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-- Posted Wednesday, 30 April 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold fell to $861.95 by midday in London before it rallied to find a small gain at $876.00 by about 10AM EST in New York, but it then fell back off into the close and ended with a loss of 1.36%.  Silver fell to $16.359 and rose to $16.78 before it also fell back off into the close and ended with a loss of 0.36%.  Both metals have risen in after hours access trade in reaction to the fed’s statement and have more than erased the day’s losses at the time of writing.

Euro gold fell to about €554, platinum lost $6.50 to $1915.50, and copper gained a few cents to about $3.93.

Gold and silver equities rose over 2% at the open before they fell back near unchanged ahead of the fed’s statement, but they quickly rose to new highs after the statement and closed with about 3% gains.

The Economy:

The fed cut both the fed funds rate and the discount rate by 25 basis points to 2% and 2.25% as most expected.  Their statement was essentially the same as last time and did not necessarily imply a halt to their recent campaign of rate cuts at their next meeting as most were expecting they would.  There were two dissenters in Fisher and Plosser who preferred no change in the fed funds rate.  They removed the phrase “downside risks to growth remain,” but said economic activity currently remains weak.  They also noted that some indicators of inflation have risen and that uncertainty about the inflation outlook remains high, but they see inflation moderating and will monitor it closely.  In closing the fed said they will act as needed to promote growth and price stability.  This pretty much leaves the door wide open for next meeting’s policy.  Economic data and other market developments over the coming weeks will likely make significant impacts on the markets as traders judge how it may impact the fed’s next decision on June 25^th.

The Markets:

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

Oil fell after crude supplies built a larger than expected 3.8 million barrels, gasoline inventories fell 1.5 million barrels, distillates built 1.1 million barrels, and refinery utilization fell 0.2% to 85.4%.

The U.S. dollar index plummeted and treasuries soared after the market digested the fed’s statement that did not turn as hawkish as many had expected it to.  The FOMC still expects inflation to moderate on its own and shows little desire to combat it.

The Dow, Nasdaq, and S&P traded nicely higher before the fed’s statement and initially rose to new highs after, but they soon erased their hefty gains and ended modestly lower on uncertainty about market developments and fed actions heading forward.

Among the big names making news in the market today were Exxon, GM, Kraft, Kellogg, Colgate, P&G, and Citigroup.

The Commentary:

“June Gold finished down 11.7 at 865.1, 12.4 off the high and 0.4 up from the low.

May Silver closed down 0.038 at 16.502. This was equal to the low and 0.158 off the high.

Gold managed to recover from an early washout ahead of the scheduled US numbers, but sinking oil prices seemed to prevent the gold market from getting out from under the early bearish tilt until late in the trading session. While the gold market showed signs of increasing its attention of the energy complex action at the expense of the action in the Dollar, it should be noted that the US Dollar forged an extremely tight trading range ahead of the FOMC meeting decision and then weakened very late in the session. The FOMC decided to cut interest rates again by 25 basis points and since that was largely expected, the trade seemed to be more interested in the statement than the rate reduction. Since the initial reaction to the Fed was for a slight decline in the Dollar, it wasn't surprising to see the gold market manage a slight bounce in the wake of the latest Fed news.

For most of the trading session the silver market outperformed the gold market. In fact, the silver market seemed to favor a track with copper than to the gold market and that might suggest that silver is indeed attempting to break out of its recent financial sector track and return to a classic physical commodity market track. With the Fed actually cutting interest rates another 25 basis points, the silver and copper markets mostly maintaining positive ground and the stock market adding to early gains after seeing the Fed's move, it certainly seemed as if the industrial metals markets were left in a better overall position than the patently financial issue focused gold market.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Ted Butler: An interesting week

The Statistics:

As of close of business: 4/29/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: StreetTRACKS removed 10.74 tonnes.

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:

Paramount’s (PZG) drill results and resumption of trading, Central Sun’s (SMC) exploration update, Crystallex’s (KRY) update on Las Cristinas, Vista Gold’s (VGZ) permit status, Exeter’s (XRA) drill results, Minco’s (MGH) exploration program, Lihir’s (LIHR) first quarter production report, Gold Fields’ (GFI) additional miner death, Silver Wheaton’s (SLW) acquired silver production, U.S. Silver’s (USA.V) operations update and financial results, and Silverstone’s (SST.V) first quarter silver sales were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

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:

Venezuela denies Crystallex permit, stock slumps - "Gold miner Crystallex International Corp (KRY.TO: Quote, Profile, Research) said on Wednesday that Venezuela has denied an exploration permit at its Las Cristinas mine, reigniting fears that the project could be delayed further or nationalized.

Shares of the company plunged as much as 60 percent to their lowest level in years, after the company said denial of the permit runs counter to approvals needed to get the long-awaited mine underway." More
- April 30, 2008 | Item | E-mail

  BF Minerals Ltd. Announces Acquisition of Zambian Mineral Assets and Debt Conversions - More
- April 30, 2008 | Item | E-mail

Global Copper Reports 9 Additional Drill Holes and Acquires Surface Right and Additional Mineral Rights at Relincho - More
- April 30, 2008 | Item | E-mail

Los Andes Announces Issuance of Stock Options - More
- April 30, 2008 | Item | E-mail

Altius's NLRC Announces Positive Decision on Federal Environmental Assessment - More
- April 30, 2008 | Item | E-mail

PolyMet Reports Fiscal 2008 Fourth Quarter and Full Year Results - More
- April 30, 2008 | Item