-- Posted Monday, 1 August 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

A big week economically speaking started off this morning with Construction Spending for June coming in lower than the expected 0.7% at -0.3%.  This is the fourth straight monthly drop, with spending having now fallen 3.1% from the record high registered in February.

The ISM Index for July came in higher than the expected 54.1 at 56.6, confirming the rebound in June and showing expansion in the manufacturing sector.

Tomorrow at 8:30AM EST brings Personal Income for June expected at 0.4% and Personal Spending expected at 0.8%.  Also included in this report is the PCE deflator, one of Greenspan’s favorite inflation indicators.  At 10AM are Factory Orders for June expected at 1.0%.

The staff at GoldSeek.com wants to thank all of our readers for your support!  We look forward to at least another 10 years of service to the precious metals investment community, and are excited about growing further to provide the reader with further excellent service. We would like to celebrate this historic occasion by holding an online commemoration with the giveaway of gold, silver, complimentary subscriptions to Global Watch - The Gold Forecaster newsletter, and other gifts.  Please visit www.goldseek.com/10  for more details.

Oil started off today over $61 as Saudi King Fahd died, creating uncertainty in the market over the world’s largest oil exporter.  Crown prince Abdullah has ruled over the kingdom as de facto ruler for over 10 years and has assured the world that oil policy will not change, but there still was some nervousness in the market.  Worries over refinery shut downs in the US due to fires and other problems in the past few days as well as an oil field shut down in the North Sea last week also kept traders on edge.  Oil reached as high as $62.30, a new record high, before falling off a bit, but still ending with a gain of $1.00 to $61.57.

Treasuries fell after strong ISM data indicated good economic growth and pointed to further fed interest rate raises, sending longer term yields higher.  The 10-year note yield made a new 3 and ½ month high.

The Dow, Nasdaq, and S&P were held back today by record high oil prices and higher interest rates, but the Nasdaq and S&P still managed marginal gains, with only the Dow being held down for a small loss.  The Russell 2000 hit a new all-time high.

Among the big names making news in the market today were Ford, Chevron and Unocal, Tyson Foods, Teva Pharmaceutical, Humana, Nokia, HSBC, ABN AMRO, Procter & Gamble, General Motors, Atkins, and DaimlerChrysler.

The U.S. dollar index started off markedly lower this morning, partly due to a report from the IMF that says the currency is overvalued.  The euro index climbed as data showed growing manufacturing activity in Europe. 

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

Gold started off briefly lower in Asia before rebounding to above $430 by the start of trade in London where it added to its gains.  Gold then remained range bound in New York and ended higher by $1.90 to $431.40, a new 1 month high.  Silver traded mixed and near unchanged in Asia before moving slightly higher in London, and then added to its gains in New York trade, ending higher by $0.04 to $7.26, a new 5 week high.

Both metals found strength as oil rose, the dollar fell, and the threat of a country-wide strike in South Africa, the world’s biggest gold producer, threatened to hurt supplies.

The CRB gained 2.72 points to 314.72, closing at its highest since the 24 year high close of 322.42 made last March 16^th.  Copper for August delivery traded as high as $1.705 per pound, setting yet another record high as strikes have hurt supplies.  Platinum reached the highest since April 2004, gaining $12 to $908.00 and reaching as high as $919.00 as problems with mining unions also have traders worried about future supplies.  “Platinum futures traded on the Tokyo Commodity Exchange may soon be challenging an all-time record high, having scored a fresh 18-year high Monday, traders say.”

Gold and silver equities started off abut 1% higher, but soon fell off to near unchanged and remained just slightly higher for the rest of trade, ending the session with minor gains.

More Precious Metals Analysis:

“With the Dollar sliding in the face of weakness in the US Dollar and flight to quality interest also rising on a number of fronts, we can understand the upward tilt in gold and silver prices. We also think that ongoing strength in copper and platinum are lending direct speculative support to gold and silver. However, it is also likely that longer term technical developments are fueling fresh buying interest in gold and silver as a number of downtrend patterns have been reversed on the charts. In addition to flight to quality off the Saudi Arabia power shift, the gold and silver are also seeing a bit of flight to quality buying off the continued hard line stance by Iran.” - The Hightower Report, Futures Analysis and Forecasting

Gold & Silver Stock News Update from GoldReview.com:

News came out soon after market close last Friday that Rob McEwen, the former CEO of Goldcorp, bought 11.1 million shares of U.S. Gold Corporation for $4,000,000.  Soon after, it was announced that NovaGold had purchased 5,374,544 common shares of U.S. Gold Corporation for US$2,687,272.  Those stories raised quite a few eyebrows over the weekend and had a significant impact on USGL’s stock price today.  After closing at $0.39 Friday, USGL opened at $0.54 and steadily rose to $0.89 early today before falling off a bit from there, but then rebounding and hitting new highs at $0.92 in the last hour of trade, ending with a gain of $0.42 or 107.69% to $0.81.  Their recent average volume of about 16,000 rose to over 2,000,000 today.

With Canadian markets closed today for the country's annual Civic Holiday, other news among the miners was pretty limited, but the possible nation-wide strike in South Africa had many talking.

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- Written by Chris Mullen

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-- Posted Monday, 1 August 2005 | Digg This Article

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