-- Posted Thursday, 16 August 2007 | Digg This Article
| Close | Gain/Loss |
Gold | $648.00 | -$20.90 |
Silver | $11.40 | -$1.13 |
XAU | 125.64 | -5.14% |
HUI | 300.14 | -5.12% |
GDM | 932.87 | -5.07% |
JSE Gold | 2218.25 | -3.05% |
USD | 81.75 | -0.11 |
Euro | 134.01 | -0.64 |
Yen | 88.50 | +2.23 |
Oil | $71.00 | -$2.33 |
10-Year | 4.600% | -0.106 |
T-Bond | 110.59375 | +1.03125 |
Dow | 12845.78 | -0.12% |
Nasdaq | 2451.07 | -0.32% |
S&P | 1411.26 | +0.32% |
The unwinding of the yen carry trade made another huge move today. Traders that previously borrowed cheap yen to buy other higher yielding assets have been forced to sell those assets, which seems to be pretty much everything, and buy back their previously borrowed yen. The end result was a strengthening yen and weakening stocks, gold, oil, and other assets. Indiscriminate selling, forced liquidation, throwing the baby out with the bath water… call it whatever you want, but as irrational as it seems the biggest and best gainers this year were sold most aggressively today as many were forced to raise cash for a variety of reasons.
The catalyst for this move was, of course, further credit worries. Countrywide’s bankruptcy rumors from yesterday spread to today as they “borrowed the entire $11.5 billion available in a bank credit line” to fund its operations. Poor economic data and rumors that a hedge fund may collapse certainly didn’t help things, but rumors of a possible emergency fed rate cut seemed to calm the markets and take them well off their lows by the end of trade. One fed operation that can be confirmed today was the injection of $17 billion in liquidity.
The Metals:
Gold traded roughly $5 lower around $664 in Asia and London before it plunged over $10 more a little after 10AM EST in New York and tried to stabilize in the low $650s for the next two hours of trade, but it then plummeted further a little after noon EST and dropped to as low as $641.70 by 1PM ahead of a roughly 1% rebound into the close that left it with a loss of 3.12%. Silver dropped to $11.10 before it rebounded over 2% off its low, but it still ended with a loss of 9.02%. However, at the time of writing, both metals are higher in after hours access trade with gold seeing about 0.66% gains and silver finding 3.25% gains from today’s closes.
Euro gold fell to about €483, platinum lost $34 to $1,227, palladium lost $15 to $331, and copper lost over 22 cents to about $3.18.
Gold and silver equities fell roughly 9% in the first hour of trade and then rebounded to see about 5% losses as gold and silver bounced from their initial drop. Gold and silver then dropped again and made new lows as the Dow and other major indices all plummeted to new lows as well, but the XAU, HUI, and GDM refused to make significant new lows and held about 8% lower before they rebounded again in afternoon trade and ended with about 5% losses.
The Economy:
Report | For | Reading | Expected | Previous |
Initial Claims | 8/11 | 322K | 315K | 316K |
Housing Starts | July | 1381K | 1405K | 1470K |
Building Permits | July | 1373K | 1400K | 1413K |
Philadelphia Fed | Aug | 0.0 | 8.0 | 9.2 |
Housing Starts fell to the lowest in a decade as the Philadelphia Fed business activity index gave its weakest reading since December 2006. Tomorrow at 10AM EST brings the preliminary reading for August Michigan Sentiment expected at 88.5.
The Markets:
Charts Courtesy of http://finance.yahoo.com/
Oil fell on global economic slowdown worries despite uncertainty over Hurricane Dean that is moving into the Caribbean, but it remains quite uncertain where exactly that hurricane is headed and if it will do any real damage. Tropical Storm Erin was downgraded back down to a depression as it hit landfall and weakened without reports of major damage.
The U.S. dollar index fell despite marked weakness in the euro as the yen surged higher on carry trade unwinding.
Treasuries rose on safe haven buying as stocks fell for most of trade. “Two-year notes rose for a fourth day following the biggest gain in three-month bills since 1989, pushing the gap between two- and 10-year yields to the widest since May 2005.”
The Dow fell as much as 343 in early trade before it bounced back and the Nasdaq and S&P followed similar percentage moves while financials traded higher for most of trade. Amazingly all three indices ended mixed and near unchanged after a huge rally higher in the last half hour of trade.
Among the big names making news in the market today were Moody’s, KKR, Countrywide, and J.C Penney.
The Commentary:
A silver Update from InvestmentRarities:
“Silver analyst Theodore Butler claims silver to be more oversold than ever. According to Ted, ‘The best thing you can own in the world today has just been marked down. Forced liquidations and margin calls have caused silver to plummet. This will only be temporary,’ says Butler. ‘Buy silver now.’”
“December Gold finished down 21.7 at 658, 17.7 off the high and 6 up from the low.
September Silver closed down 1.06 at 11.495. This was 0.395 up from the low and 0.925 off the high.
While the flight to quality crowd probably remained hopeful throughout the session Thursday, it had to be painfully clear to the bull camp that gold was simply not in a position to assume its position as a safe haven. However, a number of players continue to hold out hope that at some point extreme turmoil in the financial markets will reverse the bearish tide of sentiment toward the gold market. However, as suggested in the mid day coverage, the physical commodity market carnage was widespread and technical damage to many charts only seemed to add to the bearish tone.
With the base metals markets coming under intense liquidation early in the session and then the US stock market caving in for another very significant failure, the silver trade is fearing deflation and recession, instead of inflation and growth. Like the gold market silver does seem to have a quadrant of players that remain hopeful of some type of flight to quality buying interest and to others that simply suggests that the market has yet to reach rock bottom.” - The Hightower Report, Futures Analysis and Forecasting
GATA Posts:
Mike Kosares: There's no rationalizing dishonesty by central banks
Gartman Letter: Gold rigging by central banks is only to be expected
Antal Fekete challenges Barrick and solves the interest-rate 'conundrum'
Maybe the central banks can start leasing eggs
The Statistics:
As of close of business: 8/15/2007
Gold Warehouse Stocks: | 7,085,083 | -46,655 |
Silver Warehouse Stocks: | 134,256,622 | +251,304 |
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 | 510.21 | 16,403,846 | US$ 10,944m |
London Stock Exchange (LSE) AND Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse ) | Gold Bullion Securities | 88.49 | 2,844,981 | US$ 1,845m |
Australian Stock Exchange (ASX) | Gold Bullion Securities | 12.71 | 408,385 | US$ 265m |
Johannesburg Securities Exchange (JSE) | New Gold Debentures | 14.28 | 459,201 | US$ 306m |
Note: No change in Total Tonnes from yesterday’s data.
COMEX Gold Trust (IAU)
Profile as of 8/15/2007 | |
Total Net Assets | $1,016,360,252 | Ounces of Gold
in Trust | 1,519,696.371 |
Shares Outstanding | 15,350,000 | Tonnes of Gold
in Trust | 47.27 |
Note: No change in Total Tonnes from yesterday’s data.
Silver Trust (SLV)
Profile as of 8/15/2007 | |
Total Net Assets | $1,771,192,792 | 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:
Almaden’s (AAU) optioned project and management changes, Barrick’s (ABX) limited cash investment exposure, Buenaventura’s (BVN) unaffected operations by an earthquake in Peru, Richmont’s (RIC) drilling, New Gold’s (NGD) cash holding update, Royal Gold’s (RGLD) fiscal 2007 financial results, Great Basin’s (GBN) project developments, Agnico-Eagle’s (AEM) expiring warrants, Freeport’s (FCX) possible increase in gold royalties in Indonesia, South American Silver’s (SAC.TO) drill results, Minco Silver’s (MSV.TO) assay results, Minefinders’ (MFN) project update, Excellon’s (EXN.V) drilling, Silver dragon’s (SDRG.OB) appointments, and Valencia’s (VVI.V) completed drill programs were among the big stories in the gold and silver mining industry making headlines today.
WINNERS
1. U.S. Gold | UXG +6.09% $6.27 |
2. Royal Gold | RGLD+5.28% $29.11 |
3. Apex Silver | SIL +4.29% $17.50 |
LOSERS
1. New Gold | NGD -19.25% $4.74 |
2. Mines MGMT | MGN-16.07% $2.82 |
3. Ivanhoe | IVN -13.78% $9.26 |
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:
Wesdome Gold Mines Ltd. - 2007 Second Quarter Results - More
- August 16, 2007 | Item | E-mail
Candente Resource Corp.-Personnel and Projects Are Safe and All Activities Operate as Usual - More
- August 16, 2007 | Item | E-mail
Almaden Options Ponderosa Project to Strongbow Exploration - "Almaden Minerals Ltd. (Toronto:AMM.TO - News)(AMEX:AAU - News) is pleased to announce it has signed an agreement with Strongbow Exploration Inc. (CDNX:SBW.V - News) whereby Strongbow can earn a 60% interest in the 6,950 ha Ponderosa property, located within the Spences Bridge gold belt, approximately 30 km southwest of the city of Merritt in southern British Columbia. The property hosts the Axel Ridge gold showing which was discovered by Almaden in June 2006 (see Almaden news release of December 12, 2006)." More
- August 16, 2007 | Item | E-mail
EXMIN Provides Exploration Drill Results From the Horcon Project, Guanajuato Region, Mexico - More
- August 16, 2007 | Item | E-mail
Redcorp Ventures Ltd.: Payment of a Portion of Outstanding Short-Term Funds - More
- August 16, 2007 | Item | E-mail
Gold Seeker Closing Report: Gold and Silver Fall Over 3% and 9%