This post was written by Minyanville contributor Lance Lewis.

Just after the close yesterday, Newmont Mining (NYSE: NEM) guided up 2009 production and guided 2009 cash costs lower. NEM also announced that it would be purchasing the remaining interest in its majority owned Boddington Mine from Anglogold Ashanti (NYSE: AU) (which equates to 6.6 mln reserve ounces). That's an increase of 8 percent in NEM's Proven & Probable (P&P) reserves at a price tag of $1.2 bln, which will be raised via an equity offering of 19 mln shares.

Based on NEM's 441 mln shares outstanding, we're looking at dilution of just over 4 percent. Thus, in theory, the deal is not even dilutive, given the 8 percent increase in P&P reserves that the company is acquiring with only a 4 percent dilution in equity. Based on what I have seen so far, this looks like a spectacular deal for NEM.

Gold is trading down $19 today, and pulling several major gold stocks down to new 52 week lows in reaction to the drop in the precious metal.

If you follow gold prices, you know that the past month has not been kind on the commodity, with prices falling from above $900 an ounce a few weeks ago down to its current price of $716.30. Earlier in today's session we actually saw prices trading much lower, breaking through the psychological $700 barrier, and falling all the way down to $695.20 an ounce. This is the first time in 13 months that gold has been under $700, and marks a huge drop from the highs it set back on March 14, when it was at historic highs above $1000 an ounce.

Typically, you would think that recessionary times in America would lead to a rise in gold, but this time around things are a bit different. Not only is America in hard times, but countries all around the world are dealing with their own economic slowdowns, which in turn is pushing currencies around the world lower. As this happens, the dollar, despite the current state of the American economy, has been strengthening against its foreign counterparts. As we all know, gold trades inversely proportionate to the dollar, so any strength in the American currency will result in gold prices dropping, and that is part of what we are seeing right now.

"Don't sell commodities; although they have been in a bruising correction, they can also recover quite sharply," says resource expert Eric Roseman .

In his Commodity Trend Alert, the advisor adds, "And I can't think of a more undervalued gold mining company than South Africa's AngloGold Ashanti (NYSE: AU)."

"The forces of inflation and deflation are now fighting each other for the first time since 2001 and ultimately, inflation will win. For the Fed and other central banks the strategy is to rescue the global financial system from the economic abyss or deflation; that means print credit like there's no tomorrow.

"For the Fed and other central banks the strategy is to rescue the global financial system from the economic abyss or deflation; that means print credit like there's no tomorrow.

"The Fed, the ECB, the Bank of Japan and their international buddies are going to accelerate the expansion of credit to avoid a devastating deflation. Thus, I'm betting on inflation. I'm also betting on gold, my gold stocks.

MOST NOTEWORTHY: Level 3 Communications, BT Group and Limited Brands were today's noteworthy downgrades:

• Merriman downgraded shares of Level 3 Communications Inc (NASDAQ: LVLT) to Neutral from Buy, as they believe the risks outweigh the rewards until the company can complete its integration and turn FCF positive.
• BT Group Plc (NYSE: BT) was downgraded to Equal Weight from Overweight at Lehman to reflect the company's slowing revenue growth.
• Bear downgraded Limited Brands Inc (NYSE: LTD) to Peer Perform from Outperform, citing the unfavorable macro backdrop, execution issues and management turnover.

OTHER DOWNGRADES:

• Societe Generale lowered its rating on GlaxoSmithKline Plc (NYSE: GSK) to Hold from Buy.
• Morgan Stanley downgraded Cox Radio Inc (NYSE: CXR) to Equal Weight from Overweight.
• UBS dropped Anglogold Ashanti Limited (NYSE: AU) to Neutral from Buy.

While looking for a present for my daughter's birthday last week, I wandered into a jewelery shop but just as quickly as I dropped, I headed out. Not being one of those big shoppers, I suffered an intense bout of sticker-shock when I saw how much a simple gold necklace would have set me back.

Bloomberg ran a story this morning saying the ride is not over. It seems prices are set to go even higher when news hit that Africa's top producers AngloGold Ashanti Ltd. (NYSE: AU) and Gold Fields Ltd. have halted output because of a power shortage.

Gold, which surged 31% in 2007, has gained 9% since the start of this year, breaking through $914/oz. Production issues, inflationary pressure and market volatility were all cited as reasons for gold's recent surges.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.