-- Posted Thursday, 16 June 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

Building Permits for May fell more than expected and came in less then the expected 2,106,000 at 2,050,000.  Housing Starts came in less than the expected 2,050,000 at 2,009,000, but slightly higher than April’s downwardly revised mark of 2,005,000.

Initial Jobless Claims for 6/11 came in higher than the expected 330,000 at 333,000.

The Philadelphia Fed for June came in lower than the expected 10.0 at -2.2.  The first negative reading in 25 months points to contraction in the sector.  Although just an indicator of the Philadelphia region, the index is famous for predicting nation wide manufacturing growth.  With a negative number from the Philadelphia Fed today, don’t be surprised to see a reading under 50 for the next ISM Index reading due out July 1^st.  The last ISM Index showed a reading of 51.4 for May, which was the lowest reading since June 2003.  Readings above 50 indicate growth.

Tomorrow at 8:30AM EST brings the Current Account for the 1^st quarter expected at -$190 billion.  This will be the first indicator of what the Budget Deficit will be for this year.  2004’s deficit was an all-time high of $665.9 billion, 25.5% higher than the previous record of $530.7 billion in 2003.  In terms of percentage of GDP, the 2004 deficit was also a record at 5.6%, breaking the 2003 record of 4.8%.  At 9:45 is the preliminary estimate of Michigan Sentiment for June expected at 88.8.  May’s reading of 86.9 was the lowest in over 2 years.

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Oil jumped to a 2 month high as concerns that OPEC supply will not be able to keep up with demand continue to weigh on trader’s minds.  Oil gained $1.01 to $56.58, the highest close since April 4^th when the intraday record high of $58.28 was hit.  Oil traded as high as $56.75 intraday, the highest price hit since April 4^th as well.

The 10-Year Treasury note yield held up this morning, but fell off following the economically disappointing Philadelphia Fed Index.  The yield ended with a loss of 0.039 points to 4.076% as the June 2005 US Treasury bond gained 18/32 to 116 25/32.

The Dow, Nasdaq, and S&P traded mostly higher today, but found limited gains on low volume as investors contemplated mostly disappointing economic data.  The Dow gained 0.12% to 10578.65 and made new 2 and ½ month highs, the Nasdaq gained 0.69% to 2089.15 and sits just 8.65 points away from 5 month highs, and the S&P gained 0.36% to 1210.93 to make new 3 month highs.

Among the big names making news in the market today were Sirius and XM, Morgan Stanley, NYTimes, Airbus and Boeing, Waterford Wedgwood, Winnebago, KPMG, Goldman Sachs, Pfizer and Vicuron, and Integrated Device and Integrated Circuit.

The U.S. dollar index dipped this morning on disappointing economic data, but soon rebounded to find gains before the Philadelphia Fed Index brought it back down to near unchanged.  This index ended the day with a gain of 0.01 points to 88.71.  The euro index remains range bound “ahead of this weekend's EU summit where leaders will attempt to thrash out a deal on the EU budget... Although there is a question over how much further the euro can fall, there is a danger that the currency could slip sharply if no agreement is reached, as it did in the wake of the French and Dutch referenda, he said.”  The euro index lost 0.20 points to 120.98.  The yen gained 0.24 points to 91.78.

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

Gold and silver traded mixed and near unchanged on Asia before starting nice gains in London.  Silver remained higher, but traded mixed in New York to end with modest gains while gold gained throughout New York trade and ended at 7 week highs.  Gold gained $7.00 to $435.70 and silver gained $0.03 to $7.33.

Euro gold held above €350 for the 5^th straight session and hit an all-time high above €360 today.

Copper made a new 16 year high on fund buying driven by supply worries and traded as high as $1.585 per pound for July delivery.

Gold and silver equities started off over 2% higher and continued their gains from there, ending about 3.5% higher at over 2 month highs.

More Precious Metals Analysis:

“The gold market posted another impressive session even if prices really didn't make that much of mark on the charts. However, it was clear that the metals were seeing renewed fund interest and it was also clear that the Dollar had reached a significantly overdone status. We also think the metals markets showed some ongoing correlation with the energy complex and that in a sense gives gold and silver a fresh bullish theme. Traders must continue to watch exchange stocks of gold and silver as more tightening in that area might create yet another bull fundamental focus. While we are not sure that a big upward thrust is ahead in gold and silver it would seem that the negative bias of the last week is draining from the market.” - The Hightower Report, Futures Analysis and Forecasting

Gold & Silver Stock News Update from GoldReview.com:

Arizona Star’s technical report on Cerro Casale, Barrick Gold’s Lagunas Norte Mine, IMA Exploration’s silver resource increase to 300 million ounces at Navidad, and Silver Standard’s extended silver mineralization at the Berengeula project in Peru were among the big stories in the gold and silver mining industry making headlines today.

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- Written by Chris Mullen

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-- Posted Thursday, 16 June 2005 | Digg This Article

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