Crocodile Gold (CRK.TSX) announced that it achieved a 47% improvement in development meters at its Cosmo underground mine in January 2012 on a month-over-month basis.  The Company developed 90 meters of ore last month, producing 10,900 tonnes grading 3.0 grams per tonne of gold, an underground development record.

Highlights:

* Crocodile Gold produced 3,300 ounces in January, which coincides with the Company’s full-year guidance

* The Company expects development meters and underground production at Cosmo to remain at a similar level in February

* At the Union Reefs area – also in Australia – a 10,000 meter drill program during the first half of 2012 is concentrating on defining the area below and between the Crosscourse and Prospect deposits

Chantal Lavoie, Crocodile Gold’s President and CEO:

“2012 promises to be a very exciting year for the Company on numerous fronts. Cosmo development is ramping up as planned, gold production for the first month of 2012 is in line with guidance for the year, our exploration activities in the Union Reefs area continue to show great promise and our strategic initiatives continue to progress very well.”

David Keough, Crocodile Gold’s Chief Operating Officer:

“The ore processed at the Company’s Union Reefs Mill was 20% above the tonnes processed in January 2011, which reflects measures taken to minimize processing downtime associated with the wet season as well as a lower than normal start to the Monsoons which occur yearly from November to May.”

Gold and silver futures rebounded substantially from earlier losses in Wednesday afternoon trading.

The move higher in precious metals did not coincide with U.S. dollar weakness or significant volatility in the broader markets, however.  Instead, the comeback was driven by noticeably higher volumes on the COMEX, particularly at near 1:05pm ET.

COMEX gold futures, per the April contract, fell to an intra-day low of $1,750.70 this morning but later settled up $12.80, or 0.7%, at $1,771.30 per ounce.  Following the COMEX close, the yellow metal hit $1,783.40 in electronic trading – its highest level in over three months.

Silver futures also recouped earlier losses, rising from as low as $33.90 to fractionally higher at $34.495 per ounce this afternoon.

Other precious metals posted solid gains, with platinum climbing 2.6% to $1,728.80 per ounce and palladium rising 1.6% to $722.15 per ounce.

The metals’ rally propelled shares of most gold and silver companies higher, as the Philadelphia Gold & Silver jumped 1.6% to 201.35.

Notable gold miners posting gains included Agnico-Eagle Mines (AEM) and Newmont Mining (NEM). AEM added 2.7% to $37.51 per share and NEM headed north by 2.0% to $62.79 per share.

Among silver producers, Pan American Silver rose 0.9% to $24.84 per share and Silver Standard Resources (SSRI) advanced 1.5% to $16.72 per share.

While commodity prices have surged thus far in 2012, Goldman Sachs offered a bit of caution for investors expecting further gains this year.

In a recent note to clients, analysts led by Jeffrey Currie lowered the firm’s 12-month expected return forecast for the broader commodities complex to 12% from 15% – according to a Bloomberg report.

Goldman Sachs did maintain an “Overweight” rating on the sector, however.

Although the firm reduced its general outlook, it remained quite bullish on two commodities in particular – gold and oil.  Goldman reiterated its 2012 average gold price target of $1,940 per ounce.  As for oil, it contended that “With much of the ‘value’ opportunities behind us, we look to fundamental drivers for further expected gains in 2012, which we believe will be centered in the oil complex.”

Elsewhere, the firm noted that it sees “little outright opportunity” in agricultural commodities such as corn, wheat, and soybeans.

Spanish Mountain Gold (SPA.TSXV) announced plans to proceed with a Feasibility Study (FS) for its Spanish Mountain Gold Project in central British Columbia, Canada.  The emerging gold Company reported that it will retain the same team of professionals, led by Tetra Tech (formerly Wardrop) as Project Manager, to complete a National Instrument 43-101 compliant feasibility study, by the third quarter of 2013.

Spanish Mountain Gold began a Pre-Feasibility study (PFS) on the Project in August 2011 and noted that it may choose to initiate a FS without prior completion of the PFS.  In light of the recent discovery of the Phoenix Zone – located approximately two kilometers west of the Main Zone within the Project area – the Company believes that the optimal strategy is to quantify and include the new Phoenix zone in the Project’s economic studies without adversely impacting the schedules for the completion of the FS and the subsequent potential mine development.

Highlights:

* Prior to the completion of the definitive FS, the Company expects to provide a technical report during the third quarter of 2012 that will refine the estimates of capital and operating costs forming the basis for the Preliminary Economic Assessment completed in December, 2010

* In conjunction with the ongoing economic assessment of the Project, the Spanish Mountain Gold has started in-fill drilling of the Main Zone with the objective of enabling a further re-classification of the multi-million ounce inferred resource to the measured and indicated categories

* The Company also plans to further define the Phoenix Zone with an initial drill program totalling approximately 15,000 meters with the aim of publishing an initial resource statement for this deposit in the inferred category within the next six months

Brian Groves, President and CEO stated: “The discovery of the Phoenix Zone in the Cedar Creek area has the potential to significantly enhance the economic robustness of the Project. We are focused on defining the financial impact of the discovery of Phoenix for the Project and for shareholders. It is a rare occurrence to both discover a new zone of mineralization at this stage of project development and to have the financial resources to demonstrate the value of the discovery.”

Paul Dietrich, Foxhall Capital Management:

“This Canadian gold mining development company… has, by my calculations, some of the cheapest in-the-ground gold in the world that is located in a politically stable country.”

GOLD PRICE NEWS – The gold price retreated Wednesday morning, falling $6.70 to $1,753 per ounce.  Today’s small decline in the price of gold follows yesterday’s $24.10, or 1.8% surge amid a broad-based rally in precious metals.  In doing so, the spot gold price settled at its highest level in three months and extended its year-to-date gain to 12.5%.  The SPDR Gold Trust (GLD), a proxy for the price of gold and the sector’s largest ETF, backed off to $170.28 after climbing 2.2% yesterday.

S&P 500 stock futures fell 2.20 to 1357.90, sinking after weaker than expected economic data out of Europe.  Europe’s purchasing managers index fell to 49.7, well below the 50.5 consensus estimate according to a Bloomberg survey.

Silver slipped $0.28 to $34.03 per ounce early Wednesday after jumping 2.0% on Tuesday.  The iShares Silver Trust (SLV), the world’s largest silver ETF, closed higher by $1.10, or 3.4%, at $33.38 per share.  With its advance, gold’s sister precious metal stretched its ascent in 2012 to 24.1% and reached its best level since mid-November.

Gold shares powered higher alongside the gold price, with the Market Vectors Gold Miners ETF (GDX) climbing $1.67, or 3.1%, to $55.82 per share.  On a year-to-date basis, the GDX has now gained 8.5%.  Among the large-cap gold miners, notable advancers on Tuesday included Kinross Gold (KGC), Newmont Mining (NEM), and Yamana Gold (AUY).  KGC rose by 3.7% to $11.36, NEM by 3.5% to $61.54, and AUY by 3.9% to $17.14 per share.

In contrast to the gold sector, the broader equity markets finished near unchanged.  Although the Dow Jones Industrial Average (DJIA) briefly surpassed the 13,000 level for the first time since May 2008, the benchmark index closed higher by just 0.1% at 12,965.69.  As equities pared their gains, the CBOE Volatility Index (VIX) rose 2.4% to 18.19.

Yesterday’s gold price rally was driven by macroeconomic news from across the globe.  In Asia, the People’s Bank of China (PBOC) lowered its reserve requirement ratio for the nation’s banks by 25 basis points.  The measure was implemented in an effort to stimulate lending and enhance liquidity in the Chinese financial system.

Commenting on the impact of the PBOC’s decision on the price of gold, analysts at VTB Capital stated that it was “good news for gold in the long run as bullion remains an attractive alternative to major currencies.”  The firm added that “Real interest rates are negative in major developed nations while developing nations are also playing their part in currency wars, fearing rapid appreciation of their domestic currencies against weak benchmarks.”

In Europe, reports that a deal was reached to provide Greece with its next round of bailout funds – totaling €130 billion – helped the euro currency advance modestly against the U.S. dollar.  The exchange rate rose from just under 1.32 prior to the announcement to as high as 1.3250.  In doing so, the decline in the dollar helped propel the gold price to its 1.9% gain.

In a related item, TD Securities’ Global Precious Metals team highlighted in a note to clients that the “Greek debt report prepared for the euro zone finance ministers [revealed] that Greece will need at least twice the current bailout amount and assumptions about future debt reduction are woefully optimistic.”  Looking ahead, the firm contended that “So far, the market has not paid much attention to this report, but something to bear in mind as gold pushes higher.”

Gold and silver shares were sharply higher in Tuesday afternoon trading amid a rally in precious metals and modest weakness in the U.S. dollar.

COMEX gold futures, per the April contract, advanced $32.60, or 1.9%, to $1,758.50 per ounce while silver futures jumped $1.21, or 3.7%, to $34.43 per ounce.

The U.S. Dollar Index slid as much as 0.4% to 78.797 this morning but pared its losses this afternoon.

The Philadelphia Gold & Silver Index (XAU) climbed 2.7% to 198.05, as precious metals stocks were the best performing sector of the U.S. equity markets on the first trading day of the week.  The gains came despite negative analyst commentary on two of the world’s largest gold mining companies.

This morning, TD Securities lowered its target price on Barrick Gold (ABX.TSX, NYSE: ABX) to C$67.00 from C$69.00 per share but reiterated its Buy rating.  “One of our primary concerns regarding Barrick’s production profile has been the relative lack of visibility into its growth prospects,” the firm wrote in its report.  “The company is targeting 9 Mozs by 2016; our forecast gets to 8.4-8.6 Mozs by 2015/2016. We estimate that Barrick will generate 2012 FCF of ~$1 billion based on the updated guidance, which compares with our previous forecast of ~$2.0 billion.

Yesterday, CIBC World Markets downgraded Agnico-Eagle Mines (AEM.TSX, NYSE: AEM) to Sector Underperformer from Sector Performer and cut its price target to C$43.00 from C$54.00 per share.  The downgrade followed disappointing earnings results and production guidance from Agnico-Eagle.  “Our target multiple on the forward curve remains at 0.75x NAV, approximately 10% below the larger producer average,” CIBC noted. “Setting the bar very low and stepping over it is unlikely to warrant an immediate sector valuation premium. We believe a positive re-rating will require at least three to four quarters of solid operating results or good news at Goldex.”

Notwithstanding the bearish commentary, ABX jumped $1.42, or 3.0%, to $48.45 per share and AEM added $1.09, or 3.1%, to $36.53 per share.  Among gold miners, other notable advancers included Goldcorp (GG) and Newmont Mining (NEM), which rose 3.0% and 3.5%, respectively.

As for silver shares, Coeur d’Alene Mines (CDE) tacked on 4.0% to $28.98 per share and Hecla Mining (HL) surged 9.2% to $5.48 per share.

The price of gold is likely to reach a new all-time record nominal high of $2,000 per ounce by April of this year, according to Huntington Asset Advisors’ Peter Sorrentino.

In a recent Bloomberg interview, Sorrentino – a senior fund manager at Huntington – discussed his bullish short-term outlook for the yellow metal.

“Gold had a very substantial run early last year and has gone through a corrective phase,” he noted.  ”Some of this we think is attributable to the MF Global debacle.  We think that frightened some commodity traders and some investors in commodities and that some institutional money headed for the sidelines after that.  But when we look at the amount of U.S. Treasury debt held by our major export partners, we’re beginning to see significant systematic reductions in their Treasury holdings.  They’re I think uncomfortable with holding that much of their reserves in dollar-denominated assets.”

Sorrentino went on to say that “We’re continuing to see central bank buying of gold by China.  Russia has effectively nationalized all production; all the mines have to sell to the central bank.  Venezuela nationalized their mining industry.  We’re seeing gold being bought again in India as well as Vietnam and other countries.  So there’s a continual growing of demand.”

GOLD PRICE NEWS – The gold price spiked Tuesday morning, rising $11.50 to $1,746 per ounce.  News late yesterday that Greece has secured a €130 billion rescue package failed to quell speculation that Greece would eventually be forced out or leave the euro.  Precious metals prices rose on the news.  S&P 500 stock futures relinquished most of their post-announcement gains, but managed to climb 2.30 to 1362.

Gold prices remain mired in the $1,700-$1,750 trading range, awaiting a catalyst to move the yellow metal strongly in one direction or the other.  The spot price of gold finished last week just barely in positive territory, advancing a mere 0.1%.  However, the gold price did snap a two-week losing skid and enters the week with a 10.2% gain in 2012.

Silver followed gold higher this morning, rising nearly 1% to $33.88 per ounce.  Gold’s sister precious metal closed off 0.9% last week, posting its third consecutive weekly decline.  However, notwithstanding its recent weakness, silver’s 19.8% year-to-date ascent makes it one of the top performing asset classes thus far in 2012.

In spite of the stability in the price of gold, shares of most gold producers finished the week in negative territory.  The Market Vectors Gold Miners ETF (GDX) retreated 0.6% to $54.15 per share, marking its third straight week of losses.  The GDX remains higher by 5.3% in 2012, but has cut its gain by approximately half since closing at $57.46 on February 2.  Gold mining stocks moved higher across the board Tuesday morning.

Many of the world’s largest gold mining companies were in the news last week after releasing their latest quarterly financial results.  Barrick Gold (ABX), the sector’s largest producer, reported in-line earnings and production guidance, according to Dahlman Rose analyst Adam Graf.  However, the market reacted negatively to the report, as ABX posted a weekly loss of 2.4% on its way to $47.03 per share.

Other notable gold miners reporting earnings were Agnico-Eagle Mines (AEM), Goldcorp (GG), and Kinross Gold (KGC).  Each gold stock finished the week in positive territory – AEM by 2.1% at $35.44, GG by 2.7% at $47.04, and KGC by 1.6% at $10.95 per share.

Last week, a plethora of U.S. economic data combined with ongoing uncertainty over the Greek bailout to send the gold price oscillating between gains and losses.  Looking ahead to the coming week, a similar slate of items likely to impact the price of gold await.  Euro zone officials will hold additional meetings to discuss the specifics of Greece’s aid package.  Also, the U.S. economic calendar contains several noteworthy reports.

Mark Luschini, chief investment strategist at Janney Montgomery Scott, wrote in a recent note to clients that “Everyone is playing this gigantic game of brinksmanship but I suspect they [Greece and the euro zone] are working toward avoiding default and there will be an agreement. Greece knows what it will have to do and Europe will provide funds.”

Lushini was proved correct and the euro currency is rallying against the U.S. dollar this morning.  The gold price, given its relatively high correlation of late with the euro, is also catching a bid off the news out of Europe.  The currency debasement that will inevitably stem from yet another bailout bodes well for gold’s longer-term prospects.

In the U.S., Existing Home Sales for January will be released on Wednesday, followed by weekly jobless claims on Thursday.  Last week, jobless claims fell to 348,000 – their lowest level since March 2008.  However, a considerable portion of the decline has been due to a drop in the labor participation rate, suggesting that many individuals are dropping out of their labor force.  The week then concludes on Friday with the University of Michigan Consumer Sentiment Index and New Home Sales for January.

Gold and silver futures advanced Monday morning alongside financial markets across the globe after China lowered the reserve requirement ratio for its banks by 25 basis points.

The move by the People’s Bank of China (PBOC) marked the latest maonetary easing measure designed to help stimulate an economy whose growth has slowed considerably in recent months.

Analysts at Citigroup predicted in a note to clients that the PBOC will lower the reserve requirement three additional times by the end of the year.  China’s central bank has lagged “behind the curve” and has “to catch up with more easing to repair already damaged credit demand,” the firm wrote.

Equity markets in Asia and Europe largely moved higher on Monday following the Chinese decision, while the U.S. Dollar Index fell 0.4% to 78.984.

U.S. markets were closed in observance of President’s Day, while S&P 500 futures rose 4.90 points to 1,364.60.

As for precious metals, the weaker dollar helped send gold futures higher by $9.00, or 0.5%, to $1,734.90 per ounce. Silver futures climbed as well, by $0.33, or 1.0%, to $33.61 per ounce.