The Metals: Gold and silver traded slightly higher in Asia before they dropped slightly in London to as low as $837.16 and $10.79 by a little before 8AM EST, but they then rocketed higher in early New York trade and saw gains of 2.86% and 2.03% at as high as $864.15 and $11.32 before a slight pull back into the close that left gold with a gain of 1.64% and silver with a gain of 0.05%. Euro gold rose to about €624, platinum gained $10.50 to $984.00, and copper fell a few cents to about $1.47. Gold and silver equities rose about 4% at the open, remained near their highs into the close, and ended with over 5% gains. The Economy: President-elect Obama also spoke today expressing his belief that more massive government spending is needed to pull the US out of recession. Tomorrow at 8:30AM EST brings December’s jobs data. Nonfarm Payrolls are expected at -500,000, the Unemployment Rate is expected at 7.0%, Hourly Earnings are expected at 0.2%, and the Average Workweek is expected at 33.5. At 10AM is the Wholesale Inventories report for November expected at -0.9%. The Markets: Oil fell with the U.S. dollar index while treasuries rose slightly on more economic worries. The Dow, Nasdaq, and S&P fell for most of the day on poor retail sales reports, but hopes that Obama’s stimulus plan will save the economy seemed to encourage some buying near the end of the day and the major indices ended with mixed on the day. Among the big names making news in the market today were Walgreen, Sears, Costco, Wal-Mart, Gap, Macy’s, and TD Ameritrade. The Commentary: “Dear CIGAs, Due to time constraints associated with trading I have to keep things short today – gold rebounded off of support near yesterday’s lows further reinforcing the area near $837 - $840 as an initial support level. The bounce put gold back above the 20 day moving average which is helpful but it will need to recapture the 10 day moving average which comes in exactly at today’s session high to put the bulls back in charge. Right now there is no clear advantage to either the bull or bear side. As long as the market can hold above the $828 - $830 level you have to favor the bulls however. Judging from the sharp ramp up in open interest even as the market has fallen, the shorts are digging in their heels and attempting to hold the line just below $866 or so. Some of this selling is no doubt associated with commodity index fund rebalancing so until we get the COT data it is going to be mostly guesstimates as to who is doing what in regards to selling. I do feel quite confident however that the bullion banks are capping gold on the rallies into the highs. For now let’s say that gold continues to consolidate. Crude oil backed off further from the $50 level while palladium could not hold the $200 level. Copper gave up all the gains that it managed to ridiculously acquire as the ninny index funds went diving into the red metal to add copper longs to their holdings. They are now all under water. Nice move guys. They are now hoping that the $1 trillion economic stimulus plan being put forth contains lots of new electrical wiring components. Who knows – maybe they will get lucky and look like geniuses. I want to repeat from yesterday – until the index funds complete this rebalancing act attempting to get an accurate read on these markets is a fool’s errand. This is all about money flows – pure and simple – nothing else matters right now.” - Dan Norcini, More at JSMineset.com “February Gold closed up 12.8 at 854.5. This was 12 up from the low and 10.5 off the high. March Silver finished down 0.008 at 11.097, 0.018 off the high and 0.097 up from the low. The gold market forged an early rally in the wake of the scheduled US data flow but then seemed to sag back off the highs for the rest of the trading session. Clearly, weakness in energy and equity prices seemed to weigh on gold prices today but the bull camp in gold had to be happy with the overall results. With equity prices weaker, the Dollar weaker and gold higher one got the sense that flight to quality buying ahead of the monthly non Farm payroll report was driving sentiment. Perhaps some brokerage firm up grades of gold shares inspired part of the buying but in the end the bull camp could certainly point to the prospect of economic uncertainty, geopolitical uncertainty and even the potential for currency related support. After a two sided early trade Thursday the silver market eventually managed to claw back into positive ground and seemed to manage the recovery in the face of slack US economic readings, weak equities and lower energy pricing. Perhaps the strength in gold prices and the slide in the Dollar prompted the fresh buying wave in silver because the fear of slowing in the economy was still present and the weakness in copper prices could have easily kept silver prices under wraps.”- The Hightower Report, Futures Analysis and Forecasting

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