-- Posted Monday, 25 April 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

Existing Home Sales for March rose 1% and came in higher than the expected 6.8 million at 6.89 million with February’s mark being revised up from 6.79 million to 6.82 million.

Tomorrow at 10AM EST brings New Home Sales for March expected at 1,190,000 and Consumer Confidence for April expected at 98.0.

President Bush spoke with Crown Prince Abdullah of Saudi Arabia today to speak about energy and comments from the Saudi’s indicated spare production capacity could be quickly tapped if needed.  Oil traded slightly higher this morning ahead of the meeting, but turned lower in afternoon trade and ended near its lows of the day as it lost $0.82 $54.57.

The 10-Year Treasury note yield traded mixed in a pretty tight range and lost just 0.004 points to 4.251% as the June 2005 US Treasury bond gained 6/32 to 114 6/32.

The Dow, Nasdaq, and S&P opened higher and continued to move higher in early trade with all three indices remaining at those level for much of the day before a sell-off in the last hour of trade threatened to erase any of the days gains, but all three indices rebounded from the minor sell off to end with nice gains.  The Dow gained 0.83% to 10242.47, the Nasdaq gained 0.96% to 1950.78, and the S&P gained 0.87% to 1162.10.

Langone’s preparation to bid for the NYSE to foil Archipelago’s merger plan, Valero’s acquisition of Premcor to become the U.S.’s largest refiner, Boeing’s $6.1 billion order form Air Canada, GM’s recall of 2 million vehicles, Hellman & Friedman’s acquisition of DoubeClick, Adelphia’s settlement, and earning’s or other news from Qwest, Reebok, Nissan, Kimberly-Clark, and SBC were among the top names making news today.

The U.S. dollar index gained 0.29 points to 83.79.  The euro index lost 0.76 points to 129.77.  The yen gained 0.10 points to 94.58.

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

Gold traded a bit higher overnight before falling in London trade and remained lower for most of New York trade before rallying into the close to end with a small gain while silver traded mostly lower both in overnight and New York trade to end slightly lower.  Gold gained $0.30 to $434.00 and silver lost $0.02 to $7.24 as traders followed news surrounding China’s possible currency revaluation, dealt with more IMF gold sale rumors, and planned for a busy economic week ahead.

Gold and silver equities fell almost 1% in morning trade and then rebounded a bit, but remained slightly lower in afternoon before a late rally that brought the indices into positive territory by the close as the new gold ETF’s also traded lower this morning before rebounding to hover near unchanged and end mixed for the day.

“British finance minister Gordon Brown said on Monday his proposal to sell the International Monetary Fund's gold to finance debt relief for poor countries was still on the British agenda despite U.S. opposition.”  Mr. Brown must be about the only man left in the world that believes this plan still has a chance.  IMF gold sales require the backing of 85% of the IMF's board and the U.S., with over a 15% vote, has veto power.  Congressional (U.S.) approval is needed for any IMF gold transaction and the U.S. Congress does not support sales, so that is the end of story.

To read more analysis on why, please read the recent following commentary by:

• Charleston Voice: Death with Dishonor & Oxfam: US Says NO! to IMF Gold Sale
• Chris Powell, GATA: Is U.S. Really Opposed to Selling IMF Gold, and, if so, What's the Real Reason?

But it is not just the U.S. who opposes such a plan.  Worldwide, the plan has only a little over 50% support, far from the 85% required.  When looking at recent history though, it is of little surprise to see that Mr. Brown is still giving this lost cause press aimed at suppressing the gold price.  It was the Bank of England, after all, that sold over half its gold when it was trading under $300 an ounce in an effort to keep it below that level. 

From the March 2002 International Forecaster: “The Bank of England made its last 20 ton gold sale. The auction was over-subscribed by a healthy 3.7 times versus 1.4 times in the January auction. The sale price was $296.50, the highest of any of the banks 17 sales. We believe hedgers were the major bidders. Buying auctioned gold avoids buying back gold out of the market and perhaps pushing gold prices higher. The auctions have reduced the Bank of England holdings from 715 to 320 tons and they raised $3.3 billion and incurred major losses in the process, but who cares the gold belongs to British citizens, its government and Royal Family, all who could care less.”

More analysis from Peter Spina, contributing author to The Gold Forecaster, see subscription information below in order to receive much more in-depth analysis on the gold and silver markets:

Starting in 1999, British Chancellor Gordon Brown began his quest to dispose the IMF of their gold holdings via sales.  After his initial failure for such a program to “fund debt relief”, the UK came forward with news of their gold sales agenda, which led to the disposal of half of their gold reserves in which they received a sub-$300 an ounce for it.  Timing could not have been more shocking for the British people, which saw the theft of ½ their gold at almost the precise bottom of the gold market over nearly 3 decades! (It is still surprising that Mr. Brown is still given a public voice to any matter related to gold as his authority has led to only terrible results.)

It is therefore necessary to be, at minimum, suspicious of his ambitions (again) to dump IMF gold onto the market and for what reason?  The most obvious and reasonable answer is to help satisfy the dangerous gold short position and thus vulnerability of derivates in jeopardy by a rising gold price, with very little product able to satisfy a very immense shortfall.

Mr. Brown’s agenda appears rather clear by taking a deeper look into his history, only briefly looked into above.  His new rhetoric of gold sales appears to be a growing desperation to suppress the gold price by scaring of market participants.  Such a frantic act only mimics that of the former (German) Bundesbank president, Mr. Ernst Welteke, who too repeated his wish for German CB gold sales. Mr. Welteke never had the needed majority support from the Bundesbank’s board and the sales never materialized, he later left after a political scandal. 

It is therefore advisable to understand the intentions of these influential figureheads, but realize why their calls for such programs are nothing more than deceitful, desperate moves to intimidate gold investors.

Global Exchange Traded Gold Securities report the following holdings of gold in their custody:

iShares Comex (AMEX: IAU) reports a total of 400,618 ounces of gold in their possession.

Note:  Gold Seeker Report does not endorse investments into paper gold ETFs, but provides the data above for informational purposes only.

Gold & Silver Stock News Update from GoldReview.com:

Harmony’s third quarter loss due to a strong rand, strikes, and restructuring, Agnico Eagle’s possible settlement with the Ontario Securities Commission, Kinross’s results release Thursday and increased credit facility, Harmony’s strike warning from the National Union of Mineworkers, Australian/deep drilling mining by Newmont, Placer Dome, and Gold Fields, and First Majestic’s third ore shoot discovery 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/.

© Gold Seeker 2005

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-- Posted Monday, 25 April 2005 | Digg This Article

Previous Articles by Chris Mullen and Peter Spina, Gold Seeker

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