The XAU and HUI started up and stayed up for the entire day, falling off just a bit at the end and closing up 2.2% and 2.74% respectively.  The U.S. Dollar Index lost 0.78 points to 88.71.

The major indices were mixed and turned lower by days end, with the Dow losing 0.34%, the Nasdaq losing 0.27%, and the S&P losing 0.3%.

Oil prices also edged upward as worries about a Norwegian strike/ lockout could lead to a shut off of almost all oil and gas output.  Oil rose $0.53 to $38.10 a barrel.  More

At least 92 people were killed in 5 Iraqi cities in an attack aimed at sabotaging the handover of Iraq that is now just 6 days away.  More

At least two separate explosions in Turkey killed and injured several just 4 days before a NATO summit taking place there.  One bomb exploded just outside the hotel President Bush is expected to stay at.  More

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U.S. orders for durable goods unexpectedly dropped 1.6% in May after they were expected to rise 1.6%.  Excluding transportation equipment, orders fell 0.7% following a 1.7% decrease.  More

Sales of new U.S. homes surged well past expectations in May to a record high.  Sales of new homes jumped 14.8% to a seasonally adjusted annual rate of 1.369 million units from an upwardly revised 1.192 million in April.  More

The number of Americans seeking jobless benefits rose more than expected last week.  First-time claims for state unemployment insurance rose 13,000 to 349,000 in the week ended June 19 from 336,000 the prior week.  More

Several earnings reports were also released today.  More

“The Bundesbank, the second-largest bullion holder after the U.S. Federal Reserve, considers gold a form of ‘natural hedging against strong swings in the dollar’ and is giving it ‘an important role’ in the management of its funds, Weber said, according to Die Zeit.”  More

à Special offer: Try a $25 one-month trial period today. Get alerts sent to your inbox when the market moves! Excerpt from today's alert:

"

This commentary is not intended to opine on geo-political situations but rather discuss their impact on our investment subject, gold.  In the last report issued on Sunday, I mentioned, “I do not focus too much on the geo-political problems facing the world and specifically the United States (Iraq), but these woes are just adding to the lucrative nature gold provides capital as a safe haven status.  I do not see much of any premium in this gold market being attributed to this specific problem.  Yet, I view the current situations such as Iraq giving gold another reason why it is more likely to finish bottoming in the coming weeks and move firmly above $400/ounce.  As (U.S.) elections approach, the terrorist threat perception will likely grow as well and hedging this risk will become evident as participants establish positions in gold.”

After many dull sessions, gold was able to hold just below key resistance levels.  Early this morning, as news from Iraq came in along with a bombing in Turkey, among other troubling news, gold began its ascent to and past the $400 mark.  Adding fuel to the fire was a terrible May durable goods order number which came in at -1.6% which was worse than the +1.5-2.0% increase expected.  Adding to the decrease were the decline in auto sales.  Weekly jobless claims went up last week too touching 349k with expectations for a 340k reading.  But not all was bad on the economic front.  The housing market continues to be on fire! New home sales hit record levels as it blew past market expectations.  May sales came in at a seasonally adjusted 1369k while they revised April from 1093k to 1192k!

There you go – an economy in such a limbo with business data weak and the seemingly always hot consumer expanding the housing bubble to record levels.  Overall, for an economy supposedly doing very well, it appears that the consumer is (still) the driving mechanism here, but a weak job market, massive debt and rising rates are all going to challenge their binge buying in the months, years ahead.

Safehaven buying sent bonds lower at the open along with the weaker orders data as the 10-year rate fell from 4.69% to 4.63% at 1:30 EST.  Gold just closed the day near its highs as the spot price settled at $402.60 – up $8/ounce!  Silver surged too adding $.29 to $6.16! Metal equities, some of them with gap opens unfortunately, are roaring higher today as well. More importantly, the surge in gold and silver equity prices come after very light trading in the recent weeks.  Today is shaping to be different with our gold producing leader Newmont currently trading 4.5 million shares – which places it to project an average daily volume for the day.

Last report mentioned, “At this point, over the next few weeks, it appears the current trading range has a good potential of breaking out with more of a likelihood it will be above the $400 mark.”  Today’s close did indeed achieve this objective and now places us in the likelihood that $410 will be up for testing now.  The Euro is higher today as well but currently at 1.2174 under the 1.2175 resistance.  As the Euro is a large driver in the price of gold, breaking 1.2175 on a closing basis here could pave the way for a 1.23-1.235 test.  This would coincide with gold testing $410.

More analysis tonight in a new Gold Seeker Report!"

- Contributing authors: Chris Mullen & Peter Spina

All sources are given within the report and most articles can be found as they are released at http://www.capitalupdates.com/

The Gold Seeker Daily Report is a free edition providing a daily wrap-up of gold & gold-related news.  For more in-depth analysis of the gold markets, subscribe to Gold Seeker.

© Gold Seeker 2004

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-- Posted Thursday, 24 June 2004 | Digg This Article