-- Posted Tuesday, 14 August 2007 | Digg This Article
| Close | Gain/Loss |
Gold | $668.80 | -$1.00 |
Silver | $12.70 | -$0.07 |
XAU | 138.33 | -3.30% |
HUI | 330.52 | -3.00% |
GDM | 1030.46 | -2.98% |
JSE Gold | 2256.33 | -0.94% |
USD | 81.49 | +0.42 |
Euro | 135.44 | -0.79 |
Yen | 84.91 | -0.43 |
Oil | $72.38 | +$0.76 |
10-Year | 4.732% | -0.046 |
T-Bond | 109.8125 | +0.34375 |
Dow | 13028.92 | -1.57% |
Nasdaq | 2499.12 | -1.70% |
S&P | 1426.54 | -1.82% |
The markets opened today as if everyone seemed to know that there was another shoe to drop (if not a whole marathon of shoes) in the ongoing subprime contagion and credit fiasco, but few seemed to be looking up at that impending doom and instead walked with blinders on and went on about their merry way. While the ECB injected more liquidity for the fourth session in a row, the fed took no action in an effort to further assure the markets that everything was back to normal.
However, that next shoe did drop not long into trading as Sentinel Management Group Inc. asked the CFTC “to allow it to halt client redemptions until it can conduct them in an orderly fashion.” Many tried to downplay this problem as a singular event in a company that oversees only about $1.6 billion dollars in a much larger market, but the fact is that Sentinel deals in asset back commercial paper. This is not some fund that made a wrong bet on subprime mortgages, but one that deals in high quality investments and “makes money mainly by betting on overnight interest rates outpacing yields on short-term Treasury bonds.” To make matters worse for Sentinel, the CFTC responded later in the day and said it “had no authority to grant Sentinel's request to block client redemptions. ‘We have no role in whether or not the company does this and whether the client accepts this,’ a CFTC official said.” Clearly credit problems are not going away anytime soon. Also emerging at the end of the day appear to be some significant problems at Thornburg who is “citing ‘significant disruptions’ in the mortgage market” as reason to delay its dividend.
The Metals:
Gold traded mostly slightly lower in Asia and London and then dipped to $665.30 at about 9AM EST in early New York trade before it spiked over $5 higher off that low in the next 35 minutes of trade to above $670, but it then fell back off to trade slightly lower again for the rest of the day and closed with a loss of 0.15%. Silver dropped to $12.65 before it spiked to above $12.80, but it also fell back off into the close and ended with a loss of 0.55%.
Euro gold rose over €493, platinum lost $8 to $1,267, palladium lost $4 to $350, and copper fell over 14 cents to about $3.41.
Gold and silver equities fell over 2% in the first hour and a half of trade before they rebounded and saw only about 1.5% losses by early afternoon, but they then fell back off into the close along with the major indices and ended with roughly 3% losses.
The Economy:
Report | For | Reading | Expected | Previous |
PPI | July | 0.6% | 0.1% | -0.2% |
Core PPI | July | 0.1% | 0.2% | 0.3% |
Trade Balance | June | -$58.1B | -$61.0B | -$59.2B |
Tomorrow at 8:30AM EST brings CPI for July expected at 0.1%, Core CPI expected at 0.2%, and the NY Empire State Index for August expected at 19.0. At 9AM are Net Foreign Purchases for June and at 9:15 is Industrial Production for July expected at 0.3% and Capacity Utilization expected at 81.7%.
The Markets:
Charts Courtesy of http://finance.yahoo.com/
Oil rose as a tropical depression was upgraded to tropical storm Dean in the Atlantic and brewing storms in the Gulf of Mexico also raised concerns. Indications also point towards OPEC keeping output levels unchanged at their next meeting despite the fact that they increased their overall demand outlook for 2007. OPEC did however mention that subprime problems could lessen demand due to slowing economic growth later in the year should those problems continue and that seemed to cap some gains in the energy sector.
The U.S. dollar index rose again as rate futures continued to reduce chances for a fed rate cut while PPI came in higher than expected and raised inflationary fears.
Treasuries rose by the close as interest rates moderated while stocks fell. Traders also speculated that recent European Central Bank injections may mean less tightening down the road from the ECB and that encouraged some U.S. treasury buying on the assumption that European yields will not rise as previously expected.
The Dow opened briefly higher as markets remained calm over night, but it soon fell over 175 points as a poor outlook from Wal-Mart raised worries over consumer spending and Sentinel announced that it wanted to halt client redemptions which raised credit concerns. The Dow then came off its lows in late morning trade along with the Nasdaq and S&P as Sentinel’s problems appeared to be contained, but all three indices fell back off to new lows by mid-afternoon and closed over 1.5% lower as traders looked further into these apparently worsening problems.
Among the big names making news in the market today were Sentinel, Fortress, Citigroup, Nokia, Mattel, Wal-Mart, Home Depot, Bear Stearns, and Goldman Sachs.
The Commentary:
“December Gold finished down 1.2 at 679.7, 2.3 off the high and 2.2 up from the low.
September Silver closed down 0.107 at 12.748. This was 0.038 up from the low and 0.152 off the high.
Despite the fact that equity prices were under moderate pressure throughout the trading session, the gold market was simply not able to benefit from the developing flight to quality conditions. In fact, the metals markets were presented with a fresh fund problem that was closer to the commodities market and yet beyond a light liquidation wave that seemed to be fostered by fears of fund liquidation, the metals markets weren't markedly impacted. Unfortunately the gold market clearly didn't see the fresh financial market issue as a flight to quality development. In the end, the sharp rise in the Dollar seemed to give the bear camp in gold the capacity to control prices for most of the session.
Like gold, the silver market remained under pressure in the wake of a significant upward extension in the Dollar. However, the fear of slowing off the continued slide in the equity market was probably weighing in on silver and copper prices throughout the trading session. In short, the silver trade isn't garnering much in the way of flight to quality interest and or the fear of a financial debacle just isn't being given that much credence.” - The Hightower Report, Futures Analysis and Forecasting
GATA Posts:
Will commodities exchanges 'fail up' or 'fail down' with gold?
China eases foreign exchange controls
Hedge fund losses prompt exits as deadline nears
Learn from Rome's fall or else, U.S. comptroller general warns
The Statistics:
As of close of business: 8/13/2007
Gold Warehouse Stocks: | 7,131,738 | - |
Silver Warehouse Stocks: | 133,943,980 | - |
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 | 509.29 | 16,374,170 | US$ 10,949m |
London Stock Exchange (LSE) AND Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse ) | Gold Bullion Securities | 94.63 | 3,042,450 | US$ 2,038m |
Australian Stock Exchange (ASX) | Gold Bullion Securities | 12.71 | 408,394 | US$ 274m |
Johannesburg Securities Exchange (JSE) | New Gold Debentures | 14.28 | 459,216 | US$ 307m |
Note: No change in Total Tonnes from yesterday’s data.
COMEX Gold Trust (IAU)
Profile as of 8/9/2007 | |
Total Net Assets | $988,660,551 | Ounces of Gold
in Trust | 1,494,949.081 |
Shares Outstanding | 15,100,000 | Tonnes of Gold
in Trust | 46.50 |
Note: No change in Total Tonnes from yesterday’s data.
Silver Trust (SLV)
Profile as of 8/9/2007 | |
Total Net Assets | $1,837,191,153 | Ounces of Silver
in Trust | 141,612,134.500 |
Shares Outstanding | 14,250,000 | Tonnes of Silver
in Trust | 4,404.63 |
Note: No change in Total Tonnes from yesterday’s data.
The Stocks:
Yamana’s (AUY) boosted cash portion of its bid for Meridian (MDG), Tanzanian Royalty’s (TRE) repriced private placement, Rubicon’s (RBY) drill program, Great Basin’s (GBN) agreement signings, Apollo Gold’s (AGT) filed 43-101, Orezone’s (OZN) permit process, and quarterly results from Fronteer (FRG), Miramar (MNG), Glencairn (GLE), Rio Narcea (RNO), ECU Silver (ECU.TO), and Pan American Silver (PAAS) were among the big stories in the gold and silver mining industry making headlines today.
WINNER
1. Northern Orion | NTO +0.20% $5.04 |
LOSERS
1. Paramount | PZG-9.51% $2.57 |
2. Exeter | XRA-8.14% $2.71 |
3. Rubicon | RBY -8.12% $1.81 |
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:
Tanzanian Royalty Chairman Agrees to Reprice Second Tranche of $3 Million Private Placement - Tanzanian Royalty Exploration Corporation advises that Mr. James E. Sinclair has agreed to reprice the second tranche of the private placement. As announced on August 10, 2006, Mr. Sinclair agreed to purchase common shares of the Corporation representing an aggregate value of $3,000,000. Such shares are to be purchased in 8 quarterly tranches of $375,000 each, commencing February 1, 2007." More
- August 14, 2007 | Item | E-mail
Fronteer Reports Results From the Second Quarter of 2007 - "The Company's net loss for the three months ended June 30, 2007 was $9,488,197 or $0.14 per share compared to net loss of $1,811,489 or $0.03 for the three months ended June 30, 2006. The Company's net loss for the six months ended June 30, 2007 was $10,630,874 or $0.16 per share compared to net income of $8,202,874 for the six months ended June 30, 2006." More
- August 14, 2007 | Item | E-mail
Platinex Completes Second Closing of Private Placement - More
- August 14, 2007 | Item | E-mail
Miramar Announces Q2 2007 Financial Results - "Miramar Mining Corporation (Toronto:MAE.TO - News)(AMEX:MNG - News) today announced its financial results for the second quarter ended June 30, 2007. For the three month period, Miramar reported consolidated net loses of $2.8 million or $0.01 per share compared to net earnings of $1.9 million or $0.01 per share for the same period in 2006. The Company ended the quarter with cash and short term investments of $131.4 million." More
- August 14, 2007 | Item | E-mail
South American Silver Corp. Files June 30, 2007 Quarterly Report - More
- August 14, 2007 | Item | E-mail
Aurora Reports 2007 Second Quarter Results - More
- August 14, 2007 | Item | E-mail
General Minerals Corporation Files June 30, 2007 Quarterly Report - More
- August 14, 2007 | Item | E-mail
Augyva Closes a $167,500 Private Placement and Grants Options - More
- August 14, 2007 | Item | E-mail
Chester Mining Company Acquires 50% Interest in Tesorito Project in Mexico - More
- August 14, 2007 | Item |
Gold Seeker Closing Report: Gold and Silver Fall Slightly Again; Credit Worries Worsen