-- Posted Wednesday, 20 July 2005 | Digg This Article
Note: Chris Mullen will return to the Gold Seeker Closing Reports to its regular format, schedule upon his return next week and Peter Spina will be substituting.
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Closing Market Report:
DOW: 10,689.15 +42.59 3-month highs
S&P: 1,235.20 +5.85 4-year highs
NASDAQ: 2,188.57 +15.39 4-year highs
US markets rallied Wednesday after initially trading lower after Federal Reserve Chairman Alan Greenspan delivered an upbeat economic picture to Congress along with positive earnings. Trading higher into the close, the S&P 500 and NASDAQ hit fresh four-year records. In today’s closely followed testimony, Greenspan made some key comments including three threats to the economic outlook:
- Growing Wage Pressures
- Surging Energy Costs
- Housing market threat if rates were to quickly rise
"The significant rise in purchases of homes for investment since 2001 seems to have charged some regional markets with speculative fever," Greenspan said noting that increasing usage of interest-only loans and other exotic mortgages left homeowners "vulnerable to adverse events" if housing values fall. Bonds initially sold-off on Greenspan’s signal of more rate increases, but “contained inflation pressures” and the continuing yield curve “conundrum” sent rates falling from 4 ¼% back to 4.17%.
Aiding today’s rally in the equity markets were a 3-week low in oil prices with the futures contract sliding 74 cents to $56.72, rebounding from a low of $56.10. Today’s US Government issued report on stockpiles showed a fall of 900,000 barrels, far less than anticipated 3.7 million drawdown, as slower refinery demand along with higher imports offset effects of Hurricane Dennis.
Closing Gold & Silver Report:
Gold Warehouse Stocks: | 5,738,806 | +2,315 |
Silver Warehouse Stocks: | 106,054,981 | - |
In the metal markets, gold and silver showed good strength, continuing their rallies into ACCESS trading as the U.S. Dollar gave-up early gains to close lower by nearly ½ point on the index. Yet despite the stronger U.S. Dollar gold price, the Euro Gold price gave up early €350+ trading to close lower by nearly a €1 to just above €348 an ounce. The Rand gold price also suffered from a stronger currency giving the South African gold price a 20+ rand an ounce loss, taking the price to just under 2,800 rand an ounce. The Canadian Dollar gold price continued to mimic the U.S. Dollar gold trading taking it up nearly C$5/ounce to around C$517 at 6pm EST.
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August Gold closed up 1.9 at 422.1. This was $1.5 up from the low and $1.2 off the high. September Silver finished up $0.083 at 7.068, $0.042 off the high and $0.083 up from the low.
“Both gold and silver came alive and we suspect that part of the rally was short covering off the realization that Chinese economic growth remains strong and that physical demand for gold and silver could be stronger than expected. We also think that some gold players were speculating on a failure in the Dollar in the sessions ahead and that might set up a volatility event in gold over the coming two sessions. The gold market was also supported off the flight to quality element as Saudi Arabia warned some foreign government of an increased chance of terrorism in that country by militants. The bulls hope that gold will see flight to quality, physical buying interest and Dollar related buying all come together in the coming sessions.” - The Hightower Report, Futures Analysis and Forecasting
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- Written by Peter Spina
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-- Posted Wednesday, 20 July 2005 | Digg This Article
Gold Seeker Closing Report – S&P & NASDAQ at 4-Year Highs; Greenspan Optimistically Worries
