Gold traded mostly slightly lower in Asia and London before it fell off further in morning New York trade to as low as $595.70 at one point, but a rally into the close cut some of its losses and left it with a 1.06% loss on the day.Silver followed a similar pattern.It fell to as low as $11.27 before it rebounded and ended with a loss of 1.72%.
Euro gold fell near €470, platinum lost $10 to $1,134, palladium lost $9 to $310, and copper rose over 5 cents to get back near $3.45.
Gold and silver equities fell over 1.5% at the open and remained near their lows in morning trade, but they then rallied throughout most of afternoon trade and found small gains before they fell back off in the last hour of trade and ended about 1% lower.
The Economy:
Report
For
Reading
Expected
Previous
Personal Income
Aug
0.3%
0.3%
0.5%
Personal Spending
Aug
0.1%
0.2%
0.8%
Michigan Sentiment
Sep
85.4
85.0
84.4
Chicago PMI
Sep
62.1
56.0
57.1
Year over year Core PCE rose 2.5%.It was the biggest increase in more than 10 years.St. Louis fed president William Poole spoke and noted easing inflation pressures.
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Next week’s economic highlights include Construction Spending and the ISM Index on Monday, Factory Orders and ISM Services on Wednesday, Initial Jobless Claims on Thursday, and Consumer Credit and September’s jobs data on Friday.Bernanke and Kohn will also be speaking next week.
Oil fell in early trade as OPEC announced that there will be no emergency meeting to talk about a possible official OPEC production cut, but Nigeria and Venezuela said they will cut production and BP “said it had shut in 25,000 to 30,000 barrels per day of oil output in Alaska following a natural gas leak at its Lisburne oil field.”This announcement late in the day brought in some buying in the last minutes of trade and caused oil to end slightly higher.
The U.S. dollar index rose in anticipation of high Core PCE and remained higher after year over year Core PCE came in at the highest since January 1995.Core PCE is one of the fed’s most closely watched indicators and may influence them raise interest rates in the future as they like to see Core PCE below today’s reading of 2.5% and closer to the 1-2% range.
Treasuries came in higher before falling following strong economic data, but they then rebounded at the close to end unchanged on the day following some dovish comments from the fed’s Poole.
The Dow, Nasdaq, and S&P remained near unchanged for most of trade before they fell off in the last couple of hours and ended modestly lower on inflation worries.
Among the big names making news in the market Friday were Toshiba, Dell, J. Crew, RIM, and Timken.
The Commentary:
“December Gold finished down 6.7 at 604.2, 3.3 off the high and 4.7 up from the low.
December Silver closed down 0.195 at 11.54. This was 0.22 up from the low and 0.17 off the high.
The gold market again fluctuated moderately but it was clear that the bear camp held the most control over prices. With the Dollar finishing the week on an upbeat tilt and the oil sector periodically showing weakness again there were a number of outside market forces prompting profit taking by the longs. In fact, considering the non-descript Personal Income and Consumption readings and the level PCE Index, the market saw negative macro economic indications from the first set of numbers. However, later in the session the market should have seen some support from the Chicago Purchasing Managers and the New York Purchasing Managers data.
With the December silver contract forging a rather wide trading range on Friday and seemingly content to sit near the mid point between the 100 and 200 day moving average, it would seem like the market is attempting to make a trend decision. With the Press reporting fund selling interest throughout the session and the end of month psychologically already being played up by the trade it almost seemed like a self fulfilling prophecy for prices to weaken. Even the positively positioned copper market failed to benefit from the favorable Chinese growth news that was floated before the opening and therefore it wasn't surprising to see the silver market fail to benefit.”- The Hightower Report,Futures Analysis and Forecasting
On September 27, 2006 the iShares Silver Trust [AMEX: SLV] filed a S-1 to register 15,222,727 shares at a proposed maximum offering price of $110.00 per share for a maximum net offering proceeds of $1,674,449,970.
As of 09/28/2006, iShares Silver Trust showed 104,323,655 ounces of silver in the trust or 3,244.8 tonnes. This represented 10,450,000 shares. Thus the registration of the S-1 this week will effectively increase the amount of shares and silver by just under 150%.
The Stocks:
Ivanhoe’s (IVN) extended completion date of its acquisition agreement with Asia Gold and Coeur d’Alene’s (CDE) Rule 10b5-1 plan were among the big stories in the gold and silver mining industry making headlines Friday.
Gold Seeker Weekly Wrap-Up – Gold & Silver Fall Over 1% on Friday; Gain Over 1% and 2% on the Week
