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The Markets:

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

Oil fell in early trade on profit taking from last week’s respectable gains, but it then rose in late trade and closed at a new 10-month high on continued worries over terrorist attacks ahead of the 4^th of July holiday in the U.S. that also brings strong demand for gasoline during the busy summer driving season.

The U.S. dollar index fell dramatically to an over 2 month low as both the euro and yen found nice gains on worries over the U.S. financial sector stemming from potential problems with subprime mortgages.  The British Pound rose to a 26 year high versus the U.S. dollar and the New Zealand dollar rose above $0.78 “for the first time since being floated 22 years ago.”

Treasuries rose and interest rates fell despite a stronger than expected ISM reading as buying was spurred on both by terror anxiety and general worries over the health of the entire U.S. financial sector.  Of special note is the yield on the 10-year closing back under 5% for the first time in nearly a month.

The Dow, Nasdaq, and S&P rose on a new batch of takeover news and lower interest rates in the face of decent economic data.

Among the big names making news in the market today were Och-Ziff, Apple, Bear Stearns, Manor Care and Carlyle Group, and Linn Energy and Dominion.

The Commentary:

“August Gold finished up 8.3 at 659.2, 2.1 off the high and 5.2 up from the low.

July Silver closed up 0.269 at 12.622. This was 0.022 up from the low and equal to the high.

With a very impressive three day up pattern, the August gold contract has at least partially turned the tables on the bear camp. While some players suggested that the gold market was being lifted by renewed terrorism concerns and others suggested that the statements from Putin regarding Iran were cause for flight to quality buying in the gold market, the main reason behind the gold rally was probably mostly the slide in the Dollar. In fact, with the regularly scheduled US economic information on the day slightly better than expected and the Dollar falling, the gold market was able to get a lift from several different angles. In the end, seeing the US and Russia united against Iran could certainly increase the odds of severe sanctions against Iran and Iran has indicated that some economic sanctions will be considered by Iran as a military threat. With the stock market strong and the equity market strong, the outside market environment was simply conducive to the bull case and with the gold market climbing back above the 200 day moving average it is possible that even the technical players were turning fresh buyers of gold.

While the September silver was a long way from regaining its 200 day moving average, it did fashion an impressive range up extension and that probably prompted some short to cover. With the rest of the metals complex higher, the energies recovering and the US equity market seeing some strength it wasn't surprising to the silver market regain its footing. Certainly the silver market benefits from the potential for a united front against Iran, but we suspect that silver, platinum and copper could see another round of sanctions against Iran as a negative demand factor.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Rob Peebles: The CDO flying circus

S&P, Moody's masking $200 billion of subprime bond risk

With CDOs, Wall Street sold the world a box of sewage

Peter Brimelow: Gold bugs disappointed but keep the faith

A year after defeat, Mexican leftist fades away

Move away from U.S. dollar reserves is still all talk

Avoiding 'made in China' labels isn't easy

No inflation in U.S.? There's plenty in China

The Statistics:

As of close of business: 6/29/2007

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

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

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:

A 6% wage hike offer to South African workers to potentially avoid a strike, U.S. Energy’s (USEG) stock buy back program, Apollo Gold’s (AGT) NI 43-101 mineral reserve and resource estimate showing 1,000,000 ounces at Black Fox, and MAG Silver’s (MAG.V) listing on the AMEX were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS