-- Posted Tuesday, 16 August 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

CPI for July came in higher than the expected 0.4% at 0.5%.  This is the most in 3 months and stirred up inflation fears, but Core CPI came in lower than the expected 0.2% at 0.1%, making for a mixed report.

Housing Starts for July came in higher than the expected 2,025,000 at 2,042,000 and June’s number was revised up to 2,045,000 from 2,004,000.

Building Permits for July came in higher than the expected 2,104,000 at 2,167,000, a 32 year high.  June’s number was revised up to 2,132,000 from 2,111,000.

Industrial Production for July came in less than the expected 0.5% at 0.1% and Capacity Utilization came in less than the expected 80.3% at 79.7%.  June’s numbers were also revised slightly lower.

Overall, this morning’s data showed the economy is still growing, and inflation remains relatively well contained.  CPI was mixed and Housing Starts/Building Permits came in better than expected, while Industrial Production/Capacity Utilization came in lower than expected.

Tomorrow at 8:30AM EST brings PPI for July expected at 0.5% and Core PPI expected at 0.1%.

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Oil started off the day a bit lower, but soon found modest gains in mixed trade before ending lower by $0.19 to $66.08 ahead of tomorrow’s inventory report. 

Treasuries gained after relatively tame CPI and extended their gains after disappointing Industrial Production and Capacity Utilization readings, pushing the yield on the 10-year down to over 2 week lows.  The spread between the 10 and 2-year note yields fell under 20 basis points.

The Dow, Nasdaq, and S&P opened the day lower and continued to fall throughout trade on disappointing earnings and worries over inflation from recent high energy costs.  Tame oil and lower interest rates failed to motivate investors.  All 3 indices ended at new 1 month closing lows with over 1% losses.

Among the big names making news in the market today were Goodyear, Apple and Microsoft, Deere, Estee Lauder, Staples, Wal-Mart, Home Depot, and JPMorgan Chase and Enron.

The U.S. dollar index held onto to overnight gains throughout this morning’s economic data before dropping off a bit in later trade, but still holding onto minor gains.  The yen fell from 6 week highs.

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

Gold traded slightly lower in Asia and extended its losses in London, falling to as low as $440 before rallying throughout New York trade and ending near its highs.  Gold ended with a gain of $3.90 to $446.20, a new 8 month closing high.  Gold now sits just $9.50 from reaching what would be a new 17 year closing high at $455.70.  Euro gold again climbed back above €360.  Silver traded slightly higher in Asia and London and also ended near its highs in New York, gaining $0.06 to $6.99.

Copper set a new all-time record high, gaining $0.0085 to $1.7795 for August delivery.

Gold and silver equities rose about 1.5% in early trade before falling off to near unchanged by the afternoon and remaining mixed and near unchanged into the close, with all 3 indices ending near their lows of the session.

More Precious Metals Analysis:

“The gold market surprised the trade by exploding out of a liquidation posture after what many have described as quiet quasi holiday type trade on Monday. On the other hand, a sharp $6 rally off the Tuesday morning low is certainly not a quiet market and with the Dollar managing to stay mostly positive throughout the session it would seem like some other element was driving buyers into the fray. We suspect that significant tension in Gaza and concentrated fund buying on top of light trading conditions resulted in the sharp bounce in prices.” - The Hightower Report, Futures Analysis and Forecasting

Gold & Silver Stock News Update from GoldReview.com:

Goldcorp’s scouting for acquisitions, NovaGold’s confirmed high grade continuity at Donlin Creek, Newmont’s identification of 14 exploration targets at the La India gold project for Grayd Resources, Metallica’s update of exploration activities and results for its Rio Figueroa copper-gold project, Gammon Lake’s results from the latest 54 exploration drill holes drilled at the Company's 100%-owned Ocampo Gold- Silver Project, and Endeavor Silver’s acquisition of 4 more silver properties were among the big stories in the gold and silver mining industry making headlines today.

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- Written by Chris Mullen

The Gold Seeker Closing Report is a free edition providing a daily wrap-up of gold & gold-related news.  For more in-depth analysis of the gold markets, subscribe to The Gold Forecaster.

All sources are given within the report and most articles can be found as they are released at http://www.capitalupdates.com/, http://www.goldseek.com/, http://www.silverseek.com/, and http://www.goldreview.com/.

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-- Posted Tuesday, 16 August 2005 | Digg This Article

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