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Nov 5, 2009


Fed statement may let gold continue upward course

By Allen Sykora
The Wall Street Journal
Wednesday, November 4, 2009
Federal Reserve officials did not offer any hints Wednesday on when they might start to tighten monetary policy for the foreseeable future, which may well mean a green light for further gains in gold.
Analysts said there were at least some concerns ahead of time that the Fed language might have changed just enough since the last meeting to be seen as the first sign that policy-setters might start tightening down the road as the economy improves.
But this did not happen, they said, with the statement after a two-day meeting saying conditions "are likely to warrant exceptionally low levels of the federal funds rate for an extended period" of time.
"The Fed inaction allows gold to continue on course," said Dave Meger, director of metals trading at Vision Financial Markets.
The Fed statement may mean many traders will remain bullish in gold, plus equities, for the rest of the year, said Adam Klopfenstein, senior market strategist with Lind-Waldock. He suggested it now may be the middle of 2010 before policy-setters start to seriously consider hiking rates.
"The Fed is still a little timid about raising rates in the short run," he said. "That indicates the bullish case for owning gold is still there."
Continued low rates help gold two ways, explained Joe Foster, portfolio manager with Van Eck International Investors Gold Fund.
"I don't think they have intentions of reining in their liquidity anytime soon," he said. "It's negative for the dollar for the Fed to continue with these policies at the same time other regions in the world are starting to show growth."
The central banks of Norway and Australia have hiked interest rates recently, while the Federal Reserve maintains its accommodative stance. Thus, a widening interest-rate differential may weigh down the already weak greenback further.
"Anything that is negative for the dollar is good for gold," Mr. Foster said.
Furthermore, if the Fed keeps rates at historically low levels for a longer period of time, this increases the potential for inflation further into the future, Mr. Foster said. Investors often buy gold as a hedge against inflation, as well as dollar weakness.
Problematic inflation in the U.S. may not kick in yet for a while as the economy and joblessness remain high, Foster said. It could be 2011 or 2012 before the inflation bogeyman rears his head.
"You'll see the credit markets and commodities markets react to that before we actually see inflation in the CPI [Consumer Price Index] numbers," Mr. Foster said.
Meanwhile, other constructive factors for the gold market remain at play, Mr. Meger said. This includes producers unwinding hedge books sooner than previously planned, expectations for strong investment demand for gold, technical momentum and weakness in the dollar.
Roughly an hour after the FOMC statement, December gold hit a high of $1,098.50 an ounce in electronic screen trading, a record for a most-active contract on the Comex division of the New York Mercantile Exchange.
"Between now and year-end, it wouldn't surprise me to test $1,200," Mr. Foster said.

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  • Thorough analysis of the data has revealed the existence of two significant EM anomalies in a prospective stratigraphic horizon, extending from ground level to more than 100m below the surface;
  • Located at the southern end of the well known Stollberg historic mineral field and has a similar geological setting, where numerous deep, abandoned silver and base metal mines are found along a north-south trending belt over a distance of 12km. Production records indicate that the historic Stollberg mine produced 3.7 million tons of lead-zinc-silver ore until its closure in 1981;
  • At Tumi's 100%-owned and drill-ready Vitturn Project an IP survey completed in May 2008 near the northern end of the Stollberg field revealed the existence of a coincident high chargeable-low resistivity body. An IP survey is currently being planned for this area to further delineate any drill targets. The chargeability 400 metre anomaly map of the Vitturn area may be reviewed on the front page of the Company's website.
Says David Henstridge, President & CEO:
“It is encouraging to see that Tumi's exploration strategy has worked so well in Sweden and that we have been able to locate four very promising exploration targets even though we are a small company with a limited budget. Though Sala remains one of our key properties, the recent discovery of the Jonsmossen EM anomalies shows that our exploration philosophy is sound and that our claims provide a solid base for further exploration in the Bergslagen district. The Vitturn project is drill ready along with a drill target in our Tomtebo licence and Jonsmossen is awaiting further geophysical surveys. We will move ahead with all of our Swedish projects as soon as suitable financing has been arranged.”
Dear Friends:

An excellent exploration ten (10) project portfolio in Sweden with multi-project drill targets.
I am in Munich and will be in Switzerland next week to assist the Company in securing drill-test financing for the first four (4) of Tumi's drill-ready and highly prospective exploration projects. If any of you are interested in this financing then please call me (604) 657-4058 or respond to this e-mail.
As always - - - Stay Tuned!!


Nick L. Nicolaas
Mining Interactive "Ahead of the Pack" 

November 5, 2009
Nick Nicolaas, Editor

•“The Bergslagen district
[of Sweden] is... one of the most important ore districts in Europe, containing deposits of iron, manganese, base-metal and silver sulphides.
The district contains the well known historic and current Sala, Falun, Garpenberg and Zinkgruvan mines.”
– David Henstridge, President of Tumi Resources

David Henstridge headshot
"Tumi's hands-on management is highly qualified and has a large network of contacts to identify and acquire silver properties of high merit to enhance shareholder value on a continued basis."

----David Henstridge, President & CEO, Tumi Resources