-- Posted Tuesday, 18 September 2007 | Digg This Article
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| Close | Gain/Loss |
Gold | $715.00 | +$0.30 |
Silver | $12.77 | +$0.05 |
XAU | 164.78 | +4.06% |
HUI | 378.35 | +3.54% |
GDM | 1182.59 | +3.46% |
JSE Gold | 2631.41 | +0.26% |
USD | 79.22 | -0.50 |
Euro | 139.41 | +0.75 |
Yen | 86.54 | -0.35 |
Oil | $81.51 | +$0.94 |
10-Year | 4.480% | +0.010 |
T-Bond | 112.78125 | -0.21875 |
Dow | 13739.39 | +2.51% |
Nasdaq | 2651.66 | +2.71% |
S&P | 1519.78 | +2.92% |
The Metals:
Gold rose nearly 1% to above $720 by midday in London before it fell back off in early New York trade and saw slight losses at $711.30 a little after 10AM EST, but it then rallied back higher and found a small gain by the close ahead of the fed’s announcement that, at the time of writing, has sent gold noticeably higher in after hours trading. Silver rose near $13.00 in London before it also saw small losses in morning New York trade at as low as $12.65 by a little after 10AM EST, but it also found small gains by the close and has joined gold’s after hours rally with over 1% further gains at the time of writing.
Euro gold rose over €520, platinum gained $5 to $1,300, palladium gained $2 to $329, and copper rose slightly to about $3.44.
Gold and silver equities traded mostly slightly lower ahead of the fed’s announcement, but they then soared higher after the fed slashed rates and closed with roughly 4% gains.
Eurosystem central banks still 100 gold tonnes short of sales quota
Resource Investor
The Economy:
Report | For | Reading | Expected | Previous |
PPI | Aug | -1.4% | -0.3% | 0.6% |
Core PPI | Aug | 0.2% | 0.1% | 0.1% |
Net Foreign Purchases | July | $19.2B | - | $97.3B |
The fed cut the fed funds rate and the discount rate by 50 basis points each to 4.75% and 5.25%, respectively. The majority of expectations were looking for a cut of just 25 basis points, so the action was a bit of a surprise and sent the markets soaring in different directions. The move is an effort to foster price stability, sustain economic growth, and forestall adverse economic effects in the face of recent increased uncertainty. Future rate moves will depend on data and on the economic outlook, meaning that there is no real indication as to what the fed will do next.
Also making economic news today was a surge higher in foreclosures and a measure of homebuilder confidence which matched its lowest reading in history. “The National Association of Home Builders/Wells Fargo index of builder confidence dropped to 20, matching the January 1991 reading as the weakest ever, the Washington-based association said today. Levels lower than 50 mean most respondents view conditions as poor.” “The number of Americans who may lose their homes to foreclosure more than doubled in August from a year earlier as subprime borrowers with adjustable-rate mortgages saw their monthly payments rise, RealtyTrac Inc. said.”
The Bank of England insured the deposits of local banks in a bailout of sorts to help combat the recent problems with the British mortgage lender Northern Rock which recently has faced customer withdrawals of billion of pounds in savings due to liquidity concerns.
Tomorrow at 8:30AM EST brings CPI for August expected at 0.0%, Core CPI expected at 0.2%, Housing Starts for August expected at 1,345,000, and Building Permits expected at 1,350,000.
The Markets:
Charts Courtesy of http://finance.yahoo.com/
Oil rose to a new record high after reports of a bomb blast on a pipeline in Iraq and made new highs above $82 in after hours electronic trading after the fed’s action encouraged traders that demand would remain strong.
The U.S. dollar index found small gains in early trade after Lehman came out with better than expected earnings and eased credit concerns, but it then plummeted to a new 15 year low after the fed’s action sent the euro to a new record high.
Treasuries rose on the short end after the fed’s announcement pushed the yield on the 2-year fell under 4%, but the yield on the long bond (30-year) remained above 4.75% and steepened the yield curve.
The Dow, Nasdaq, and S&P traded modestly higher in anticipation of the fed and then rose to find over 2% gains after they cut rates by a larger than expected 0.5%.
Among the big names making news in the market today were Lehman Brothers, Best Buy, Accredited Home, and the SEC.
The Commentary:
“The 50 Basis point cut by the Federal Reserve affirms their strategy of sacrificing the US Dollar to keep the liquidity in the system alive. The decision is another nail in the coffin for the US Dollar and will further extend the gold price rally. $800+ gold is headed our way in the coming weeks and months. Gold will continue to see a huge influx of investment demand.”- Peter Spina, www.goldforecaster.com
“December Gold finished down 0.1 at 723.7, 4.5 off the high and 3.4 up from the low.
December Silver closed up 0.025 at 12.925. This was 0.095 up from the low and 0.125 off the high.
After managing another new high for the move and reaching the highest level since the May 2006 highs, the gold market fell back sharply prior to the Fed decision. However, seeing the US Fed actually forge a 450 basis point discount rate and seeing a 50 basis point cut in the Fed funds rate did put the gold market back into a bullish posture, but since the Fed suggested that they were attempting to reduce the impact of slowing on the economy, and that they were trying to reduce the ramifications of slowing from the housing sector. Seeing the Dollar weaken in the face of the Fed move probably offset the fact that the Fed didn't hint at any future moves.
The silver market clearly benefited from the Fed decision, the decline in the Dollar and the rise in the equity market. It is also possible that strength in the energy complex provided the silver market with some added support. It was clear from the dialogue being thrown out by a number of Press outlets that the chance of inflation was upgraded with the developments on Tuesday.” - The Hightower Report, Futures Analysis and Forecasting
GATA Posts:
Ted Butler: Different patterns in silver traders report
Fed gets aggressive, cuts rate by half point
Britain considers copying U.S. and German deposit insurance
More banks may need bailouts as fear grows in Britain
Exiting dollar, Iran puts 70% of reserves in other currencies and gold
Financial Times: Spain is finished with gold sales
All British banks now may expect government rescue
Venezuela's oil accounts to dump the dollar
Panic spreading, Britain guarantees all Northern Rock deposits
Ambrose Evans-Pritchard: Greenspan was more rock star than feared sage
Having opposed regulating them, Greenspan blames derivatives
The Statistics:
As of close of business: 9/17/2007
Gold Warehouse Stocks: | 7,077,126 | +72,941 |
Silver Warehouse Stocks: | 132,470,614 | -1,254,478 |
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 | 567.88 | 18,257,779 | US$ 13,125m |
London Stock Exchange (LSE) AND Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse ) | Gold Bullion Securities | 90.13 | 2,897,785 | US$ 2,094m |
Australian Stock Exchange (ASX) | Gold Bullion Securities | 13.75 | 441,608 | US$ 319m |
Johannesburg Securities Exchange (JSE) | New Gold Debentures | 17.35 | 557,912 | US$ 399m |
COMEX Gold Trust (IAU)
Profile as of 9/17/2007 | |
Total Net Assets | $1,108,494,077 | Ounces of Gold
in Trust | 1,548,885.810 |
Shares Outstanding | 15,650,000 | Tonnes of Gold
in Trust | 48.18 |
Silver Trust (SLV)
Profile as of 9/17/2007 | |
Total Net Assets | $1,750,466,982 | Ounces of Silver
in Trust | 139,067,911.100 |
Shares Outstanding | 14,000,000 | Tonnes of Silver
in Trust | 4,325.50 |
The Stocks:
International Tower Hill’s (THM) drill results, Northgate’s (NXG) drill results and reaction to a panel recommendation to not approve the Kemess North project, Sterling Mining’s (SRLM.OB) appointed QP, MAG Silver’s (MVG) property acquisition and drill program, Avino’s (ASM.V) drill results, Silver Standard’s (SSRI) and Esperanza’s (EPZ.V) drill results, Hochschild Mining’s (HOC.L) second half output, and Endeavour’s (EXK) review of operations and revised 2007 forecast were among the big stories in the gold and silver mining industry making headlines today.
WINNERS
1. Lihir | LIHR +6.77% $31.23 |
2. Mines MGMT | MGN +6.51% $3.65 |
3. Freeport | FCX+6.42% $103.30 |
LOSERS
1. Endeavour | EXK-12.23% $3.30 |
2. Northgate | NXG -9.49% $2.86 |
3. Crystallex | KRY -2.15% $2.73 |
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:
Lounor acquires a gold property - More
- September 18, 2007 | Item | E-mail
Latin American Minerals Mobilizes for a 5000m Diamond Drilling Program at its Paso Yobai Gold Project in Paraguay - More
- September 18, 2007 | Item | E-mail
Tyhee announces diamond drilling campaign underway at its Goodwin Lake Property - More
- September 18, 2007 | Item | E-mail
CORRECTION FROM SOURCE: Paragon Intersects Massive Sulphides at South Tally Pond VMS Project - More
- September 18, 2007 | Item | E-mail
Olympus Drill Results Continue to Show High-Grade Gold Mineralization at Phuoc Son - More
- September 18, 2007 | Item | E-mail
Sterling Mining Appoints QP for the Sunshine Mine - "Sterling Mining Company (OTC BB:SRLM.OB - News)(Frankfurt:SMX.F - News) today reported that it has entered into a continuing agreement with Behre Dolbear & Company Limited to provide on-going services relating to the Sunshine Mine. Working primarily from the Toronto office, Behre Dolbear will provide advisory services, including regulatory compliance, and will report to Sterling's President and Sterling's Reserve and Resource Committee." More
- September 18, 2007 | Item | E-mail
VVC Exploration - Default Status Update Report - More
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Gold Seeker Closing Report: Gold and Silver Gain Slightly Before Fed Cuts Rates 0.5%; Gain Over 1% More After