Silver developed the gentlest of upward trends early in London and rode that trend through the Globex, ending just off its intraday high at $13.87/oz., up 17 cents. For the week, silver is up 3.4%. (Click here for charts)

Although profit-taking kept gold from staging a big rally this week, the yellow metal should be well supported at current levels because of dollar weakness and inflation fears, analysts said.

“We are still up here in quite a high range. We don’t see any physical buying coming in at these levels, but what is supporting it is the dollar,” said Andrey Kryuchenkov, an analyst at VTB Capital.

“The dollar’s weakness and the idea that inflation expectations are on the rise are holding gold here,” Kryuchenkov added.

In company specific news, Mineweb reported that Kinross Gold (NYSE:KGC) has recently assumed stock price leadership of the loosely-defined Tier 1 global gold stocks sector, which includes 12 companies with an aggregate market value of just under $200 billion. Kinross’s stock price fluctuated between a 52-week low of $6.85 and high of $20.98 a share, with current trades around the $20.28 mark.

Barrick, the world’s biggest gold miner by value and production, is trading nearly 25% off its 52-week high. Kinross was one gold stock chosen for investment this year by US hedge fund Paulson & Co Inc., which famously scored gains of nearly $4 billion betting against banks in 2007 and 2008.

In the past several years, Kinross has transformed itself from a stodgy, higher cost gold producer to one that increasingly reports lower costs, along with a highly convincing longer-term growth profile.

Source: Gold Pushes Through $950

Silver traded flat most of the day, as a gentle rise and fall in London and the same in New York canceled each other out perfectly. The metal finished exactly where it started at $13.70/oz., up/down 0 cents. Overnight, silver is trending higher. (Click here for charts)

Despite big gains in oil yesterday, which is usually gold supportive, the yellow metal fell as it took its cue from rising equities and a slightly stronger dollar.

“We have a tug of war here between those who dare to buy at these levels and people who got in at previous levels. If it breaches $960 [an ounce] it might make a quick run to $975, or it might swing back to the lower end,” said Jon Nadler, senior analyst at Kitco Metals Inc.

If Treasury auctions or GDP data coming next week prove dollar supportive, “it would bring gold down to the $930s at a minimum,” Nadler continued.

While Peter Grant, a senior metals analyst at USAGOLD – Centennial Precious Metals, Inc., believes inflation to be a “legitimate risk,” Nadler calls the jury very much out. “Right now we’re still grappling with deflation if anything.”

In reality, we’ve already had massive inflation (meaning expansion of the monetary base), but it hasn’t manifested in prices yet because the banks are holding the funds in reserve rather than lending them out. Once that money hits the market, however, (and there’s no telling when that will be exactly) you can and should expect huge price inflation to follow. This will be extremely positive for gold.

Source: Gold Takes a Step Back

Silver started to fall midway through trading in the Far East and moved sideways through London but trended much higher the rest of the day through the Globex to close at $13.70/oz., up 17 cents. Overnight, silver is trending higher. (Click here for charts)

Gold closed at its highest price on the Globex since June 11 as the dollar weakened in response to an up-tick in risk appetite.

“Almost all the recent momentum is coming on the back of recent dollar weakness,” said Pradeep Unni, a Richcomm Global Services analyst. “Earlier this month economic worries encouraged investors to buy the dollar and U.S. Treasuries. Appetite for other assets including gold and equities seems to be returning.”

“Prices remain well supported above the $950 an ounce mark, largely on the back of the weaker dollar,” said Calyon metals analyst Robin Bhar.

“It may be that outflows from things like the ETFs or the retail base are being offset by more buying of OTC- or futures-based [products],” Bhar added.

Meanwhile, reported holdings of SPDR Gold Shares (NYSE:GLD) dropped another 5.8 metric tons yesterday from 1,092.41 tons to 1,086.61 tons. In the last 30 days, holdings have fallen 44.63 metric tons, or 3.9%.

Some analysts view the decline in holdings at GLD as a sign of waning investor demand.

“We fear that there will be very few buyers above $955 an ounce,” said Andrey Kryuchenkov, a VTB Capital analyst. “Investor demand is waning and it is too early for a seasonal pick-up in jewelry demand.”

Source: Gold Closes Above $950

Silver hit its intraday high of $13.70 about midway through Hong Kong then developed a volatile but generally downward sloping trend and fell to its intraday low of $13.45 around 1 p.m. in New York. From there silver was able to regain some ground through the Globex to close at $13.53/oz., down 10 cents. Overnight, silver is down sharply. (Click here for charts)

Gold was propped up by higher oil prices yesterday but that upward force was slightly overpowered by investors’ naïve belief that the Federal Reserve will be able to combat future dollar devaluation and price inflation.
Still, analysts like Shuji Sugata, a manager at Japan’s Mitsubishi Corp Futures & Securities, said crude oil is currently a key factor in providing gold with direction.

“We’ve seen crude oil climb almost daily and before we knew it it had topped $60, which has been a positive factor for gold,” Shuji said.

“Now whether crude oil challenges $70… will also be key to whether gold will rise towards its recent high near $990,” he continued.

Meanwhile, reported holdings of SPDR Gold Shares (NYSE:GLD) dropped 2.13 metric tons yesterday from 1,094.54 tons to 1,092.41 tons. In the last 30 days, holdings have fallen 38.83 metric tons, or 3.4%.

In company specific news, Australia’s largest gold producer, Newcrest Mining’s annual gold production fell more than 8% over the past fiscal year, only just meeting company guidance.

Newcrest’s latest production report showed total gold production across its operations fell to about 1.63 million ounces, compared to about 1.78 million ounces last year, a fall of 8.4%.

Newcrest shares fell 57 cents, or 1.84%, to $30.39 on the news.

Source: Gold Holds Firm

Platinum got a boost early in Hong Kong trading, then trended down until things got started in New York where the metal broke through resistance at $1170 to post a solid gain, closing at $1172/oz., up $11. For the week, platinum is up 6.1%.

Silver’s chart yesterday resembles the Nike swoosh symbol. After a curving downward trend through Hong Kong and London the metal went vertical in the early hours of Comex trading, but then tapered off, ending near its intraday high at $13.41/oz., up 12 cents. For the week, silver is up 6.0%. (Click here for charts)

Investors showed slightly renewed interest in gold as an inflation hedge Friday, as crude oil closed at its highest price since July 6.

Here’s what The Hightower Report had to say about the action in gold and silver: “The bull camp will praise the gold market’s capacity to hold up around this week’s highs for most of the session today. The bear camp will suggest that the bull camp should have made more hay out of the scheduled data flow and the corporate earnings news. However, while the scheduled data flow as much better than expected, the corporate earnings news did have some troubling components. It was also clear that a stronger Dollar and weaker equity prices took some of the positive macroeconomic psychology out of the trade on Friday morning. The bulls might suggest that renewed terrorism threats could support gold, but the bear camp will quickly suggest that terrorism news on Friday morning supported the Dollar and that in turn crimped the action in the gold market.”

“The silver market was clearly lifted by an improved macroeconomic outlook in the wake of the US Housing starts and permits data. It is also likely that a firm bid in the energy complex allowed silver and copper prices some added bullishness. Like the gold market, it is possible that silver was at least partially restrained by the combination of a higher Dollar and weaker US equity prices.”

Source: Silver Goes Swoosh

Silver didn’t do much through Hong Kong, but started a roller coaster ride in London that lasted through the Globex only to end the day little changed at $12.82/oz., down 3 cents. Overnight, silver is trending lower. (Click here for charts)

“Summer inertia” has hit gold-market speculators according to Edel Tully at London dealers Mitsui.

“We believe [the Gold Futures] market remains overly long and further liquidation desires remain in the wings. Until this passes, gold does not have another internal driver to force it northbound,” wrote Tully.

Official data seems to support Tully’s belief. The ‘net long’ position held by hedge funds and other speculative players in U.S. gold futures and options has shrunk by almost 20% from early June’s 11-month high.

But don’t expect the waning demand for gold to last too long.

“In the near term, day to day moves continue to be influenced by the direction the dollar takes,” Lin Haoxiang, analyst at Guotai Junan Securities, said from Shanghai yesterday. “In the longer term, inflationary expectations remain.”

In company specific news, Brazilian mining giant Vale has signed an agreement which could see it take a 60% stake in Australian gold junior Intrepid Mines.

In a statement, Intrepid welcomed the signing of the Heads of Agreement (HOA) with Vale Exploration (NYSE:VALE), giving the company an option to acquire rights in Intrepid’s Tujuh Bukit project in east Java.

“Under the terms of the HOA, Vale could earn a 60% shareholding in a joint venture company holding the rights to the Tujuh Bukit project by, amongst other terms, spending a total of $US40 million ($A51.05 million),” Intrepid said.

Intrepid shares were up nearly 13%, to 30.5 cents on the news.

Source: ‘Summer Inertia’ Hits Gold

Silver followed gold’s path almost perfectly, falling as low as $12.75 before regaining a little upward momentum late in the day to close at $12.85/oz., down 24 cents. Overnight, silver is little changed. (Click here for charts)

After little change on Tuesday, traders handed the precious metals a pummeling yesterday, with all three suffering significant setbacks and gold plumbing a two-month low.

There really wasn’t anything to prop up the market, with equities spinning their wheels, the dollar reaping the benefits of a flight from currencies perceived as riskier, and crude prolonging its losing streak.

Continuing to weigh on gold and silver was this week’s announcement from India that it is doubling import taxes on both metals as the government seeks to use its citizens’ affinity for them to raise money. The move could certainly put a lid on India’s gold imports and pressure gold prices.

Gold’s recent weakness has “gold bulls on the defensive,” said Ralph Preston, a Heritage West Futures commodity analyst in San Diego. “I have a very specific trade recommendation to short the gold market on today’s break of $915 support.”

Preston is advising clients to short gold “at $912 with an $8 stop-loss at $920,” with “a price objective of $870, risk $8, for a potential profit of $42.”

Looking at yesterday’s trend numbers, Dan Norcini, writing on jsmineset.com, said that “gold broke down technically in today’s session once it pushed past the $920 level and downside momentum carried it even lower to violate the $915 level. With today’s move it is now solidly below all of the major moving averages with the short term trend firmly in favor of the bears. The broad consolidation pattern of the last 5 months shows support near the $890 level followed by more substantial support near $880. Those will have to hold to prevent a rout of the longs that could conceivably take it down as low as $865. It will take very strong buying from overseas to offset the speculative selling that has now arisen. It did seem to uncover some buying of a value nature just above $900 in today’s session.”

Source: Precious Metals Hammered

Silver bumped up to $13.35 just before New York opened, but that was all she wrote as the metal drifted lower pretty steadily through the day, just coming off its intraday lows late in the Globex to close at $13.09/oz., down 16 cents. Overnight, silver is unchanged. (Click here for charts)

It was a pretty blah day, as early strength in all of the precious metals waned as the day wore on, but the results were not a surprise, as there was broad-based selling among both equities and commodities, while crude retreated again and the dollar pushed higher.

Gold’s rally “was tempered by lack of physical demand from the jewelry trade, the Indian imports due to new duty, and the liquidating mode of the markets,” said George Gero, of RBC Capital Markets, covering many of the bases.

In the present market, even among normal gold bugs, optimism is hard to come by. “While the dollar is likely to provide further direction in the short term, we still see gold at risk to further pockets of liquidation from stale longs,” said James Moore, of TheBullionDesk.com.

Moore believes we could see the metal fall below $915/oz. and, at the other end, gold is “seen as capped by resistance up near and beyond the $940 area at the moment,” according to Kitco’s Jon Nadler.

What to watch for out of Washington was suggested by Obama financial advisor Laura D’Andrea Tyson. Though stressing that these were her views and not the administration’s, Tyson said in a speech in Singapore that February’s $787 billion stimulus plan was “a bit too small,” because “the economy is worse than we forecast.”

She thinks that more money should be allocated to transportation infrastructure, conceding that additional government spending raises concerns that “the U.S. will have to inflate away its debt.”

However, “I do not think that is a valid concern,” Tyson said. “The Federal Reserve is not going to let the U.S. government inflate away its debt.”

Source: Precious Metals Edge Lower

Silver plunged from its $13.40 peak in Hong Kong to as low as $12.98 in New York’s first hour, then staged a powerful comeback to the noon hour that left it just short of break-even, before flattening out the rest of the day and closing at $13.25/oz., down just 10 cents. Overnight, silver is unchanged. (Click here for charts)

Precious metals traders returned from the long holiday weekend in more of a selling mood than not but, although platinum was hammered, gold and silver turned in only mildly negative results.

All in all, it wasn’t too bad a day considering that both the tumbling price of crude and the strengthening dollar were working against them.

The commodity selloff was general, as well, with the Reuters/Jefferies CRB index of 19 major commodities down 1.8%.

“On top of everything is a little bit of anticipation that [the] G-8 meeting will come up with something to strengthen the dollar [further],” said George Gero, of RBC Capital Markets. “And that’s pushing gold and other commodities lower.” Leaders of the G-8 nations meet in Italy for three days, beginning tomorrow.

The meeting will be closely watched, for what the participants have to say about the world economic situation and, perhaps more importantly, a possible clarification of where the dollar now stands as a global reserve currency.

At the moment, a hazy short-term pessimism seems to be hanging over the gold market, with the bears gathering strength of numbers.

Commerzbank analysts noted the countervailing trends, with “a firmer U.S. dollar and falling oil prices undermining gold’s role as a hedge against currency and inflation risks,” while “higher risk aversion and falling equity markets are not having much of an impact at present.”

Source: Precious Metals Retreat

Silver was virtually unchanged two hours into London trading, but fell off into the first hour in New York, briefly dipping below $13.30 before inching back over it and going flat as a pancake the rest of the day to close at $13.35/oz., down 35 cents. For the week, silver skidded 5.1%. (Click here for charts)

The precious metals ended the abbreviated holiday week by stepping back in their recent one-step-forward, one-step-back pattern, with all three taking a licking out behind the woodshed.

If anything, it was probably surprising that they didn’t slide more in a day of grim economic news, a rising dollar, and falling oil prices. But they likely benefited from the early departure of some traders getting a jump on the long weekend.

How do you keep any kind of perspective in this yo-yo market? The irrepressible Dan Norcini, writing on jsmineset.com, comments:

“There is really not much to say about any of this – deflation is battling inflation and until one side gets a clear advantage and dethrones the thinking in the other camp, we are going to see no trends, no orderly markets, no sanity and nothing but idiotic volatility and casino-like markets.

“The markets have been completely taken over by the day trading, one minute bar chart geeks who wouldn’t know a pork belly from a brisket cut or a grain of wheat from a cocoa pod but who are enamored with lots of squiggly lines and dream of coming back from their bathroom break and discovering that they have traded in and out of the same market 15 times during that period and made $100,000 on each turn.

“The rest of us normal people who actually have lives to lead and families to raise, etc. are better served keeping a longer term perspective and understanding that the Dollar’s days of supremacy are forever over and that the rise of the BRIC nations means that America is beginning to go the same path as the once mighty and proud British Empire. Its leaders too spent it into oblivion and destroyed its currency in the process.”

Indeed they have, and gold will one of the few things that ultimately benefits.

Source: Precious Metals Pounded Again