Capital Gold Group Report: Bank Failures Continue – 9 in 2010

On top of the record 140 bank failures in 2009, there have been 9 bank failures thus far in 2010.  They are:

Columbia River Bank	The Dalles	OR		January 22, 2010
Evergreen Bank	Seattle	WA		January 22, 2010
Charter Bank	Santa Fe	NM		January 22, 2010
Bank of Leeton	Leeton	MO		January 22, 2010
Premier American Bank	Miami	FL		January 22, 2010
Barnes Banking Company	Kaysville	UT		January 15, 2010
St. Stephen State Bank	St. Stephen	MN		January 15, 2010
Town Community Bank & Trust	Antioch	IL		January 15, 2010
Horizon Bank	Bellingham	WA		January 8, 2010

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Capital Gold Group Report: US Gold’s McEwen Says Gold May Hit $5,000 by 2012

By Edmond Lococo and Erik Schatzker

Jan. 12 (Bloomberg) — US Gold Corp. Chief Executive Officer Rob McEwen said global gold prices may increase to $5,000 an ounce between 2012 and 2014 as rising U.S. government debt weakens the dollar.

“Money supply has expanded so rapidly that there are a lot more dollars looking for a steady home,” McEwen, also founder of Goldcorp Inc., said today in a Bloomberg Television interview. “Governments cannot help themselves. They want to help the economy. They are printing money. They are going into debt on a horrific scale, and that will depreciate the value of the dollar.”

His forecast for gold, which is more than quadruple the current price, represents a “once-in-every-300-years” phenomenon, McEwen said. He maintained his previous forecast that gold will rise to $2,000 an ounce by the end of this year.

Gold futures for February delivery fell $3.60 to $1,147.80 an ounce at 8:27 a.m. on the Comex division of the New York Mercantile Exchange. The price of most-active contracts has risen for nine straight years.

Watch the video by clicking here or cut and past this link into a new browser window:

http://www.bloomberg.com/avp/avp.htm?N=video&T=Robert%20McEwen%20Interview%20on%20Outlook%20for%20Gold%20Prices%20&clipSRC=mms://media2.bloomberg.com/cache/v6ALeGNsOrcc.asfRobert McEwen Interview on Outlook for Gold Prices Jan. 12 (Bloomberg) — Robert McEwen, chairman and chief executive officer of U.S. Gold Corp., talks with Bloomberg’s Erik Schatzker and Deirdre Bolton about the outlook for gold prices. McEwen expects gold prices to increase to $5,000 an ounce between 2012 and 2014 as rising U.S. government debt depreciates the value of the dollar.

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Capital Gold Group Report: Gold rises towards $1,140 an ounce after US jobs data

Jan 8, 2010:  Gold prices rose towards $1 140 (R8 345) an ounce on Friday after December’s US non-farm payrolls data missed expectations, dampening expectations a US interest hike may be imminent and pressuring the dollar versus the euro.

Spot gold hit a high of $1 139.40 an ounce in the wake of the data and was bid at $1 135.60 an ounce at 16:13 SA time, against $1 131.40 late in New York on Thursday. Earlier it slipped as low as $1 119.45.

“People were largely going short into the market, and as the non-farm payrolls for December were slightly worse than expected, those shorts were covered,” said Michael Widmer, an analyst at Bank of America Merrill Lynch.

“The dollar came off quite a lot on the back of it, and that contributed to pushing gold higher,” he added.

US gold futures for February delivery on the COMEX division of the New York Mercantile Exchange rose $3.30 to $1 373.00 an ounce.

The dollar plunged against the euro after data showed US job losses were 85 000 last month, while markets were expecting no cuts.

The numbers dampened burgeoning hopes an economic recovery may be on the way, which might have led to a hike in US interest rates sooner rather than later.

Gold prices have benefited from low interest rates in the last year, which contributed to dollar weakness and cut the opportunity cost of holding non-interest bearing assets.

“The play for gold (this year) is speculating on the move in US interest rates,” said Jeremy East, Standard Chartered’s global head of commodity derivatives trading. “(The payrolls data) will obviously have an impact on expectations for that.”

// On the wider markets, oil prices eased after the data, while US stock futures pointed to a lower opening on Wall Street after the report. European shares briefly turned negative after the numbers.

INVESTMENT SOFT

Investment demand for gold-backed exchange-traded funds remained soft after a lacklustre start to the new year. The largest gold ETF, New York’s SPDR Gold Trust, reported a further 0.4 tonne dip in its holdings on Thursday.

Its holdings have fallen 10 tonnes in 2010 so far, while those of London-based ETF Securities’ gold-backed exchange traded products are down 19 000 ounces in the same period.

Spot silver tracked gold lower to $18.38 an ounce against $18.22. Platinum was at $1 563 an ounce versus $1 554.50, while palladium was at $428 an ounce against $424.

The United States’ first platinum and palladium-backed ETPs are due to start trading in New York later on Friday, which will allow US investors to invest in the metals used in autocatalysts via an ETP.

“Both (platinum and palladium) could gain serious traction should ETF investment demand prove strong,” James Moore, an analyst at TheBullionDesk.com, said in a note.

Investment appetite for the metals is expected to be firm this year as a turnaround in the global economy lifts car demand. Over half the world’s platinum and palladium is consumed by carmakers.

China sold more than 13.5 million vehicles in 2009, the official Xinhua news agency said on Friday, overtaking the United States to become the world’s largest auto market as government policy initiatives spurred demand. – Reuters

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Capital Gold Group Report: Employers Cut 85,000 Jobs in December – Recovery still distant

By Luca Di Leo and Meena Thiruvengadam

JANUARY 8, 2010, 12:20 P.M. ET

WASHINGTON — U.S. job losses were higher than expected in December of last year and the unemployment rate remained at a lofty 10%, a sign the labor market has still some way to recover.

Although the November 2009 data was revised to show the U.S. economy added jobs for the first time since the recession began two years earlier, the December payroll number was worse than forecast.

Nonfarm payrolls fell by 85,000 last month, compared with a revised 4,000 gain in November, the Labor Department said Friday.

Economists surveyed by Dow Jones Newswires had expected a payroll decrease of just 10,000. The November figure originally showed an 11,000 drop in payrolls. . .

. . . The central bank’s rate-setting committee left interest rates close to zero mid-December in the face of low inflation and still-high unemployment. Since the financial crisis began in 2007, the Fed has slashed its benchmark lending rate from a peak of 5.25%.

Minutes of last month’s meeting, released earlier this week, showed that Fed officials remained worried about the labor market’s weakness. “Several participants observed that more than one good report would be needed to provide convincing evidence of recovery in the labor market,” the December minutes showed.

Fed officials have predicted the unemployment rate will average between 9.3% and 9.7% in the fourth quarter of 2010 due to a slow recovery.

The U.S. economy is expected to have expanded at a healthy pace in the second half of 2009, but the jobs market’s weakness, tight bank lending and a fading government stimulus is seen keeping the recovery contained.

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Capital Gold Group Report: Gold futures rise for fourth day on inflation worries

By Moming Zhou, MarketWatch

Jan. 6, 2010, 9:45 a.m. EST

NEW YORK (MarketWatch) — Gold futures rose Wednesday for a fourth straight session, climbing above $1,130 an ounce on concerns that the ongoing economic recovery could bring higher inflation, increasing gold’s investment appeal.

The four-day winning streak, the longest in one month, came after the metal declined more than 7% in December, the biggest monthly loss in 14 months.

Gold for February delivery gained $11.40, or 1%, to $1,130.20 an ounce on the Comex division of the New York Mercantile Exchange, after rising to $1,133 an ounce earlier in the session.

“The global economy is improving at a faster pace than expected, and the net result is increased demand for products, which causing a [price] rise in commodities,” said Brian Kelly, chief executive of Kanundrum Research, a commodities and macroeconomic research firm.

“Investors are interpreting these price increases as inflationary and are buying gold as a hedge.”

Economic data coming out Wednesday reinforced hopes for an economic recovery. Private-sector firms in the U.S. eliminated 84,000 jobs in December, according to the ADP employment report. It was the fewest jobs lost since March 2008.

Wednesday’s gains in gold came despite a stronger dollar, which tends to add downward pressure on dollar-denominated commodities. In currencies trading, the dollar index was last up 0.1% at 77.705.

“Strength in gold in the face of a stronger dollar is quite bullish for the yellow metal,” Kelly said.

Holdings in the SPDR Gold Trust, the biggest gold exchange-traded fund, stood at 1,128.75 metric tons Tuesday, unchanged from a day ago.

In other metals, March silver gained 1.2% to $18.01 an ounce, March palladium added 0.3% to $423 an ounce and April platinum rose 1.3% to $1,558 an ounce.

March copper gained 1.9% to $3.479 a pound.

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Capital Gold Group Report: Gold Rises Despite Dollar’s Lift

by Alix Steel, 1/6/10

NEW YORK (TheStreet) —

Gold delivery for February was rising $9.60 to $1,128.30 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,133 and as low as $1,116.80 despite a stronger U.S. dollar. The U.S. dollar index was rising 0.14% to $77.75.

Silver prices were rising 20 cents to $18 an ounce while copper was up 6 cents to $3.47.

Investors were turning to riskier assets like commodities ahead of the Federal Reserve’s FOMC minutes and Friday’s U.S. unemployment number.

In the short term, investors will monitor the Fed’s language looking for any hints of an interest rate hike; a better than expected jobs number might also raise the expectation of higher interest rates. Higher rates would quash inflation fears, support a strong U.S. dollar and put pressure on gold prices.

Today’s ADP unemployment report showed that nonfarm private jobs decreased 84,000 from November to December. Although this was the smallest decline since March 2008, job losses are still mounting.

“If the numbers come out better than expected [on Friday] it’s probably going to reinforce the positive risk trade,” argues Nicholas Brooks, head of research and investment strategy for ETF Securities. “Investors are, at the moment, still looking for confirmation that the recovery is durable. I think they will start worrying about the interest rate element further down the line.”

Gold prices started off strong Tuesday, touching $1,128 an ounce, but fell throughout the day settling to $1,118.70 as the dollar gained strength. Although worries over an interest rate hike are capping gold’s bull run, prices are finding strong support from bargain hunters. “The risk trade seems to be back on again. The VIX is now sitting at its lowest level since 2007,” says Brooks. “The dollar is coming off a bit and gold prices are starting to pick up a bit.”

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Capital Gold Group Report: Gold Gains 24% for the Year – Up $21 on Dollar Weakness

by Alix Steel
1/4/10

NEW YORK — Gold prices pop in the New Year.

Gold prices continue their inverse correlation to the U.S. dollar as trading resumed in full force Monday. Gold ended 2009 just under $1,100 settling at $1,095 an ounce as the precious metal locked in a 24% gain for the year. “We’re starting off very strong [in 2010]….We’ve got all the technicals back that we were looking for”, says George Gero, vice president of global futures at RBC Capital Markets. “We’ve higher open interest and higher volume….We’re back to $1,100 on the low side and probably $1,200 on the upside for this year.”
The U.S. dollar index was slipping .61% to $77.39 pushing gold prices higher by $26.60 to $1,122.80 an ounce at the Comex division of the New York Mercantile Exchange. Gold delivery for February, the most actively traded contract, has traded as high as $1,124.60 and as low as $1,093.80. A stronger than expected nonfarm payroll report on Friday will boost investor confidence in an economic recovery which could strengthen the U.S. dollar and put pressure on gold prices. Gero says gold could see some short term pressure but he thinks any negativity is already priced in.

Silver prices were rising 55 cents to $17.39 while copper prices were up 6 cents to $3.41.

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