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-- Posted Wednesday, 9 March 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

A new 7 month high for the 10-Year Treasury note yield, a new 3 month high for silver, a new 10 week high for gold, a new 24 year high for the CRB index, a new 2 month high for the euro index, a new one month high for the yen, and oil coming within 2 cents of its all time high before falling off to close at 4 month highs while the US dollar, bonds, and major indices fell off were the headlines today as the President spoke on energy and the fed brought up inflation and interest rate worries.

The Beige Book released today showed inflation fears on the fed’s part as mixed messages come from various fed officials.  Bernanke yesterday and Moskow today say a “measured pace” is still likely while Poole stated yesterday that “policy-makers at the U.S. Federal Reserve will have to drop the "measured pace" reference to future interest rate increases eventually, but for now it still makes sense.”  The fed’s Beige Book also noted the economy expanding at a “moderate pace” and found that retail prices were "generally flat or up modestly."  The fed’s next meeting on March 22 will be closely watched both for comments on inflation and any changes in the fed’s current “measured pace” stance in raising interest rates.

Tomorrow brings Initial Claims for 3/5 at 8:30AM EST expected at 310,000.  At 10AM are Wholesale inventories for January expected at 0.6% and at 2PM is the Treasury Budget for February expected at -$98.5 billion.  Traders will also be hedging their bets for Trade Balance data released Friday morning, as they have been all week.

President Bush spoke about his energy policy in Ohio today.  Among his ideas for reducing foreign dependence on oil are new nuclear power and coal plants, drilling in ANWR, using more coal, and finding cleaner ways to use it.  The President also mentioned possible tax breaks for alternative energy and rejected the idea of tapping US oil reserves.

Oil touched came within 2 cents of its all-time high of $55.67 before falling off in afternoon trade as the President spoke and encouraged energy sources other than oil.  “Prices surged despite U.S. Energy Information Administration data showing crude oil stocks were 3.2 million barrels greater last week at 302.6 million barrels -- a fourth straight weekly rise and the biggest stockpile in eight months.”  Oil sold off into the close but still ended with a gain of $0.18 to $54.77 to make a new 4 month high.

The 10-Year Treasury note yield opened markedly higher today and increased its gains with the release of the fed’s beige book, making new 7 month highs.  The yield gained 0.139 points to 4.514% as the March 2005 US Treasury bond lost 14/32 to 111 20/32, or 1 18/32 lower than its previous close as it opened the day over a full point lower to begin with.  “Traders could offer no single reason for the move, just as on Tuesday when prices fell sharply, but the uncertainty itself was bearish. Much of the selling came from leveraged speculators seeking to break technical triggers and some dealers also heard talk of sales from Asian central banks.  Lurking in the background were worries about incipient inflation given sky high commodity prices, rising oil, a falling dollar, a tightening labor market and a U.S. economy growing above trend.”

The Dow, Nasdaq, and S&P fell again today on oil and interest rate worries and fell below their breakout levels breached last week, a pretty bearish sign.  All three indices started the day lower with the Dow and Nasdaq briefly seeing gains about 11AM before falling off for the rest of the day and joining the S&P in closing at or near their lows.  The Dow lost 0.98% to 10805.62, the Nasdaq lost 0.59% to 2061.29, and the S&P lost 1.02% to 1207.01.

The U.S. dollar index sold off yet again today and lost 0.27 points to 81.71, a new 2 month low.  “Technical weakness, concern over the U.S. external deficits and their funding, constant talk of central bank reserve diversification and Middle East tensions and instability were all cited as reasons to be wary of holding dollars.”  The euro index extended its two month highs and gained 0.71 points to 134.12.  The yen advanced to a one month high on strong Japanese growth and gained 0.77 points to 96.31.

Gold & Silver Report from GoldSeek.com & SilverSeek.com:

Gold and silver extended their winning streak today with a little weakness at the start of today’s New York session being offset by afternoon rallies that led both metals to close near their highs.  Gold made a new 10 week high and gained $1.70 to $441.70 while silver made a new 3 month high and gained $0.10 to $7.59.

Gold and silver equities rose throughout the morning and peaked with over 1% gains at about 2PM before falling off into the close, but still ended with gains.  The new gold ETF’s spent the morning barely lower before rising in afternoon trade, but also fell off in the last two hours of trade to end mixed.

Gold & Silver Stock News Update from GoldReview.com:

Iamgold’s, Queenstake’s, and Yamana’s earnings released late yesterday, Coeur d’Alene’s earnings announcement today, Placer Dome’s joint venture with Nevada Pacific and ocean survey with Williamson & Associates following a recent agreement with Nautilus Minerals Limited of Australia, and DRDGold’s earthquake in South Africa that injured 13 and trapped 42 were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

- Written by Chris Mullen

The Gold Seeker Closing 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 The Gold Forecaster.

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

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-- Posted Wednesday, 9 March 2005 | Digg This Article

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