-- Posted Friday, 7 September 2007 | Digg This Article
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| Close | Gain/Loss | On Week |
Gold | $700.10 | +$5.60 | +4.00% |
Silver | $12.50 | +$0.19 | +4.24% |
XAU | 151.53 | -0.17% | +7.64% |
HUI | 358.13 | +0.24% | +9.44% |
GDM | 1114.74 | +0.25% | +9.36% |
JSE Gold | 2526.68 | +119.76 | +8.13% |
USD | 79.96 | -0.50 | -1.06% |
Euro | 137.71 | +0.85 | +0.97% |
Yen | 88.21 | +1.50 | +2.25% |
Oil | $76.70 | +$0.40 | +3.59% |
10-Year | 4.368% | -0.132 | -3.72% |
Bond | 113.53125 | +1.25 | +1.57% |
Dow | 13113.38 | -1.87% | -1.83% |
Nasdaq | 2565.70 | -1.86% | -1.18% |
S&P | 1453.55 | -1.69% | -1.39% |
The Metals:
CoT Reports: Gold | Silver
Spot gold rose to its highest today since May 2006 when it climbed to as high as $725 for the first time in 25 years. Gold traded mixed in Asia and London and then spiked higher following the release of poor jobs data in New York. After seeing over $10 gains and climbing over $706 by 10AM EST, gold did moderate a bit into the close, but it still ended with a gain of 0.81%. Silver climbed over $12.60 before it also cut some of its gains by early afternoon, but it then spiked back higher in afternoon trade and ended near its session high with a gain of 1.54%.
Euro gold rose over €509, platinum gained $7 to $1,290, palladium lost $2 to $332, and copper fell nearly 5 cents to abut $3.27.
Gold and silver equities saw roughly 1% gains for most of trade despite noticeable weakness in the greater indices, but the miners were dragged down to about unchanged by the close as gold ended off its earlier highs and the Dow, Nasdaq, and S&P ended with nearly 2% losses.
The Economy:
Report | For | Reading | Expected | Previous |
Nonfarm Payrolls | Aug | -4K | 110K | 68K |
Unemployment Rate | Aug | 4.6% | 4.6% | 4.6% |
Hourly Earnings | Aug | 0.3% | 0.3% | 0.3% |
Average Workweek | Aug | 33.8 | 33.8 | 33.8 |
Wholesale Inventories | July | 0.2% | 0.5% | 0.3% |
August’s jobs fell for the first time in four years despite a BLS adjustment of adding 120,000 payrolls. June and July’s payrolls were downwardly revised by 81,000 jobs to add to the day’s economic disappointment. As if that weren’t enough, “former Federal Reserve Chairman Alan Greenspan said the current market turmoil is ‘identical’ in many ways to that which occurred in 1987 and 1998, the Wall Street Journal reported in its online edition on Friday.”
A fed rate cut now seems no longer a question of if, but now when and how much, as the fed will no longer be seen as just bailing out the financials and others, but can argue that they are cutting rates due to broad-based slowing economic growth as the word “recession” is uttered more than one can count on outlets like CNBC lately when it was only seldom used and followed by laughter due to its Wall Street perceived ridiculousness just a month ago. Perhaps most ominous is the fact that the impact of the credit crunch that first evidenced itself in the middle of August has yet to be calculated with regards to upcoming data and reports like September’s jobs data may be even worse.
All of this week’s economic reports:
Next week’s economic highlights include Consumer Credit on Monday, the Trade Balance on Tuesday, Initial Jobless Claims and the Treasury Budget on Thursday, and the Current Account, Export and Import Prices, Retail Sales, Capacity Utilization, Industrial Production, Business Inventories, and Michigan Sentiment on Friday.
The Markets:
Charts Courtesy of http://finance.yahoo.com/
Oil rose as concerns over tight supplies and geopolitical worries trumped possible waning demand due to slowing economic growth.
The U.S. dollar index plunged under 80 to a new 15-year low as jobs data all but ensured at least a quarter point interest rate cut by the fed at their next meeting on September 18th, if not an earlier and/or larger cut in rates.
Treasuries soared higher and interest rates plunged to new lows across the board as a weakening economic outlook pushed bonds higher. The yield on the 2-year dropped under 4%, the yield on the 10-year fell under 4.4%, and the yield on the 30-year fell under 4.7%.
The Dow, Nasdaq, and S&P fell markedly on the dismal jobs report. Many were hoping for a poor report to help solidify a fed rate cut, but it seems few thought the report would be so bad that it would show a net decline in payrolls for the first time in four years.
Among the big names making news in the market Friday were BMW, Audi, Mercedes, Beazer, Harley-Davidson, and Hovnanian.
The Commentary:
“Gold is posturing itself for a potential move to record highs seen last year as we are experiencing a technical breakdown in the US Dollar Index. The technical signals are flashing breakout in gold with the price surpassing the $700 market. Should this $700 price hold as we start next week, the next week could be as spectacular as this week has proven to be.
$700 remains significant here – investors will be asking if this is a false breakout or not. If the gold price holds above $700, a new wave of investment funds is likely to feed this momentum. The fundamentals are in place and now the technicals are following.”- Peter Spina, www.goldforecaster.com
“December Gold finished up 5.1 at 709.7, 6.8 off the high and 3.5 up from the low.
December Silver closed up 0.227 at 12.76. This was 0.2 up from the low and 0.06 off the high.
With gold managing another new high for the move and forging the run up in the face of distinctly disappointing US economic news, one gets the sense that gold is indeed being lifted by flight to quality buying. However, with the US Dollar also coming under pressure, it is possible that some of the buying in gold was prompted by the action in the currency markets. On the other hand, to see gold prices manage such an impressive run up in the face of recessionary dialogue is certainly a change of pace for the trade. Some players actually suggested that gold was being bid up because of fears that the US financial crisis might get out of hand and is just another example of the flight to quality theme. However, with the Press carrying a story that a Golf ETF was one of the stocks that hit a new 52 week high, it is clear that investor interest in gold is coming in along side the flight to quality interest.
While the silver market initially managed another new high for the move, the silver market seemed to give back the initial gains rather quickly. In fact, given the gains in gold prices, the magnitude of the silver gains certainly suggests that silver is simply following in the footsteps of the gold market. With the platinum market also joining into the recent upward march in gold prices, some players suggested that fresh buys in the silver market were made somewhat more appealing as the wave of gains in all the precious metals has created a measure of credibility.”- The Hightower Report, Futures Analysis and Forecasting
GATA Posts:
European rate increases squelched on eve of explosion in cash hunger
The Statistics:
As of close of business: 9/6/2007
Gold Warehouse Stocks: | 7,076,278 | - |
Silver Warehouse Stocks: | 131,347,968 | -23,742 |
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 | 542.35 | 17,436,962 | US$ 11,998m |
London Stock Exchange (LSE) AND Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse ) | Gold Bullion Securities | 88.01 | 2,829,485 | US$ 1,983m |
Australian Stock Exchange (ASX) | Gold Bullion Securities | 12.86 | 413,175 | US$ 290m |
Johannesburg Securities Exchange (JSE) | New Gold Debentures | 16.62 | 534,233 | US$ 367m |
Note: Change in Total Tonnes from yesterday’s data: The NYSE/SGX added another 13.99 tonnes to a new record high total tonnes held after they added 12.92 tonnes to yesterday’s data. The ASX added another 0.07 tonnes.
COMEX Gold Trust (IAU)
Profile as of 9/6/2007 | |
Total Net Assets | $1,056,685,817 | Ounces of Gold
in Trust | 1,519,196.874 |
Shares Outstanding | 15,350,000 | Tonnes of Gold
in Trust | 47.25 |
Note: No change in Total Tonnes from yesterday’s data.
Silver Trust (SLV)
Profile as of 9/6/2007 | |
Total Net Assets | $1,690,587,823 | Ounces of Silver
in Trust | 138,074,659.500 |
Shares Outstanding | 13,900,000 | Tonnes of Silver
in Trust | 4,294.60 |
Note: No change in Total Tonnes from yesterday’s data.
The Stocks:
Meridian Gold’s (MDG) ceased third party discussions with regards to an acquisition, Barrick Gold’s (ABX) addition to the Dow Jones Sustainability Index, Kinross Gold’s (KGC) establishment of the Kinross Professorship in Mining and Sustainability, Mines Management’s (MGN) conference schedule, Silvercorp’s (SVM.TO) warrant listing, and IMA’s (IMR) Application for Leave to Appeal the decision of the Court of Appeal for British Columbia in Minera Aquiline Argentina SA v IMA Exploration Inc. and Inversiones Mineras Argentinas S.A. were among the big stories in the gold and silver mining industry making headlines Friday.
WINNERS
Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 4% on the Week as Dollar Breaks 80