The Markets:

Charts Courtesy of http://finance.yahoo.com/

Oil rose slightly and gasoline rose over 4% on supply disruptions in Nigeria and Congo as traders also worried about a tropical storm headed for the East coast of the U.S.

The U.S. dollar index rose despite a worse than expected trade deficit and despite the fact that the Bank of England rose interest rates to 5.5% and the European Central Bank held interest rates at 3.75% and indicated future interest rate hikes as expected.  Prior to this week’s meetings, the markets view had been one that the fed may cut rates while the BoE and ECB will raise rates.  Now that all three meetings are over, the view has changed slightly to that the fed will likely not cut rates soon while the BoE and ECB may not be as aggressive in raising rates as previously thought and the dollar ultimately found some strength as traders unwound positions to adjust to that view.

Treasuries rose after a larger than expected trade deficit was released and the stock market fell markedly, but gains pared after a 30-year note auction drew poor demand.

The Dow, Nasdaq, and S&P fell over 1% on news that retailers reported the “weakest April sales results on record.”  Fears that the fed may cause a recession by not cutting interest rates and the need for a correction to the market’s recent bull run were also contributing factors to today’s selling.

Among the big names making news in the market today were Pediatrix, Costco, Vonage, JetBlue, Wal-Mart, Federated, Sara Lee, and Viacom.

The Commentary:

“As part of the consolidation process gold is falling back to test support again.   As it has failed to date to break up through the $700 and the $ looks stronger today, the funds are pressing gold down to support levels heavily today.  

With the U.S. Trade deficit widening the $ was expected to slip, but the support it is receiving right now is weighing down on gold, but the fundamentals remain solid for gold longer term. 

The $ is fighting hard not to fall, despite a fundamental picture that says it should.   Once it gives us clear direction gold will react too.

Right now the Technical picture for gold shows a narrowing of the highs and lows, consistent with a short-term pennant, so once the narrowing of the highs and lows comes to the point of the pennant, we would expect a strong move either way.    It is impossible to set a time on this.

South African Gold Reserves

There has been much debate on whether the South African Reserve Bank has been buying gold because South African gold reserves increased US$73 million to US$2.71 billion in April.   The policy of the S.A.R.B. is that they change the price of the gold reserves in line with market prices, regularly.   Hence expect South African gold reserves to climb and fall in line with market prices.   The South African Reserve Bank holds and has held for some time, 124.4 tonnes of gold [4,000,000 ounces].   We believe that it is reasonable to assume that the South African Reserve Bank will continue to hold this level, but that they will review this policy from time to time.” - Julian D.W. Phillips, www.goldforecaster.com

“June Gold finished down 15.5 at 667, 12.5 off the high and 1 up from the low.

July Silver closed down 0.33 at 13.14. This was 0.02 up from the low and 0.27 off the high.

The gold market started out under pressure and saw the pressure increase as the session progressed. With the Dollar managing an upside breakout up very early in the session the pressure from the currency market was present from the start, but with the Dollar showing a much more aggressive rise later in the session, the trade has become fearful of a long term short covering rally in the Dollar. With the US stock market also showing considerable weakness and the trade seeing talk that the Chinese might have to move again to restrain their economy, the bear camp seemed to have a number of bearish macro economic issues to embrace. Certainly the sharp slide in copper prices added to the gold markets woes, and with the June gold contract also falling below a series of critical chart support levels, it is likely that longer term technical stop loss selling was contributing to the weakness Thursday.

While the silver market was under moderate pressure, at times the silver market seemed to be holding up relative better than other metals markets. With the recent correlation between silver and copper prices it wasn't surprising to see silver prices being undermined by a massive slide in copper prices. With the added talk of a possible upcoming tightening move by the Chinese, some silver traders might be concerned of follow through selling in both copper and silver prices on Friday morning.” - The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

With copper coin, Liberty Dollar defies U.S. Mint's threat

The Statistics:

As of close of business: 5/09/2007

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: The ASX added 0.08 tonnes.

COMEX Gold Trust (IAU)

Note: No change in Total Tonnes from yesterday’s data.

Silver Trust (SLV)

Note: No change in Total Tonnes from yesterday’s data.

The Stocks:

Vista Gold’s (VGZ) closed arrangement with and listing of Allied Nevada (ANV), Almaden’s (AAU) dealt zinc-silver properties, first quarter results from Northern Orion, (NTO), Richmont (RIC), Glencairn (GLE), and Golden Star (GSS), Great panther’s (GPR.TO) drill results, U.S. Silver’s (USA.V) acquired mining leases and mineral rights, SilverCrest’s (SVL.V) updated project progress, and Canadian Shield’s (CSP.V) and Esperanza Silver’s (EPZ.V) signed property earn-in agreement were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

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:

Palladon Announces New CFO and Board Appointment - More
- May 10, 2007 | Item | E-mail

Almaden Deals Yukon Zinc-Silver Properties - "Almaden Minerals Ltd. (Toronto:AMM.TO - News)(AMEX:AAU - News) ("Almaden") is pleased to announce that it has signed a letter of intent with Tarsis Capital Corp. (CDNX:TCC-P.V - News) ("Tarsis") whereby Tarsis will acquire certain mineral projects held by Almaden in the Yukon and Mexico