-- Posted Wednesday, 29 June 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

1^st quarter GDP was revised up from 3.5% to 3.8%, higher than the expected 3.7%.  The Chain Deflator came in below the expected and prior mark of 3.2% at 2.9%.  Increased home construction and a slightly lower trade deficit were cited as reasons for the increase in GDP.

Another ¼ point rate hike is expected by the fed tomorrow, bringing rates to 3.25%.  As always, the emphasis will be on the fed’s language.  Will they remain at a measured pace?  Will they change any other language in their statement?  Any changes could have a significant impact on the markets tomorrow as investors look for signs towards a pause or stop in the rise of interest rates.  With the 2^nd quarter also ending tomorrow, the last hour and 45 minutes of trade could be pretty volatile.

Also tomorrow at 8:30AM are Initial Jobless Claims for 6/25 expected at 325,000, Personal Income for May expected at 0.3%, and Personal Spending for May expected at 0.1%.  At 10AM are Chicago PMI for June expected at 54.0 and the Help-Wanted Index for May expected at 40.

Oil traded about $0.50 lower ahead of this morning’s EIA inventory report that saw crude inventories build 1.1 million barrels, gasoline inventories build 300,000 barrels, and distillates build 1.7 million barrels.  Some had expected a draw down in crude inventories and only a slight build in distillates, so the nice build in both crude and distillates caused the price of oil to fall further.  Oil fell to as low as $56.90 at one point before rebounding a bit to end with a loss of $0.94 to $57.26.

The 10-Year Treasury note yield fell this morning as inflation worries eased following a lower than expected Chain Deflator, but the yield then increased ahead of the fed’s decision tomorrow as a treasury auction drew only modest demand.  The yield ended higher by 0.014 points to 3.99% as the September 2005 US Treasury bond lost 11/32 to 118 5/32.

The Dow, Nasdaq, and S&P traded mostly modestly higher in morning trade before turning mostly modestly lower in the last few hours of trade as uneasiness over the fed’s announcement tomorrow erased any positive effects from lower oil and higher GDP.

Among the big names making news in the market today were the SEC, CME and CBOT, Unocal, General Mills, Oracle, Morgan Stanley, Monsanto, and Wrigley.

The U.S. dollar index saw continued strength ahead of tomorrow’s fed announcement this morning and traded at 10 month highs before falling off in afternoon trade as rumors surrounding a possible leak in German unemployment data caused traders to sell the dollar.  The euro index traded at new intraday 10 month lows before rebounding.  The yen furthered its 8 and ½ month lows.  The dollar also hit 10 month highs versus the Swiss franc in trade today.

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

Gold traded mostly lower overnight before rallying throughout morning New York trade and holding most of its gains into the close to end higher by $0.80 to $436.70.  Silver remained mixed and near unchanged overnight before dropping in late London and early New York trade.  Silver remained slightly lower for the rest of trade to end with a loss of $0.04 to $7.03.

Gold and silver equities gained throughout the morning and held their gains in afternoon trade despite the unimpressive performance in the metals.  All three indices ended at their highs of the day and closed at their highest levels in nearly 3 months.

Gold & Silver Stock News Update from GoldReview.com:

Glencairn’s first gold pour at Bellavista, Barrick Gold’s start on exploration field work on the Horse Mountain Joint Venture for Miranda Gold, Orezone’s $100,000 program to drill wells that will provide a source of clean, safe drinking water for five villages in Burkina Faso, West Africa, Placer Dome’s purchase of X-Cal's Mill Creek Gold property and possible copper mine strike in Chile, Eldorado’s appointments, Cambior’s second quarter results conference call announcement, Agnico-Eagle’s second quarter results conference call announcement, Endeavour’s acquisition of nine silver mining properties in the Guanacevi district, Durango, Mexico from Industrias Penoles SA de CV, and Coeur d’Alene’s designated president for the San Bartolome project 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 Wednesday, 29 June 2005 | Digg This Article

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