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-- Posted Wednesday, 4 June 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold fell over $5 to $875.80 by late trade in Asia before it saw an over $3 gain at $885.40 by early trade in New York, but it then fell back off into the close and ended with a minor loss of 0.18%.  Silver rose to find a slight gain at $16.81 by about 9AM EST in New York before it quickly fell over 1% to a new session low of $16.57 by about 10AM EST, but it then rallied back higher into the close and ended near its session high of $16.905 with a gain of 0.3%.

Euro gold fell to about €570, platinum lost $0.50 to $1991.50, and copper fell over 3 cents to about $3.55.

Gold and silver equities fell almost 1.5% by late morning before they rallied back near unchanged by about 2PM EST, but they then fell back off into the close and ended with nearly 2% losses.

The Economy:

Bernanke spoke at Harvard late in the day and said that inflation is significantly higher than the fed wants, but he also said that the fed sees little indication today’s situation is like the “1970s-style wage-price spiral, in which wages and prices chased each other ever upward.”  Indeed, for it seems that it is only prices that are rising, and at much higher rates than the statistics the fed supposedly watches to monitor them say they are!

Tomorrow at 8:30AM EST is the Initial Jobless Claims report for 5/31 expected at 372,000, but most are already looking ahead to Friday’s Nonfarm Payrolls report.

The Markets:

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

Oil fell $2 despite another large and unexpected drop in crude inventories as the Energy Department said gasoline demand dropped sharply last week.  Crude inventories fell 4.8 million barrels, gasoline inventories built 2.9 million barrels, distillate inventories built 2.3 million barrels, and refinery utilization rose 1.8% to 89.7%.

The U.S. dollar index rose slightly and treasuries fell as interest rates rose on better than expected economic reports, but bond and currency markets were relatively quiet ahead of tomorrow’s European Central Bank and Bank of England meetings that are expected to leave interest rates unchanged at 4.0% and 5.0% respectively.

The Dow, Nasdaq, and S&P rose modestly for most of trade on decent economic data and lower oil prices, but the Dow and S&P then turned lower in the last two hours of trade after Moody’s raised more credit market worries when it placed bond insurers Ambac and MBIA on review for possible downgrades.

Among the big names making news in the market today were Verizon and Alltel, American Express, George Soros, Lehman Brothers, J.M. Smucker and Folgers, United, and Harry Winston.

The Commentary:

“Before the opening of US securities trading, Merrill released the following:

"Lehman over shot its market value point yesterday," according to Merrill whose debt (Merrill) was downgraded yesterday, today (Merrill) upgraded the investment quality of Lehman's shares.”

There was not much mention of the 91% of Lehman's assets being securities, with 1% cash position.

Securities are a buzz word that now includes OTC derivative structured products.

What happens if Lehman needs to revalue the mark to model of their derivative products by say 10%?

Maybe Lehman goes to the Begging Bowl loan window of the Fed, putting up the junk as collateral.

Do you think Lehman pays back that loan in 28 days? Be real, all those Begging Bowl loans are perma-roll over.

Remember when the first few people lined up at the Fed Begging Bowl loan window? The Spin was that it was to show that there is no Stigma to that borrowing and they really did not need the money.

What is true today?”- Jim Sinclair, JSMineset.com

“August Gold finished down 1.7 at 883.8, 6.2 off the high and 1.3 up from the low.

July Silver closed up 0.105 at 16.94. This was 0.24 up from the low and equal to the high.

With the Dollar marginally higher, oil prices weak and US equity prices at times on Wednesday showing strength, it wasn't a very supportive environment for gold prices. With US Productivity coming in with solid readings and some of the pressure from high energy prices being mitigated by the slide in oil prices it isn't a shock to see flight to quality instruments like gold fall out of favor. In fact, about the only fresh flow of classic fundamental information in gold is centering on the prospect of deteriorating investment demand and that in conjunction with mostly bearish outside market forces seems to have given the bear camp the edge.

The silver market seemed to exhibit a weaker morning trade than the gold market. However, in the end the silver market actually managed to firm its trade late in the session and in turn outperformed the gold market on the day. Certainly seeing a slightly improvement in classic macro economic views, provided silver and platinum prices a lift, but with gold and copper prices finishing sluggish and weak it was clear that the improvement in economic expectations wasn't a universal sentiment in the metals markets.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Bix Weir: U.S. silver eagles illegally rationed

Martin Murenbeeld: Some bullish thoughts about gold

The Statistics:

As of close of business: 6/3/2008

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)

Note: Change in Total Tonnes from yesterday’s data: 2.56 tonnes were removed from the trust.

The Stocks:

Newmont’s (NEM) senior VP appointment, Seabridge’s (SA) drill program, Centerra’s (CG.TO) mine share and taxes in Kyrgyzstan, Kinross Gold’s (KGC) agreement with Brett Resources on the Hammond Reef Project, Eldorado’s (EGO) offer for Frontier, Sterling’s (SRLM.OB) litigation and company update, and Aura’s (AUU.V) director appointment 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:

Newmont Appoints Alan R. Blank as Senior Vice President of Legal and External Affairs - "During my tenure as an executive at PacifiCorp, I had the privilege of working closely with Alan on numerous legal, business and strategic initiatives," said Newmont President and Chief Executive Officer, Richard O'Brien. "Over the years I developed a strong appreciation for his ability to provide sound counsel and decisive leadership on a number of complex legal and business matters. His proven critical-thinking, people skills, judgment and high ethical standards will serve Newmont well." More
- June 04, 2008 | Item | E-mail

Geoinformatics Identifies Extensive Silver and Copper-Molybdenum Anomalies at its La Noria Project in Mexico - More
- June 04, 2008 | Item | E-mail

Metals Creek Resources Hires First Canadian Capital Corp for Investor Relations - More
- June 04, 2008 | Item | E-mail

Sterling Mining Issues Update - "Sterling Mining Company (Toronto:SMQ.TO - News)(OTC BB:SRLM.OB - News)(Frankfurt:SMX.F - News) is pleased to issue an update regarding recent developments at the Company following on the recent appointment of Ken Berscht as interim President/CEO of the Company. The Board of Directors met on the weekend with senior management and Sterling's professional advisors to review current status and strategic issues." More
- June 04, 2008 | Item | E-mail

Yorbeau Raises $2,916,353 Pursuant to its Rights Offering - More
- June 04, 2008 | Item | E-mail

North American Gem Brings Mr. Alan Johnson, Distinguished Coal Geologist, to Board of Advisors - More
- June 04, 2008 | Item | E-mail

Melkior Obtains Private Placement for Mcfauld's Area - More
- June 04, 2008 | Item | E-mail

Cameco and Kazakhstan push ahead on fuel plant - More
- June 04, 2008 | Item | E-mail