seeker Report

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© Gold Seeker 2013

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-- Posted Thursday, 11 April 2013 | Digg This Article | Source: GoldSeek.com

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