The Metals: Gold and silver steadily rose in Asia and London to as high as $955.00 and $13.75 in early New York trade before they both pared their gains a bit into the close, but gold still ended with a healthy gain of 1.15% while silver added 1.79%. Euro gold rose to about €668, platinum gained $12.50 to $1181, and copper gained nearly 5 cents to about $2.46. Gold and silver equities rose over 3% at the open and remained near their highs for most of the rest of trade. The Economy: Report There are no major economic reports due out tomorrow, but Bernanke will start his biannual testimony before Congress. The Markets: Oil found slight gains and the U.S. dollar index and treasuries fell while the Dow, Nasdaq, and S&P climbed higher on decent earning reports and news that CIT will likely be rescued by non-government entities. Among the big names making news in the market today were Halliburton, CIT, Johnson Controls, Morgan Stanley, Entergy, Valero, and Fortress. The Commentary: “Dear CIGAs, MOPE (management of perspective economics - the new economics) worked overtime to seek new lows in gold but their accomplishment has been minimal at best. Keep the following in mind: 1. The price of gold is all in the dollar and has been since we met. It will continue to be. 2. China is quite upset with the disrespect received and what is perceived by them to be the Western element in the recent disturbances in remote provinces and an NGO believed to be financed by the West. 3. The weak position of the dollar could easily be an Achilles heel. I suspect we are at a turning point in the affairs of MOPE as the front page of the Economist says by illustration. The meltdown in new economics can only be the inability to maintain confidence as management of perspective economics folds into the effects of the CIT walk away bankruptcy, the hubris of the mega-profit investment banks and the people that are being thrown out of their homes in groves. We are nearing a breakdown in the US dollar with a target towards and under .7200. That means we are nearing the visible result of a currency event in terms of prices in general commodities. The CIT failure means without any doubt upwards pressure on short term interest rates. The Fed will cave into Administration pressure, increasing Quantitative Easing to a level best described as infinite. Gold will take out $1000 on this try with a very temporary retreat before it moves fully through. Gold will move to and through $1224 with a temporary battle. Gold will move toward $1650 but meet serious temporary opposition in the $1400 area. All of this will occur starting quite soon. Hold on tight to all that is precious metals. Stay the course. Respectfully yours,”- Jim Sinclair, JSMineset.com “August Gold closed up 11.3 at 948.8. This was 2.3 up from the low and 6.6 off the high. September Silver finished up 0.222 at 13.625, 0.12 off the high and 0.04 up from the low. The gold market extended gains from last week as rising macro economic recovery hopes seemed to stir up inflation based buying demand for the metal. Gold found early price support from another monthly rise in leading US economic indicators which helped to reaffirm positive market sentiment. Bullish outside market action also seemed to trigger strong buying interest in gold. Gains in equity markets raised speculation that economic conditions were improving while the weaker Dollar and higher oil prices seemed to put an inflationary bent on investor sentiment raising speculative demand for gold. With the gold market pushing above a key level, chart based buying certainly seemed to be a factor providing a lift to the gold market. Silver also tracked higher with gold with support stemming from a variety of bullish outside market influences. Strength in silver was certainly tied to rising macro economic recovery hopes stemming from solid gains in equity and copper prices. Also, a combination of higher oil prices and a weak Dollar seemed to fan inflation expectations stirring up hedge demand for silver. Today's positive economic news along with good corporate earnings results seemed to bring forward the bullish sentiment in silver that surfaced last week. A move above a key price level suggests part of the gains in silver were likely chart based.”- The Hightower Report, Futures Analysis and Forecasting

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