-- Posted Wednesday, 17 May 2006 | Digg This Article
Sunday, May 14th, 2006
170th Edition
www.radio.goldseek.com
Chris G. Waltzek
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MARKET SUMMARY
*Gold Closes at $710 - Silver $14.20*
PRECIOUS METALS
The gold bulls were running for the ninth consecutive week as the battered bears retreated to their dens. Gold blew past $700 - briefly touching $732, a new 26 year high point. The yellow metal closed at $710 recording a weekly gain of about $35.
Meanwhile Silver climbed above $15 earlier in the week but settled in at $14.21 an increase of about $.30. The new silver ETF reported another increase in its silver holdings. Sources indicate that approximately 10 million more silver ounces have been accumulated, increasing the total to more than 50 million ounces.
Traders once again credited precious metals strength with soaring oil prices, Mideast turmoil and dollar weakness. The dollar continued its perilous slide this week, slicing through technical support at 85. Investors switched to the safe haven of gold and silver. The dollar ended the week near a one-year low, a one year drop of almost 9 percent against the euro.
The gold market was positively impacted by the energy market. Crude oil prices moved sharply higher this week, touching $75 a barrel, increasing inflation fears. The market has been consolidating for one month above the $70 area. Prices settled on Friday near $72. Analysts are concerned that high oil prices will translate into problems at the gas pump during the busy summer months ahead.
Gold and silver climbed higher for the 9th consecutive week. Yet, by Friday precious metals and related stocks gave back much of their gains. After touching $730 in gold and $15 silver, the metals retreated. Furthermore, gold stocks recorded a bearish Japanese Candlestick formation with a long upper wick.
Short term traders should be very cautious at this point. At the very least, I would expect a market consolidation next week and perhaps a sell-off. Long term investors should sit tight, turn off their monitors and enjoy the bull market of the decade!
GOLD STOCKS
The XAU gold stocks index retreated this week after soaring to a new record at 170. The index closed near 160, off about 2 points for the week. The Vancouver based, Bema Gold reported its First Quarter Results. Bema announced record quarterly revenue and gold production. Gold revenue increased by 119% to $47.1 million the highest quarterly revenue figure in Company history. The increase was credited to its Refugio Mine, in Chili. In other news, Barrick cautioned this week that its current mining expansions will not take effect in the near future. Only Increasing the likelihood of tight gold supply. Barrick became the largest gold producer just three months ago when it acquired Placer Dome.
STOCK MARKETS
The major stock indexes fell sharply on Thursday, recording the largest decline in over three months. Concerns over further Fed. rate hikes and climbing oil and precious metals prices worried investors. Increasing imported goods prices combined with lower consumer confidence figures helped to dampen investor enthusiasm.
The Dow Jones Industrials gave up about 200 points this week to close at 11,381. The market Slide began after the Fed's rate announcement and continued into Friday's close. The SPX retreated by near 35 points to 1291 while the Nasdaq lost almost 100 points to close at 2243.
The major Indexes collapsed Thursday and Friday, following the FOMC meeting. Only the Dow remains near support. The SPX fell sharply below support and the Nasdaq gave back about 100 points.
The technical damage was significant in all averages, but worst in the tech laden Nasdaq.
Remember that the Nasdaq was the only one of the three that could not break out. If the correlation holds, the Nasdaq may be pointing to further losses ahead. We'll be watching for signs of a trend change in the weeks and months ahead.
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Radio.Goldseek.com Interview
May 13th, 2006
*Bill Murphy & Michael Covel*
We had a 5 star general in the gold camp on the program, GATA's Bill Murphy. Bill is one of the few gold experts to accurately predict the precious metals explosion. You won't want to miss his gold forecast... Next Up In the Traders Corner Segment, author Michael Covel and I discuss the importance of market trends and delve into the mechanism behind the mysterious but profitable market force.
To Hear The Gold Expert Bill Murphy's Gold & Silver Forecasts, Please Go To:
www.radio.goldseek.com
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*The Gold Guru Predictions*
Dr. Clive Roffey's gold projection: "My analysis indicates that $750 is a short term target for the gold price. A year ago I produced a 70 page report for a leading mining house on the long term future for gold and I came to the conclusion that the market still has a hell of a way to go in both price and time. The 2013 to 2016 area appears to be the potential final topping out time frame for the gold price with levels of at least $1650 to a possible $2350 as the likely target area. But frankly at this stage these prognostications are not of any consequence except to reaffirm the long term investment nature of this gold bull market."
Sid Klein's gold forecast: "...$850 gold was possible this year flew in the face of the bulls' own expectations, as a breakout into an accelerating wave 3 pattern went unrecognized. $850 is where bullishness will finally note that this isn't just a Dollar debasement, but a move that echoes concerns about all-time highs and an imminent $1000/ounce price. We'll see if I consider another intermediate term call for un-invested investors or short term traders, but fully invested SKC readers will be reminded that this wave 3 is within a larger wave 1. Therefore, $2000/ouce is a more reasonable wave three target for this cycle in 2007."
Dr. Marc Faber shared his gold target: "So, at some point, even Asian central bankers, all of whom do not seem to be endowed with any great foresight, will realize that to invest in US bonds and T bills is not the smartest way to manage their reserves. And when this day finally arrives - I suppose when gold will be above $1,000 - additional buying could propel gold prices sharply higher!"
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Bottom Line
The Golden Guru Award of The Week Award, goes to Marc Faber with his $1,000 gold price projection. The average of the intermediate-term pundit estimates for gold lead to a single price target of, $800, a decrease of $15 below last weeks $815 figure.
($750 + $850 / 2 = $800
Thanks for reading.
Chris Waltzek
cwaltzek@comcast.net
Please visit my blog and web site for free daily market articles, audio broadcasts and analysis.
Click Here. http://silverinvestor.blogspot.com/
or http://radio.goldseek.com
and for the entire 4 year archives, click here:
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-- Posted Wednesday, 17 May 2006 | Digg This Article
