-- Posted Thursday, 9 November 2006 | Digg This Article
| Close | Gain/Loss |
Gold | $634.40 | +$17.50 |
Silver | $12.96 | +$0.48 |
XAU | 142.37 | +4.35% |
HUI | 341.05 | +4.14% |
GDM | 1084.20 | +4.31% |
JSE Gold | 2867.89 | -1.85% |
USD | 85.18 | -0.32 |
Euro | 128.33 | +0.66 |
Yen | 84.81 | -0.11 |
Oil | $61.16 | +$1.33 |
10-Year | 4.633% | UNCH |
T-Bond | 112.5625 | UNCH |
Dow | 12103.30 | -0.60% |
Nasdaq | 2376.01 | -0.37% |
S&P | 1378.33 | -0.53% |
The Metals:
Gold fell a few dollars in access trade late yesterday before it rebounded to near unchanged in Asia and traded mostly slightly higher in London. It then started to move higher in mid-London trade and continued to gain in New York ahead of China’s announcement that they are considering diversifying out of their foreign exchange reserves. That statement sent gold even higher in late morning trade and helped it to close near its highs with a gain of 2.84%. Silver followed a very similar pattern and outpaced gold with a gain of 3.85%.
Euro gold rose near €495, platinum gained $40 to $1,202, palladium gained $10 to $334, and copper gained nearly 10 cents to about $3.31.
Gold and silver equities steadily rose throughout trade and closed with over 4% gains.
The Economy:
Report | For | Reading | Expected | Previous |
Import Prices | Oct | -2.0% | -1.0% | -2.0% |
Import Prices ex-oil | Oct | -0.6% | - | 0.2% |
Export Prices | Oct | -0.4% | -0.1% | -0.4% |
Export Prices ex-ag. | Oct | -0.5% | - | -0.3% |
Initial Claims | 11/04 | 308K | 318K | 328K |
Trade Balance | Sep | -$64.3B | -$66.0b | -$69.0B |
Michigan Sentiment | Nov | 92.3 | 93.5 | 93.6 |
Wholesale Inventories | Sep | 0.8% | 0.6% | 1.2% |
There are no major economic reports due out tomorrow.
The Markets:
Charts Courtesy of http://finance.yahoo.com/
Oil rose over 2% on cold weather forecasts and on further reaction to yesterday’s poor inventory reports. Natural gas rose as inventories fell a much more than expected 7 billion cubic feet.
China recently reached over $1 trillion in foreign exchange reserves, the most ever held by a single country. Today, “Chinese central bank governor Zhou Xiaochuan said China was ‘considering lots of instruments’ in diversifying” its foreign exchange reserves.
The U.S. dollar index remained near unchanged after today’s mixed economic data, but it then fell off markedly after China’s announcement that it had a “clear” plan to diversify its reserves, which many assumed to be away from the US Dollar.
“The long-term impact is going to be dramatic and sustainable,” said Firas Askari, head currency trader at BMO Capital Markets in Toronto. “The dollar has long been the reserve currency for the entire world. Now with central banks saying they are going to diversify away from the dollar, the dollar will suffer. The euro will be one of the biggest beneficiaries of the trend.”
Treasuries rose slightly after the economically disappointing Michigan Sentiment report, fell back near unchanged after China’s comments, and remained near unchanged after a mediocre 10-year note auction. “China is the second-biggest foreign holder of U.S. Treasuries with $339.0 billion as of August, according to Treasury Department data.”
The Dow, Nasdaq, and S&P fell as traders continued to sell pharmaceuticals after it now seems clear that the Democrats won not only the House, but also the Senate. Higher energy prices also hurt the transports as mixed economic data concerned investors as well.
Among the big names making news in the market today were Fannie and Freddie, Goodyear, 3M, Cisco Systems, J.C. Penney, and Viacom.
The Commentary:
“What struck me was how important gold’s role is as a single barometer, and vote of confidence, of the current administration, and for that matter, for others recently in power in the US. GOLD IS THAT IMPORTANT! If gold were to rally today, with the US market under early pressure, the Orwellians in power in Washington feared it would indicate a lack of confidence in the US financial markets and what lies ahead for the next two years of a lame duck Administration.
The easiest way to allay those fears (which are lurking anyway) is to hit the price of gold, for Paulson and others in his Gold Cartel believe the uninformed out there (of which there are so many) will view a decline in the price of gold as soothing … that everything is still OK as far as the US markets are concerned. What child’s play! And how incredible that so many of the dumbed down out there always fall for it, or never question what is really transpiring.
The irony is that what The Gold Cartel, and those pulling in the strings in Washington are, doing is not only pitifully trite, it is boring and only delaying the inevitable. The Gold Cartel is a retreating army that is in the process of losing the GOLD WAR.” - From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com
“December Gold finished up 18.5 at 636.8, 0.2 off the high and 13.8 up from the low.
December Silver closed up 0.5 at 13.05. This was 0.385 up from the low and 0.02 off the high.
Apparently renewed Chinese diversification talk served to lift gold prices sharply. It seems that the Chinese diversification theme is gaining prominence, as a current Fed member brought up the prospect early this week and during the session Thursday a Chinese Governor reiterated that Chinese indeed planned to diversify its reserves. Some players might have taken the diversification argument to mean, less Dollar and others might have taken the move to mean that China would actually move to hold more physical gold. In the end, seeing such massive price gains in gold suggests that something big was developing and a lower Dollar and talk of diversification is a big start. It is also possible that more gains in energy prices contributed to the strength in gold, which managed to reach the highest level since September 7th.
A massive range up in silver took prices to the highest level since early September. Apparently the market is getting direct spill over speculative support from the idea of Chinese reserve diversification. Apparently recent bearish physical supply side developments are being discounted by the trade and the investment buzz is seemingly dominating the headlines. It is possible that the weakness in the US equity market and the slide in the Dollar on Thursday served to increase the financial focus of silver traders, which in turn has relegated the typical physical supply factors to the back seat.” - The Hightower Report, Futures Analysis and Forecasting
The Statistics:
As of close of business: 11/08/2006
Gold Warehouse Stocks: | 7,525,639 | -64 |
Silver Warehouse Stocks: | 107,388,456 | +570,336 |
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 | 409.59 | 13,168,578 | US$ 8,206m |
LSE (London Stock Exchange) AND Euronext Paris | Gold Bullion Securities | 89.10 | 2,864,649 | US$ 1,815m |
Australian Stock Exchange (ASX) | Gold Bullion Securities | 10.25 | 329,388 | US$ 209m |
Johannesburg Securities Exchange (JSE) | New Gold Debentures | 9.88 | 317,781 | US$ 198m |
Note: Change in Total Tonnes from yesterday’s data: The NYSE added 5.56 tonnes and the ASX added 0.13 tonnes.
COMEX Gold Trust (IAU)
Profile as of 11/08/2006 | |
Total Net Assets | $841,522,434 | Ounces of Gold
in Trust | 1,365,342.180 |
Shares Outstanding | 13,750,000 | Tonnes of Gold
in Trust | 42.47 |
Note: No change in Total Tonnes from yesterday’s data.
Silver Trust (SLV)
Profile as of 11/08/2006 | |
Total Net Assets | $1,320,047,021 | Ounces of Silver
in Trust | 104,735,443 |
Shares Outstanding | 10,500,000 | Tonnes of Silver
in Trust | 3,257.6 |
Note: No change in Total Tonnes from yesterday’s data.
The Stocks:
Barrick’s (ABX) waived minimum tender condition of its offer to acquire the outstanding common shares of NovaGold (NG), Pacific Rim’s (PMU) drill results, Exeter’s (XRA) Amex listing, Great Basin’s (GBN) Board changes and new CFO, Fronteer’s (FRG) drill results, Zhaojin Mining’s IPO, ECU’s (ECU.V) mill purchase, Apex Silver’s (SIL) quarterly results, Hecla’s (HL) quarterly results, and Silver Dragon’s (SDRG.OB) closed financing were among the big stories in the gold and silver mining industry making headlines today.
WINNERS
1. Minco Mining | MMK +11.11% $1.70 |
2. Mines MGMT | MGN +9.01% $5.93 |
3. Vista Gold | VGZ +8.97% $8.50 |
LOSERS
1. Solitario | XPL -5.61% $3.53 |
2. Hecla Mining | HL -4.61% $6.62 |
3. U.S. Energy | USEG -3.87% $4.47 |
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:
Barrick Waives Minimum Tender Condition in NovaGold Offer - "Barrick Gold Corporation announced today that it has waived the minimum tender condition of its offer to acquire the outstanding common shares of NovaGold Resources Inc. at a best and final price of US$16.00 cash per share. Previously, the offer was conditional on 50.1 per cent of the common shares being deposited to the offer at the expiry time. As a result of the waiver, all NovaGold shares deposited to Barrick's offer by 11:59 p.m. (Toronto time) on November 21, 2006 will be taken up and accepted for payment assuming continued satisfaction of the other conditions of the offer. Payment for those shares will be made on or before November 24, 2006." More
- November 09, 2006 | Item | E-mail
Gold Seeker Closing Report – Gold & Silver Gain Nearly 3% & 4%; China Plans to Diversify Reserves