Gold rose a few dollars in Asia, fell back near unchanged on London, and then plummeted in midmorning New York trade to as low as $585.00 before it rebounded nearly $5 into the close and ended with a loss of 0.87%.Silver remained near unchanged in Asia and London and traded nearly 10 cents higher in early New York trade, but it also dropped severely in midmorning New York trade to as low as $11.54 before it rebounded into the close and ended with a loss of 1.19%.
Euro gold fell to about €470, platinum lost $3 to $1,079, palladium lost $5 to $315, and copper dropped nearly 7 cents to about $3.46.
Gold and silver equities fell over 2.5% in morning trade, but they slowly crept higher in afternoon trade and ended with less than 1% losses.
The Economy:
Report
For
Reading
Expected
Previous
PPI
Sep
-1.3%
-0.7%
0.1%
Core PPI
Sep
0.6%
0.2%
-0.4%
Net Foreign Purchases
Aug
$116.8B
$53.0B
$32.9B
Industrial Production
Sep
-0.6%
-0.1%
0.0%
Capacity Utilization
Sep
81.9%
82.2%
82.5%
While headline PPI was tame due to falling gas prices, Core PPI came in much higher than expected due to a recovery in auto sales. Inflation fears rose due to the Core PPI reading, but falling wholesale PPI and falling industrial output point to an economic slowdown and ease any fears raised about a possible interest rate hike to combat inflation as a hike would further hurt economic growth.Net Foreign Purchases came in at a record high and easily covered August’s record high trade deficit of $69.9 billion announced last week.Also making economic news today was a NAHB report which showed homebuilder sentiment climbed in October after it had fallen for 8 straight months to a 15 year low.
Tomorrow at 8:30AM EST brings CPI for September expected at -0.3%, Core CPI expected at 0.2%, Building Permits for September expected at 1,715,000, and Housing Starts expected at 1,650,000.
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Oil started off the day higher on a likely OPEC cut, but it then fell for the rest of trade on speculation over ample supplies in tomorrow’s inventory report.
The U.S. dollar index fell and treasuries rose despite increased inflation fears as poor economic data may have a greater influence on the fed in terms of keeping interest rates unchanged at their meeting next week, but any gains or losses were pared to minimal by the end of trade as most looked ahead to tomorrow’s CPI report.
The Dow, Nasdaq, and S&P fell on inflation worries and on worries over an economy which may be slowing faster than anticipated.
Among the big names making news in the market today were Yahoo, IBM, Intel, Motorola, Office Depot, Wal-Mart, EMC, Wells Fargo, CME and CBOT, Merrill Lynch, Lilly and ICOS, and Johnson & Johnson.
The Commentary:
“Over the past weeks and even months there has been a good deal of financial market commentary about the commodity price bubble bursting. Not so in this column. It has been my thinking for a long time that those who believed the price run-up was solely due to excessive hedge fund speculation were badly mistaken. Due to Café sleuthing and input coming my way, it appeared a fair amount of this buying was quietly going into Chinese hands (among others) behind the scenes … and that supply would not be coming back on the market.
What else might the Chinese be doing with their TRILLION dollars in US dollar reserves?
It now appears the base metals have finished their consolidation and, one by one, are breaking into new high ground. Gold and silver were FORCED (manipulated) down ahead of the coming US elections, and my GUESS is that oil has been too. Both gold, silver and oil should be MUCH higher by year end.” - From yesterday’s Midas report byBill Murphy of LemetropoleCafe.com
“December Gold finished down 5 at 593.5, 6.3 off the high and 4.5 up from the low.
December Silver closed down 0.13 at 11.78. This was 0.15 up from the low and 0.2 off the high.
From the early mix of fundamental and technical conditions in gold to the late afternoon time frame a number of very disappointing developments were seen. In addition to a solid reversal in the energy complex, the market was also disappointed by the sharp slide in equity prices and the conflicting news from the inflation front. One can hardly discount the slack industrial production readings, especially with the sharp slide in the equity market adding to the macro economic concern. It also seemed like the gold market was disappointed in the lack of progression in geopolitical developments. However, there was more saber rattling from North Korea with the country saying imposing UN sanctions would be an act of war and there is widespread speculation that North Korea will conduct a second weapons test despite international pressure against it. While traders did report physical demand for gold helped to limit losses on Tuesday, news of a 30 decline in jewelry exports from Turkey in September from year ago also weakens sentiment. Another trigger factor pressuring gold prices was the market's inability to hold above a key psychological price level as the trade citing producer selling from Australia and South America around the highs of the day.
Although silver traded lower on Tuesday, the market seemed to hold up better than gold or copper, but sharp declines in these two metals was certainly a negative for the silver market. Weak readings on the economy and a slump in stock prices prevented silver from making a push through key levels which likely encouraged profit taking in the metal. September industrial production fell .6% with the durable goods sector down 1.8% which shifts concerns back toward a soft economy. Producer prices were also soft at down 1.3% on the month so inflation concerns were also put at bay, especially since energy prices fell back on Tuesday.” - The Hightower Report,Futures Analysis and Forecasting
The Statistics:
As of close of business: 10/16/2006
Gold Warehouse Stocks:
7,759,325
-
Silver Warehouse Stocks:
105,187,949
-597,124
Global Gold ETF Holdings
[WGC Sponsored ETF’s]
Product name
Total Tonnes
Total Ounces
Total Value
New York Stock Exchange (NYSE) AND Singapore Exchange (SGX)
Streettracks Gold Shares
390.26
12,547,364
US$ 7,465m
LSE (London Stock Exchange) AND Euronext Paris
Gold Bullion Securities
80.79
2,597,339
US$ 1,535m
Australian Stock Exchange (ASX)
Gold Bullion Securities
9.98
320,740
US$ 190m
Johannesburg Securities Exchange (JSE)
New Gold Debentures
9.89
317,861
US$ 189m
Note: Ghange in Total Tonnes from yesterday’s data: The ASX added 0.04 tonnes.
COMEX Gold Trust (IAU)
Profile as of 10/16/2006
Total Net Assets
$823,905,027
Ounces of Gold in Trust
1,385,649.968
Shares Outstanding
13,950,000
Tonnes of Gold in Trust
43.10
Note: No change in Total Tonnes from yesterday’s data.
Silver Trust (SLV)
Profile as of 10/16/2006
Total Net Assets
$1,221,880,267
Ounces of Silver in Trust
104,277,935
Shares Outstanding
10,450,000
Tonnes of Silver in Trust
3,243.4
Note: No change in Total Tonnes from yesterday’s data.
The Stocks:
Freeport-McMoRan’s (FCX) earnings, Fronteer’s (FRG) drill results, Randgold’s (GOLD) new mine development, Canyon Resources’ (CAU) new VP of Operations, Gold Fields’ (GFI) okayed offer for Western Areas, Glamis Gold’s (GLG) intervenor status, First Quantum’s (FM.TO) mine in commercial production, Silver Eagle’s (SEG.TO) drill results, Scorpio Mining’s (SPM.V) listing on the TSX, First Majestic’s (FR.V) corporate update, and Yale’s (YLL.V) Letter Agreement with IMPACT (IPT.V) to purchase up to an 80% interest in three properties were among the big stories in the gold and silver mining industry making headlines today.
WINNERS
1.Apex Silver
SIL +2.91% $14.51
2.Great Basin
GBN +1.96% $1.56
3.Gold Reserve
GRZ +1.75% $4.07
LOSERS
1.Nevsun
NSU -7.51% $2.71
2.Lihir
LIHR-5.70% $22.35
3.Banro
BAA -5.58% $11.00
Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.
All of today's gold and silver stock news:
Fortune Minerals Completes NICO Underground Bulk Sample - More - October 17, 2006 | Item | E-mail
Amera Intersects 30.23 Metres of 2.67% Copper and 24.1 g/t Silver on 100% Owned Cocha Project - More - October 17, 2006 | Item | E-mail
Jasper Mining Corporation continues diamond drilling on Isintok property - More - October 17, 2006 | Item | E-mail
Forsys Metals Commences Trading on the Toronto Stock Exchange - More - October 17, 2006 | Item | E-mail
Phase 1 Drilling Program Commences on U6 Savant Gold Project - More - October 17, 2006 | Item | E-mail
NGG: Investor Conference call Thursday Oct 19, 11:00 am PT/2:00 pm ET - More - October 17, 2006 | Item | E-mail
Silver Eagle Reports Continuing High Grade Assays from Underground Channel Samples - "Silver Eagle Mines Inc. is pleased to announce further assay results from silver bearing veins accessed by the King Ramp on the Miguel Auza property, Zacatecas State, Mexico. Drifting on the Ramal II, Ramal I and Calvario Veins is ongoing and mineralized vein material is being stockpiled on surface, pending start-up of the mill test plant. A combined mining advance on the veins of 63 metres has been completed since previous channel sampling was reported on August 29, 2006." More - October 17, 2006 | Item | E-mail
IRC receives listing on American Stock Exchange - More - October 17, 2006 | Item | E-mail
Freeport Q4 copper sales to increase, gold strong - "Freeport-McMoRan Copper & Gold Inc. said on Tuesday it expects fourth quarter copper sales to rise and gold sales to remain robust as demand for both metals remains strong. Speaking to analysts after release of its third quarter earnings results, chief executive Richard Adkerson said demand for copper concentrates and physical gold remains strong despite daily fluctuations in the exchange traded price." More - October 17, 2006 | Item | E-mail
GoldQuest Update on Exploration Activities-Drilling to Commence on Las Animas and Las Tres Palmas Projects - More - October 17, 2006 | Item | E-mail
Royal Gold Announces Fiscal 2007 First Quarter Conference Call - "ROYAL GOLD, INC., the leading precious metals royalty company, will report its first quarter fiscal 2007 results before the market opens for trading on Thursday, November 2, 2006. There will be a conference call that day at Noon Eastern Time (10:00 a.m. Mountain Time) which will be accessible via live internet broadcast and dial-in conference capabilities." More - October 17, 2006 | Item | E-mail
Klondike Star Releases Official 2006 Annual Report - More - October 17, 2006 | Item | E-mail
Scorpio Mining Corporation Listing on Toronto Stock Exchange - "Scorpio Mining Corporation (TSXV:SPM) announces that its common shares have been approved for listing by the Toronto Stock Exchange ("TSX"). The stock symbol "SPM" has been reserved for use for Scorpio Mining Corporation upon listing on the TSX." More - October 17, 2006 | Item | E-mail
First Majestic Resource Corp.: Corporate Update - "As previously reported on September 15, 2006, construction of the new 800 tpd mill at the La Parrilla Silver Mine is nearing completion. Construction of this much larger mill facility began earlier this year and was scheduled to be brought on line in September and October. The Company is pleased to announce that the first of two 400 tpd lines has been brought online successfully. All testing procedures went well and production through this new mill has commenced. The second 400 tpd line is anticipated to be brought online towards the end of October bringing total mine and mill production up to 800 tpd." More - October 17, 2006 | Item | E-mail
MDN Northern Mining: Gold Intersections at Isambara-Tanzania - More - October 17, 2006 | Item | E-mail
Affinor Acquires a Property in the MontbrayTownship - More - October 17, 2006 | Item | E-mail
Sparton Closes Private Placement Financing - More - October 17, 2006 | Item | E-mail
Oromonte Drills 133.7 gr/t Au Over 2 Meters at Gold Star Mine - More - October 17, 2006 | Item | E-mail
Aranka Gold Announces Increased Cash Position of $4,800,000 CDN Due to Warrant Exercises - More - October 17, 2006 | Item | E-mail
Romarco Completes Drilling at Its Buckskin-National and RobertsMountains Gold Projects - More - October 17, 2006 | Item | E-mail
Hinterland Metals Inc. - Ebay Trenching Returns 2.46g/t PGE, Drilling Commences - More - October 17, 2006 | Item | E-mail
Landore Resources Limited - Lessard, copper-Zinc-Silver Project Drilling Report - More - October 17, 2006 | Item | E-mail
Exploration resumes on El Pulpo - More - October 17, 2006 | Item | E-mail
Konigsberg Oversubscribes $600,000 Financing at $0.60 per Share - More - October 17, 2006 | Item | E-mail
Permitting Advances on Perama Hill Gold Project in Greece - More - October 17, 2006 | Item | E-mail
Unico, Inc. Updates Reconstruction of the Mill and Processing Facility at the Deer Trail Mine - More - October 17, 2006 | Item | E-mail
Brownsville Company Enters Into Definitive Agreement With Trimark Explorations Ltd on Tanzanian Uranium-Au Property - More - October 17, 2006 | Item | E-mail
Raven Gold Corp. Adds Chief Financial Officer - More - October 17, 2006 | Item | E-mail
Luiri Gold Identifies Major New Gold Anomaly at the Luiri Hills Project in Zambia - More - October 17, 2006 | Item | E-mail
Everton Begins Drilling Pueblo Viejo Type Target at Jobo Claro in the Dominican Republic - More - October 17, 2006 | Item | E-mail
Franklin Mining Has Obtained a Report by Behre Dolbear on the Cerro Rico Mine - More - October 17, 2006 | Item | E-mail
De Beira Announces Sample Results for the Minanca Mining Project - More - October 17, 2006 | Item | E-mail
Enterayon Acquires Willa Property Parcel - More - October 17, 2006 | Item | E-mail
Candente-Orex Drill Mobilized to Pamel Property, CentralPeru - More - October 17, 2006 | Item | E-mail
Fronteer Development Group Inc.: Encouraging Silver-Gold Results From Clara and San Pedro Projects in Mexico - Phase II Drilling Program Underway - "Fronteer Development Group Inc. is pleased to report new silver-gold results from its recent drilling and trenching program at the Clara and San Pedro projects in Jalisco state, Mexico. Encouraging results to date have prompted a 3,000 metre follow-up Phase II drill program, which is currently underway. Results to date include favorable grades and widths of mineralization at both projects, which include the following highlights:" More - October 17, 2006 | Item | E-mail
Yale to Acquire up to 80% in Three Silver Properties in Zacatecas, Mexico - "The three properties, collectively called the Zacatecas Venture, are San Sabino, San Jose, and Salvador. All three properties are within eight kilometres of the Veta Grande processing plant, which IMPACT has recently announced that it has an option to purchase (see IMPACT's news release dated Sept. 28, 2006). By teaming with IMPACT, Yale has access to an aggressive well managed partner who is working toward becoming a dominant player in the Zacatecas District." More - October 17, 2006 | Item | E-mail
Randgold Resources announces New mine development underway - "The two open-cast mines at Loulo went into production late last year and to June 2006 had already poured 184 000 ounces of gold. The Yalea development will raise the project's production from 250 000 ounces per year to in excess of 400 000 ounces per year and reduce its cost profile over the next five years. It is expected to remain in production beyond 2020. The boxcut and portal construction at Yalea is now well advanced and excavation of the declines is scheduled to begin before the end of the year. Randgold Resources expects to access the first development ore in late 2007." More - October 17, 2006 | Item | E-mail
Canyon Resources Announces New Vice President of Operations - "Canyon Resources Corporation, a Colorado-based mining company, is pleased to announce the employment of Stuart L. Green as General Manager and Vice President of Operations. Mr. Green will begin his new position with Canyon on October 16, 2006, and will be based in California at the Briggs Mine. Stuart brings 30 years of open pit and underground mining operations experience and technical skills to this position." More - October 17, 2006 | Item | E-mail
Gold Fields offer for Western Areas okayed - "THE executive committee of the Securities Regulation Panel (SRP) said today it had approved an offer by Gold Fields to buy all the shares in Western Areas that it does not already own. Gold Fields is offering 35 of its own shares for 100 shares of Western Areas as part of a plan to take control of South Deep mine - the biggest gold deposit in the world." More - October 17, 2006 | Item | E-mail
Glamis Joins Goldcorp in Defense of Application; Provides Update on Progress Toward Transaction Closing - "Glamis Gold Ltd. announced today that it has been granted intervenor status in the application of Robert R. McEwen in which Goldcorp is the respondent. The application seeks, among other things, to have the Ontario Superior Court of Justice order Goldcorp to call a meeting of Goldcorp shareholders to approve the transaction between Goldcorp and Glamis." More - October 17, 2006 | Item | E-mail
Freeport-McMoRan Copper & Gold Inc. Reports Third-Quarter and Nine-Month 2006 Results - "Freeport-McMoRan Copper & Gold Inc. reported third-quarter 2006 net income applicable to common stock of $350.7 million, $1.67 per share, compared with net income of $165.8 million, $0.86 per share, for the third quarter of 2005. For the nine months ended September 30, 2006, FCX reported net income of $969.6 million, $4.64 per share, compared with $471.4 million, $2.48 per share, in the 2005 period." More - October 17, 2006 | Item | E-mail
Meridian Gold Inc. Third Quarter 2006 Release Date and Conference Call - "Meridian Gold Inc. would like to announce that the second quarter earnings results will be released after markets close TUESDAY, OCTOBER 24, 2006. Following the release, there will be a conference call at 9:00 a.m. EDT on WEDNESDAY, OCTOBER 25, 2006. The conference call is open to anyone by dialing 866-831-5605 in the United States or Canada, and 617-213-8851 from other international locations. Passcode #34885471. All participants will be required to register with the operator." More - October 17, 2006 | Item | E-mail
First Quantum's Guelb Moghrein Copper-Gold Mine in Mauritania Begins Commercial Production - "First Quantum Minerals Ltd. is pleased to announce that it has determined October 5th 2006, as the date that its Guelb Moghrein Copper-Gold Mine in Mauritania reached and commenced commercial production for GAAP purposes. In determining that commercial production had been reached for this purpose it was necessary for the sulphide circuit to have run at above 65% of original design capacity continuously for a period of at least one week." More - October 17, 2006 | Item | E-mail
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Gold Seeker Closing Report – Gold & Silver Fall About 1%; A Commodity Price Bubble?
“Over the past weeks and even months there has been a good deal of financial market commentary about the commodity price bubble bursting. Not so in this column. It has been my thinking for a long time that those who believed the price run-up was solely due to excessive hedge fund speculation were badly mistaken. Due to Café sleuthing and input coming my way, it appeared a fair amount of this buying was quietly going into Chinese hands (among others) behind the scenes … and that supply would not be coming back on the market. 
