Gold closed down $2.90 today at $462.40 and silver closed down .04 at $7.25.

Gold closed up $7.00 in NY today at $469.40.  Silver closed up .07 at $7.32.

Gold fever heats up in New Zealand
Wednesday Sep 28 20:42 AEST
The search for gold and minerals is heating up across New Zealand with the amount spent on exploration and prospecting soaring by nearly 130 per cent in the past year.

Crown Minerals, a branch of the Ministry of Economic Development, said the jump was boosted by an increase in gold exploration in the Coromandel region.

Prospecting is counted as low-impact activity such as aerial surveying or taking rock samples while exploration includes drilling holes and major earthworks.

Last month, the High Court at Auckland confirmed an Environment Court ruling against a prohibition imposed by the Thames Coromandel District Council in 1998 on mining in coastal and conservation zones and in all recreation and open- space policy areas.




Crown Minerals said the new statistics reflected the strong state of the sector here.

The area with the most expenditure on prospecting was Bay of Plenty (which includes the Coromandel-Taupo volcanic zone gold province), where more than $750,000 was spent. The Northland and Southland regions also saw a large increase in prospecting.

Crown Minerals also said that the world's largest gold company, Newmont Mining, had been given 10 gold and silver exploration permits for areas in the southern Coromandel near Te Aroha.

The Crown owns all oil and gas reserves beneath the land's surface as well as all gold, silver and precious metals. Royalties are paid to the Government as part of the mining process. Coal, however, is different, with much of it privately owned.

So far this week Gold is up over $7.00 and silver up .12 with the euro virtually unchanged

From Money Week:

Gold Gains Are Set To Continue
The most exciting recent action in commodities has been the soaring gold bullion price. Just a few weeks ago, we said that it was only the level of $450/oz that stood between the current price and our intermediate target of $500/oz – we have said that we expect $500/oz to be hit, probably later this year. Low and behold – crash, bang, wallop - $450/oz has been swept away and before we can blink the price has been as high as $475/oz. Halfway between where we were a few months ago ago and $500/oz.

Not for the first time this year, gold has prospered in spite of dollar strength. The effect is that gold is now a major investment opportunity in most currencies. The audience for this investment opportunity is now global.

Demand for gold outstrips supply, helped by investor interest, a very significant increase in jewellery demand in India and China, and an end to this year’s Central Bank selling. They have sold their quota for the current year and the Argentine Central Bank is even saying they might purchase gold.

Today gold closed up $270 at $472.10 and silver closed up .16 at $7.48. The ratio of gold to silver is now 63.1 to 1.

When the US market opened gold was up .70 at $472.80 and silver up .04 at $7.52 in London.

A historical perspective of silver supplies might be helpful: A half century ago, at the end of World War II, total known (i.e., above-ground) stocks of silver were over ten billion ounces, with the U.S. government holding 4 billion ounces of that total. At that time we were entering an era of unprecedented global economic expansion and prosperity which has lasted to the present.

For the past two years the US has had to purchase silver to satisfy the demand for the silver eagle. The US no longer has any silver bullion.

I posted the following information on StockSpot in March.  It is starting to look like I may have been giving a little too much time on the squeeze.  The lease forward rates are really putting pressure on the paper playing shorts.

I sold out my silver bullion in 1980 at $37.00 which was a little early as it continued to go just above $50.00 but dropped back in a very short time. I had no silver until I purchased 1,000 ounces in 1989. I have added to that from time to time with my last purchase just a few weeks ago. OPINION! I am mentioning this because I believe that there will be a squeeze on the silver shorts within the next year that will create a rapid increase in the price of silver that is unprecedented. They will need to cover with cash because there isn't a two years supply available. Even if the world supply was large enough to cover the shorts the demand would first go to industrial needs and other applications.

The industrial explosion in China, India and other countries will put even more pressure on the price of silver. Everyone have a great day.

Jerry

For the week gold closed up $5.60 at $468.70 and silver closed up .15 at $7.42.

I hold stock in one of these companies and it has increased by 150% in the past few months.  It would appear that the South African gold stocks may be finally having a meaningful upswing.

JOHANNESBURG (Mineweb.com) --The rand gold price has again breached R3,000/oz, which if sustained could lead to a further 15% -20% jump, according to technical analyst Gregor Krall of BOE Private Clients in Cape Town.

“I would like to see this sustained for a few days so that it can gather some strength,” Krall told Mineweb on Friday afternoon, “Then we could see it (rand gold price) adding another 15 to 20%.”

The domestic gold price last closed above R3,000/oz (R96,452/kg) in the beginning of 2003, according to Bloomberg data.

The dollar gold price has again been testing 17-year highs, while the rand is still hovering above R6.35 to the dollar.

Krall points out that Krugerrands are trading on a R200/oz premium to spot gold at about R3,200/oz which is also an important fact. Of course, Krugerrands have always been at a premium in a country that has strict exchange controls.

“If gold does happen to weaken to around the R2,880/oz that is a good buying opportunity,” says Krall.

Good news for South African gold companies as well, is that the average spot price for the quarter to end-September has averaged about R2,861/oz (R92,000/kg) its highest quarterly average since Q4 2003 when it averaged about R3,100/oz (R99,667/kg). In the three-months to June this year it averaged R2,747/oz.

Although many fund managers will tell you, that a much higher gold price has been priced into these shares, implying they are expensive.

Krall also says that the gold index also seems set for more gains. “It has lagged the overall index for a long time now,” says Krall, “I think we are in the early stages of a bull run, and over the next couple of years it should outperform the overall index.”

The gold index is currently sitting on about 2,176 points, its highest level since October 2004, the same month Harmony made its hostile bid for Gold Fields.

On Friday, Gold Fields for the first time recovered to the same level, about R94 a share that it was on the trading day before Harmony made its bid. Harmony, in comparison, was trading at R71.17 a share on Friday, below the R83.50 a share it was valued at just before the bid.

AngloGold Ashanti, the Johannesburg bourse’s largest gold stock, hit R280 a share on Friday, a 19-month high.

On the other end of the scale, DRDGold, was trading above R9.00 a share, levels last seen in December.

All four of these company’s share prices have moved up by over 20% in September, with Harmony up the most with a 51% price jump. About 90% of Harmony’s gold comes from South Africa, the highest exposure of the four.

Silver lease rates are up again today which virtually squeezes out any viable rollovers.  If the rates do not come back down the silver shorts are in a squeeze and will have to cover.  It is not against the law to sell silver that you don't own but it is against the law not to cover the sales within a specific amount of time.  The one year,  six month, three month and two month contracts are no longer viable unless rates come down. The one month contract is on the edge of joining the others.

This morning the US dollar is weakening against the euro. Gold and silver have come back from the down side in London. Gold is now up .40 at $466.00 and silver up .02 at $7.42.

Gold and silver have started to move with gold now up $6.10 at $471.70 and silver up .09 at $7.49.

Today gold closed up $6.20 at $471.80 and silver closed up .13 at $7.53.