-- Posted Wednesday, 16 November 2005 | Digg This Article

Market Analysis from GoldSeek.com, SilverSeek.com & CapitalUpdates.com:

CPI rose more than expected but remained relatively tame when compared to last month’s jump that was the largest in 25 years.  Foreign Capital Inflows ((also known as Net Foreign Purchases or Treasury International Capital (TIC data)) easily covered September’s record high Trade Deficit of $66.1 billion by setting a record high of its own.

Tomorrow at 8:30AM EST brings Building Permits for October expected at 2,170,000, Housing Starts for October expected at 2,060,000, and Initial Jobless Claims for 11/12 expected at 322,000.  At 9:15AM are Capacity Utilization for October expected at 79.6% and Industrial Production expected at 1.0%.  At noon is the Philadelphia Fed manufacturing index for November expected at 15.0.

Gold and silver traded nicely higher in Asia and remained higher in London before exploding even higher in New York and ending near their highs of the session with 2.12% and 2.97% gains, respectively.  Gold closed at a new 17 and ¾ year high and silver closed at a new 11 month high.  Euro gold closed over €400 and at a new record high for the 3^rd time in the past 4 days.  Silver needs only to break past the NY close of $8.01 on December 1, 2004 and $8.20 on April 6, 2004 to join gold at near 18 year closing highs.  Platinum made 26 year highs as it gained $18 to $980, palladium made new 18 month highs as it gained $11 to $254, and copper made new all-time highs above $1.90 per pound.

Gold and silver equities rocketed higher at the open and continued to gain throughout the rest of trade to close around 6% higher.

More Precious Metals Analysis:

“The gold market seemed to be initially inspired by the platinum market which was soaring early in the session. We also think that gold was lifted by aggressive fund buying that seemed to be spread out in all the metals markets. Some traders suggested that strong oil prices prompted the rally in gold and silver, while others suggested that concerns for a GM failure were behind the flight to quality bounce. Talk of failure at GM is largely thought to imperil the US pension guarantee fund and that is certainly a flight to quality potential.” - The Hightower Report, Futures Analysis and Forecasting

The U.S. dollar index made new 2 year highs in overnight trade before falling a bit following CPI data, but record high Net Foreign Purchases helped the index resume its rally and close at new 2 year highs by the close.  The euro fell to new 2 year lows as the yen made new 27 month lows.

Oil traded slightly lower this morning ahead of inventory reports that showed crude inventories fell 2.2 million barrels, gasoline inventories fell 900,000 barrels, and distillates built 2.6 million barrels.  Traders were expecting builds in oil and gas and a fall in distillates so the report was somewhat bullish for the price of oil, but the build in distillates was encouraging and made for a somewhat mixed report.  Cold weather concerns also contributed to oil’s rally today.

Treasuries rose on relatively tame inflation reported by CPI.  The spread between the yields on the 10 and 2-year notes fell under 10 basis points today and came very close to inverting.  An inverted yield curve has in the past been an indicator of an upcoming recession.

The Dow, Nasdaq, and S&P started off slightly higher on easing inflation worries, but all three indices remained mixed and near unchanged as traders watched oil climb.

Among the big names making news in the market today were American Express, Ford, Intercontinental Exchange, Inamed and Allergan, Morgan Stanley, Tyco, D.R. Horton, Roche and Gilead, Brink’s and BAX Global, Disney, Zale, Oracle, and DaimlerChrysler.

Gold & Silver Stock News Update from GoldReview.com:

Miramar’s NIRB hearings about the Doris North project, Seabridge Gold’s drill program at Courageous Lake, Golden Star’s restarted mine in Ghana, Placer Dome’s Option Agreement with Stealth Minerals, Harmony’s reported sale of its Gold fields shares and their denial of the report, Miramar’s $43.5 million private placement with Newmont, and Minefinders’ 3^rd quarter results were among the big stories in the gold and silver mining industry making headlines today.

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- Written by Chris Mullen

Winners & Losers tracks NYSE and AMEX listed stocks that trade over $1.

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-- Posted Wednesday, 16 November 2005 | Digg This Article

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