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-- Posted Friday, 2 May 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold briefly spiked down to $845.70 after the jobs report gave the dollar a lift, but the yellow metal quickly recovered to trade modestly higher for the rest of trade and ended near its high of $859.20 with a gain of 0.84%.  Silver momentarily dropped to $16.04 before it made a high of $16.502 and closed with a gain of 1.6%.

Euro gold rose to about €556, platinum gained $30 to $1893, and copper gained over 13 cents to about $3.86.

Gold and silver equities rose over 2% by late morning before they cut into their gains in afternoon trade, but they still ended with over 1% gains.

The Economy:

The BLS net birth/death adjustment added 267,000 payrolls to April’s data.

Also making economic news today was a huge increase in the fed’s Term Auction Facility in an effort to make banks lend at lower rates and try to solve the credit crisis or perhaps prepare for more turmoil to come.  More details here.

All of this week’s economic reports:

Next week’s economic highlights include ISM Services on Monday, Productivity, Pending Home Sales, and Consumer Credit on Wednesday, Initial Jobless Claims and Wholesale Inventories on Thursday, and the Trade Balance on Friday.

The Markets:

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

Oil gained nearly $4 despite a higher dollar as supply concerns reignited on news that Turkey bombed Kurdish bases in Iraq.

The U.S. dollar index rose and treasuries fell as jobs data was not as horrible as expected and made it more likely the fed will not cut interest rates any further.

The Dow, Nasdaq, and S&P started off nicely higher on the jobs report, but all three indices fell off to end mixed on increasing skepticism over the validity of the jobs report.

Among the big names making news in the market Friday were Lexus, Mercedes, Viacom, Linens ‘n Things, Bank of America, and Chevron.

The Commentary:

“The so-called bull market in the US dollar is pitiful. It is hard to see how the media now accepts a strong dollar when in fact it does not exist.

The US dollar cannot be viewed on minute or daily charts, but rather on weekly as trends in currencies, once in place, rarely change on a dime.

Gold is simply a mirror image of the dollar. Breaking the mirror does not alter the form of what was being reflected. The dollar is still out there and is a long term bear.

Talking heads point to a head and shoulders on the gold price, failing to recognize that the gold price always looks terminally UGLY when it turns up. Gold has to be traded incorrectly in order to be correct. That is the nature of this beast along with volatility.”- Jim Sinclair, JSMineset.com

“For sure the effectiveness of The Gold Cartel and PPT has been dazzling, and has Planet Wall Street cheering, even if on the QT. The problem is all they have done is increase the Moral Hazard issue even further. Yes, they will get applause now. But, what happens down the road when this blatant market intervention leads another Bear Stearns fiasco out of nowhere … not one, but 25 of them, due to the reckless disregard of the free market system in the US, one in which excess and mistaken investment is allowed to be purged from the system?”- From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com

“June Gold finished up 7.1 at 858, 2.5 off the high and 11.5 up from the low.

May Silver closed up 0.26 at 16.381. This was equal to the low and equal to the high.

While it might take a little longer to transition the bull camp in the gold market back to a classic inflation posture, from the recent flight to quality argument, it is difficult to suggest that a recovery in the US economy will be a long term bearish development for the gold market. Certainly a host of buyers over the last year have banked on a persistent decline in the Dollar and in turn piled into gold. Certainly seeing fears of a historic financial debacle in the US added to the bull camp and therefore seeing the threat of a debacle in the US decline is naturally cause for a wave of long liquidation in gold. However, as was seen in the early action Friday morning, gold can rise in the face of residual Dollar strength and gold can also re-embrace the ongoing potentially historic inflationary threat that could unfold in the event that the US economy gets back on track. In short, the gold market appears to be facing a tug of war between an exodus of flight to quality longs and a possible influx of fresh buyers off a rekindling of classical inflation prospects.

The silver market was cheered by the initial attempt to rally in gold, but the market was also lifted by the sharp recovery bounce in the copper market. It goes without saying that strength in the energy complex contributed to the recovery bounce in silver. However, a number of silver traders expressed concern that upcoming strength in the US Dollar might make it difficult for physical or industrially demand driven commodities to recover in the near term.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

James Turk: A four-month review

The Statistics:

As of close of business: 5/01/2008

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 Note: No change in Total Tonnes from yesterday’s data.

COMEX Gold Trust (IAU)

 Note: No change in Total Tonnes from yesterday’s data.

Silver Trust (SLV)