Latest Headlines

Search

-- Posted Thursday, 5 June 2008 | Digg This Article | Source: GoldSeek.com

The Metals:

Gold fell nearly 2% to $864.60 by about 8:30AM EST in New York before it rose to $878.70 by about 10AM and next fell back to about $869, but it then rallied back higher into the close and ended with a loss of just 0.87%.  Silver dropped over 2% to $16.47 in early New York trade York before it rose to find about a 2% gain at $17.17 by 10AM and then fell back near unchanged to about $16.90, but it also rallied back higher into the close and ended with a gain of 1.48%.

Euro gold fell to about €561, platinum gained $7 to $1998.50, and copper remained at about $3.55.

Gold and silver equities rose over 1% about a half hour into trade before they fell back to see a slight loss by late morning, but they then rallied back higher for most of the rest of trade and ended with roughly 3% gains.

The Economy:

The fed’s Lacker had comments today suggesting that the fed’s safety net that bailed out Bear Stearns is not necessarily available for other banks as well.  Without naming names, Lacker noted that the fed had been approached by some banks looking to take out other banks with the fed’s help and the fed had denied them.  "It is uncomfortable, because the scope of lending support is viewed by market participants as having been expanded, and we've not yet aligned our supervisory activities accordingly."

Tomorrow at 8:30AM EST brings May’s jobs data.  Nonfarm Payrolls are expected at -60,000, the Unemployment Rate is expected at 5.1%, Hourly Earnings are expected at 0.2%, and the Average Workweek is expected 33.7.  At 10AM is the Wholesale Inventories report for April expected at 0.4% and at 3PM is Consumer Credit for April expected at $7.0 billion.

The Markets:

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

The U.S. dollar index initially rose after the European Central Bank and Bank of England left interest rates unchanged at 4.0% and 5.0% as most expected, but it then fell rather markedly after ECB President Trichet commented that the ECB is quite worried about inflation and seriously considered a rate hike.  While the hike at this meeting did not materialize, a hike at the ECB’s next meeting looks increasingly likely as the fed continues to keep its rate unchanged.

Eventual weakness in the dollar also sent oil back higher as the recent drop in demand was perceived as factored in after the drop in prices from the record $135.09 a barrel over the past two weeks.  Oil surged in late trade and ended with an over $5 gain, the largest price gain ever, as market participants covered shorts and looked towards persistent supply concerns and possible rebounding demand due to warmer temperatures arriving in the US and inspiring consumers to turn on the A/C.

Treasuries fell as the Dow, Nasdaq, and S&P rose on better than expected retail sales reports and a larger than expected drop in jobless claims.

Among the big names making news in the market today were Vodafone and Verizon, Brown-Forman, Wal-Mart, Costco, Continental Airlines, Smithfield Foods, and Pepsi.

The Commentary:

“Dear CIGAs,

You know I like to keep things as simple as possible when it comes to markets.

If you want to know what is in the cards for gold regardless of the massive Gartman type panning on Financial TV and the so called gold mavens and their dire predictions, you simply look at the USDX but more so the euro. There may be a delay in timing due to gold margin calls and gold price technical damage, but no way on earth are these two currencies, gold and the euro, going to diverge direction.

Gold is a currency. Right here fundamental industry demand takes a far back seat to the direction of the Euro and the USDX.

Forget the US Fed raising rates because if they did the next move would be a 1% cut due to the ramification of that act on structured investment vehicles and default derivatives.

I believe I heard from Trichet today that they will not cut rates as he does jawbone markets from time to time. I take his raising rate statement as a bit of jawboning as well.

In order to join the public gold panning crew you must be a strong dollar bull. You need to ignore the fact that consequences are unavoidable from the present and continued bailout of every large OTC derivative dealer that finds themselves with 1% cash, 8% fixed assets and 91% structured products about to run into more FASB 133 and 159 flack.

Don't forget the impact of the reduction of AAA ratings on default derivative dealers before their shares are below $1.

The dichotomy between the euro and the USDX, now somewhat confusing to gold, will resolve itself in favor of the euro as the euro is the major constituent of USDX.

Here is the key to gold. Forget all else.”- Jim Sinclair, JSMineset.com

“August Gold finished down 8.3 at 875.5, 5.3 off the high and 7.5 up from the low.

July Silver closed up 0.23 at 17.17. This was 0.62 up from the low and 0.03 off the high.

Clearly the gold bears were taken aback by the clear and rather significant reversal in the Dollar from its early new high for the move on Thursday morning. However, seeing ECB dialogue support the Euro and also seeing the IMF hint that the Dollar was "expensive" certainly served to alter the generally entrenched bullish view toward the Dollar. In short, the influence of the currency markets is apparently pretty strong as the gold market could have easily extended the early weakness on the charts in the face of some decidedly bearish private gold price forecasts that were floated on Thursday. In fact, one long held gold bull was reportedly recommending that traders get "short" gold. Therefore, seeing gold finish sloppy on Thursday in the face of a stronger performance in silver and platinum wasn't that surprising.

With the silver market also getting its share of private bearish price predictions during the trade Thursday it was very impressive to see the market generally favor the upside. In fact, with gold favoring negative ground for most of the session, some of the bull contingent had to be extremely happy with the action today. Perhaps the silver market was garnering some support from the reversal in the Dollar and perhaps the silver market was actually lifted by the up beat macro economic developments from the US. In fact, with favorable initial and ongoing claims, positive May retail sales figures and a soaring equity market, perhaps the silver market was being lifted by improved physical demand expectations.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Where's 'strong dollar' in 2% interest rates amid 4% inflation?

No inflation if people don't expect it, Bernanke tells Harvard grads

China drafts new international currency system, Mundell says

The Statistics:

As of close of business: 6/4/2008

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

The Stocks:

Barrick’s (ABX) Pascua Lama project, Almaden’s (AAU) assay results, Fronteer’s (FRG) new resource estimate, Coeur’s (CDE) ownership in the Rochester mine, Excellon’s (EXN.TO) drill results, SilverCrest’s (SVL.V) drill results, and Hochschild’s (HOCM.L) joint venture buy out 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:

Ressources Appalaches : New Developments at the Mont-De-l'Aigle Property - More
- June 05, 2008 | Item | E-mail

Sego Resources Trenching Locates New Zone - More
- June 05, 2008 | Item | E-mail

Silvermet Receives SNC Lavalins Capital and Operating Cost Report for Its Planned Waelz Kiln Plant in Turkey - More
- June 05, 2008 | Item | E-mail

Lundin Mining AGM Results - More
- June 05, 2008 | Item | E-mail

Bonaventure Issues Update on Flagship K9 Uranium Property - More
- June 05, 2008 | Item | E-mail

Etruscan's Youga Gold Mine recovers 7800 ounces in first three months of ramp up - More
- June 05, 2008 | Item | E-mail

Century Mining Announces Up To C$6 Million In Financings - More
- June 05, 2008 | Item | E-mail

Pancontinental Uranium Completes Charley Creek Drill Program of 126 Holes, 4,426 Metres; Chilling Ground Work to Begin in June - More
- June 05, 2008 | Item | E-mail

Barrick still waiting for Pascua Lama agreement - "Barrick Gold Corp (ABX.TO: Quote, Profile, Research) said on Thursday it had no reason to believe Argentina and Chile are close to a tax agreement that could pave the way for development of the massive Pascua Lama gold deposit." More
- June 05, 2008 | Item