Market Analysis from CapitalUpdates.com:

Durable Goods Orders for May rose 5.5%, which was much higher than the expected 1.5%, but when excluding transportation, orders actually fell 0.2%, the 3^rd fall in 4 months.  The remarkable difference was due to a surge in aircraft bookings, giving orders their highest rise since March 2004.

New Home Sales for May rose 2.1% to 1.298 million, though the rise was only due to April’s downward revision from 1.316 million to 1.271 million, and sales came in below the expected rate of 1.32 million.  Still, sales did rise to the highest level since October and are at the second highest ever.  The median price of new homes fell to $217,000 from $232,200.

Oil made new intraday record highs above $60 before falling off a bit and ending Friday with a gain of $0.42 to $59.84, a new record closing high.  Rising global demand coupled with worries over supplies continue to be the prevailing themes in the market.  For the week, oil is higher by $4.97 or 9.06%, though there was a change in the most forward contract from June to August.

The 10-Year Treasury note yield traded lower the entire session Friday and ended with a loss of 0.045 points to 3.914% as the September 2005 US Treasury bond gained 19/32 to 118 30/32, a three week high.  Disappointing economic data and next week’s fed meeting dominated trade today.  For the week, the yield is lower by 4.02% and the bond is higher by 1.85%, though there was a change in the most forward contract from June to September.

The Dow, Nasdaq, and S&P fell off markedly for a second straight day.  Fears over protectionism, record high oil prices, and their impact on company earnings were once again stated as reasons for the decline.

For the week, the Dow is lower by 3.23%, its worst week since mid April, the Nasdaq is lower by 1.76%, and the S&P is lower by 2.09%.

Among the big names making news in the market today were Unocal, Carl Icahn and WestPoint Stevens, Oracle, John Deere, Postbank, Cerberus and BHW, Honda, Guidant, and CNOOC.

The euro index briefly fell under 120 to hit a new 10 and ½ month low before rebounding during US trade.  A possible rate cut by the ECB in early July coupled with US interest rate rises continue to weigh on the minds of traders.  Increased pressure on China to revalue their currency continues to weigh on the minds of traders for the yen.

For the week, the dollar index is higher by 1.13%, the euro index is lower by 1.5%, and the yen is lower by 0.4%.

This week’s economic reports:

Next week’s highlights include Consumer Confidence on Tuesday, GDP on Wednesday, the FOMC policy announcement on Thursday, and the ISM Index on Friday.

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

COT Gold Report - June 24, 2005

COT Silver Report - June 24, 2005

Gold traded mostly slightly lower in Asia before moving nicely higher in London trade and making new 3 month highs, trading over $443 at one point, but the yellow metal dropped once at the New York open and then again at about 11 AM EST before a rebound into the close that brought it back up to $440.00 for a small loss on the day of $0.80.  Silver followed a similar pattern and traded as high as $7.31 in late Asian/early London trade before falling off for the rest of trade, but still ending the session with a gain of $0.01 to $7.25.  For the week, Gold is higher by $2.30 for its 5^th straight week of gains and silver is lower by $0.06.

Gold and silver equities moved up about 1.5% in early trade before dropping to near unchanged by noon EST, but then rebounding slightly throughout the afternoon to end with small gains.

For the week, the XAU is lower by 0.33%, the HUI is lower by 1.46%, and the GDM is lower by 0.83% to break their 5 week winning streaks.

More Precious Metals Analysis:

“What is of critical importance is that the gold price has risen in €uros, something it has not done significantly for years.   Why, because confidence in the €uro has stumbled.   The way forward for the €uro does not look good, so gold to Europeans is suddenly attractive.   They are not particularly concerned with Gold’s performance on the U.S. $.  

The structural change is that in each currency, gold will be assessed and not with reference to the $!   This is why the global approach to the gold market is the one that will understand the future of gold, not a parochial one.” - Julian Phillips, Global Watch - The Gold Forecaster

“The gold market ran into some profit taking and with the Dollar showing early strength we can understand some players banking profits ahead of the weekend. We suspect that the COT report will show a moderate rise in the small spec and fund long and that figure will certainly be understated. Seeing the Dollar and Euro fall further out of favor next week should increase the attractiveness of gold but it would also seem like perpetually higher oil prices are needed to provide the gold market were ongoing fund buying interest. It is also clear from the action this week that silver is a lagging market that it is almost totally dependant on gold for future strength.” - The Hightower Report, Futures Analysis and Forecasting

Gold & Silver Stock News Update from GoldReview.com:

Crystallex’s “imminent” Venezuela mine permit, Yamana Gold’s third gold mine start up in Brazil, Newmont’s sale of its Golden Grove zinc-copper operation in Western Australia to Oxiana Ltd., Golden Star’s company profile, Bema Gold’s increase of the previously announced US$100 million bridge loan facility for the development of the Kupol project to US$150 million, DRDGold’s class action lawsuit against the company, a possible strike at Placer Dome’s Chile mine announced last night, and Sterling Mining’s company appointment of Michael Mooney as corporate secretary were among the big stories in the gold and silver mining industry making headlines Friday.

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- Written by Chris Mullen

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