-- Posted Wednesday, 24 August 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

Durable Goods Orders for July came in much lower than the expected -1.5% at -4.9%, the largest drop in 18 months.  The economic disappointment was somewhat written off as the volatile report follows June’s unexpected jump in orders, though that “jump” was revised down from 2.0% to 1.9%.  “Excluding transportation, which is volatile month to month, orders fell 3.2 percent, the biggest drop since April 2004, after a 3.6 percent rise in June.”

New Home Sales came in more than the expected 1,328,000 and rose 6.5% to 1,410,000, a new record high.  “Mortgage rates within half a percentage point of a 40-year low and 26 straight months of job growth spurred home sales in July.”

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 8/20 expected at 315,000.  At 10AM is the Help-Wanted Index for July expected at 38.

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Oil gained overnight and early this morning ahead of the EIA inventory report saw crude inventories build 1.8 million barrels, gasoline inventories fall 3.2 million barrels, and distillate inventories build 1.4 million barrels.  Oil fell off markedly following the report despite the larger than expected drop in gasoline inventories as crude and distillate inventories pleased, but it soon rebounded to find gains again as investor worries turned to tropical storm Katrina in the Gulf of Mexico.  Oil made a new all-time high of $67.40 before falling off just slightly and closing higher by $1.61 or 2.45% to $67.32.

Treasuries jumped on the weaker than expected Durable Goods Orders report, though gains were soon pared on higher than expected New Home Sales.  Treasuries did end with modest gains though, with the yield on the 10-year falling to a new 1 month low.

The Dow, Nasdaq, and S&P started off lower on the weaker than expected Durable Goods Orders report, but all three indices soon rallied to near unchanged and found gains midday before falling off sharply in the last hour or 2 of trade to end near their lows, with all three indices falling to new 6 week lows.

Among the big names making news in the market today were Wal-Mart, Fidelity Investments, BHP Billiton, Brown-Forman, Beverly Enterprises, Google, GM, Bombardier, Kmart, Baidu, and Boston Scientific.

The U.S. dollar index traded higher overnight, but then fell off on the weaker than expected Durable Goods Orders report before rebounding a bit on encouraging New Home Sales, but then falling back off to close near its lows.

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

Gold traded mostly slightly higher in Asia and London before some erratic trade in New York.  After an initial muted reaction following the Durable Goods Orders report, gold eventually jumped up above $440 as the dollar fell off, but it then dropped to as low as $435.20 before a small rebound into the close to end with a loss of $2.10 to $436.90.  Silver also traded mostly slightly higher in Asia and London before dropping off in New York, losing $0.05 to $6.88 on the day to make a new 7 week closing low.  Should silver find further losses, it needs only to fall under 6.82 to make a new 3 and ½ month low and under $6.81 to make a new 6 month low, based on a closing basis.

For the third day in a row, gold and silver equities started off modestly higher before falling off for the rest of the day and ending near their lows.

More Precious Metals Analysis:

“The metals market came under additional liquidation Wednesday after the US durable goods report showed a significant decline. However, with both gold and silver under pressure and the Dollar virtually unchanged for most of the session, a number of bulls had to be very disappointed. Surprisingly the gold remains weak even though the Press carried stories that suggested strong Asian physical off take was being seen at the lower price levels. All in all, it certainly felt like the metals markets were seeing deflationary fears.” - The Hightower Report, Futures Analysis and Forecasting

Gold & Silver Stock News Update from GoldReview.com:

South Africa’s slumping gold production, Randgold’s joint venture with the Tanzanian government, IMA’s board of directors appointment, and MAG Silver’s diamond drill program started on the Juanicipio Joint Venture 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, 24 August 2005 | Digg This Article

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