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Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Almost 3% on the Week
By: Chris Mullen, Gold-Seeker.com


-- Posted Friday, 21 October 2011 | | Disqus

 

Close

Gain/Loss

On Week

Gold

$1635.60

+$24.50

-2.72%

Silver

$31.17

+$0.84

-2.99%

XAU

184.87

+1.88%

-6.52%

HUI

517.68

+1.73%

-6.88%

GDM

1495.35

+1.66%

-6.87%

JSE Gold

2794.75

+18.06

+1.76%

USD

76.28

-0.64

-0.42%

Euro

138.96

+1.20

+0.12%

Yen

131.38

+1.18

+1.44%

Oil

$87.40

+$1.33

+0.69%

10-Year

2.203%

+0.023

-1.30%

Bond

138.50

-0.50

+0.07%

Dow

11808.79

+2.31%

+1.41%

Nasdaq

2637.46

+1.49%

-1.14%

S&P

1238.25

+1.88%

+1.12%

 
 

 

The Metals:

 

Gold rose to as high as $1648.28 by about 9:30AM EST before it fell back off a bit into the close, but it still ended with a gain of 1.52%.  Silver climbed to as high as $31.493 and ended with a gain of 2.77%.

 

Euro gold rose to about €1181, platinum gained $18 to $1501, and copper gained 16 cents to about $3.22.

 

Gold and silver equities rose about 1.5% at the open and remained near that level for the rest of the day.

 

The Economy:

 

Fed’s Yellen: QE3 May Be Warranted for Stimulus  Bloomberg

Unemployment rates fall in half of US states  Yahoo

 

All of this week’s economic reports:

 

Leading Indicators - September

0.2% v. 0.3%

 

Existing Home Sales - September

4.91M v. 5.06M

 

Philadelphia Fed - October

8.7 v. -17.5

 

Initial Claims - 10/15

403K v. 409K

 

Building Permits - September

594K v. 625K

 

Housing Starts - September

658K v. 572K

 

CPI - September

0.3% v. 0.4%

 

Core CPI - September

0.1% v. 0.2%

 

MBA Mortgage Index - 10/15

-14.9% v. 1.3%

 

NAHB Housing Market Index - October

18 v. 14

 

Net Long-Term TIC Flows - August

$57.9B v. $9.1B

 

PPI - September

0.8% v. 0.0%

 

Core PPI - September

0.2% v. 0.1%

 

Industrial Production - September

0.2% v. 0.0%

 

Capacity Utilization - September

77.4% v. 77.3%

 

Empire Manufacturing - October

-8.48 v. -8.82

 

Next week’s economic highlights include the Case-Shiller 20-city Index, Consumer Confidence, and the FHFA Housing Price Index on Tuesday, Durable Goods Orders and New Home Sales on Wednesday, Initial Jobless Claims, GDP, and Pending Home Sales on Thursday, and Personal Income and Spending, Core PCE Prices, the Employment Cost Index, and Michigan Sentiment on Friday.

 

The Markets:

 

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

 

Oil rose as the U.S. dollar index and treasuries fell on hopes for a successful Euro Summit this weekend.

 

“The finance chiefs from the euro's 17 countries hunkered down Friday to overcome differences over how to strengthen a bailout fund, which is key to preventing the currency union's debt troubles from spinning out of control.”

 

“The U.S. dollar slumped to a record low against the yen on Friday in its biggest one-day decline in nearly two months, bringing back into focus the threat of official intervention to weaken the Japanese currency.”

 

The Dow, Nasdaq, and S&P rose about 2% on strong earnings reports.

 

Among the big names making news in the market Friday were Barnes & Noble, Wal-Mart, News Corp, AIG, Verizon, McDonald’s, Groupon, Honeywell, Goldman Sachs, GE, Abbott, and MGIC.

 

The Commentary:

 

Take a quick look at the chart below to get a sense of what is taking place as a result of the cessation of the Fed's QE2 program and the inception of its "Operation Twist".

Recall that Operation Twist is nothing more than a rolling over of maturing shorter term Treasury debt into longer term Treasury debt in a deliberate attempt by the Federal Reserve to manipulate the rate of interest on the longer end of the yield curve.

While I personally find the idea that a small group of individuals presumes to be able to determine the exact rate of interest to fine tune an economy and make in move in the direction of their choice to be repugnant, it is what it currently is. I believe this constant interference into the interest rate sector is causing more complications than it is supposedly curing. It was the lowering of interest rates down to 45 year old levels some while back that paved the way for all this malinvestment and contributed to the excess that we are all too sadly aware of by now.

The notion that the same people who were partly responsible for creating this mess are the saviors to rescue us from it is laughable for its stupidity.

That being said, the Street loves nothing more than a Fed-induced liquidity party. As you can see, during both episodes of Quantitative Easing, I and II, the S&P 500, which is an excellent proxy for the US stock markets as a whole, moved higher, nearly reaching levels that it had climbed to just prior to the bust of Lehman Brothers in mid-2008, which ushered in the credit crisis.

 

As long as the Fed was expanding its balance sheet, there were "Blue Skies - nothing but Blue Skies, do I see" ahead. When the FOMC pulled the plug on QE2 in June of this year, down went the S&P, and it has not yet been able to recover from that cold turkey withdrawal of Billions in liquidity.

What the Fed is now doing with its Operation Twist is not expanding its Balance Sheet but is rather rolling over some of the maturing shorter term debt into longer term Treasuries. The effect has been to basically keep the Treasury portion of their Balance Sheet from not shrinking but also from not expanding. As their Balance Sheet flatlines, the broader stock markets are buckling under the weight of the rotten economy and global slowdown that is now taking hold.

Given the current conditions, it is difficult to gauge what might be a driving factor that would take the S&P anywhere near back to its recent peak just below 1400. Without another injection boost of liquidity, the best that the market could hope for is a period of sideways movement.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

The Statistics:

Activity from: 10/20/2011

Gold Warehouse Stocks:

11,248,514

+1,700

Silver Warehouse Stocks:

106,345,575

+333,707

 

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 

Product name

Total Tonnes

Total Ounces

Total Value

New York Stock Exchange Arca (NYSE Arca) AND Singapore Exchange (SGX) AND Tokyo Stock Exchange (TSE) AND Hong Kong Stock Exchange (HKEx)

SPDR® Gold Shares

1227.511

39,465,716

US$64,806m

London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra)

Gold Bullion Securities

115.35

3,708,632

US$6,091m

London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) AND NYSE Euronext Amsterdam

ETFS Physical Gold

126.23

4,058,350

US$6,666m

Australian Stock Exchange (ASX)

Gold Bullion Securities

14.21

473,419

US$750m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

42.84

1,377,389

US$2,317m

NASDAQ Dubai

Dubai Gold Securities

0.154

4,947

US$8m

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 164.21: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 9,874.05: -19.68 change from yesterday’s data.

 

The Miners:

WINNERS

1.  Comstock

LODE+8.25% $2.10

2.  Extorre

XG +8.16% $7.95

3.  Revett

RVM +6.41% $3.65

 

LOSERS

1.  Gold Reserve

GRZ -15.83% $2.02

2.  Banro

BAA -2.03% $3.87

3.  Exeter

XRA -0.85% $3.50

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:

Wedge Securityholders Approve the Arrangement with Undur Tolgoi Minerals Inc. - More
- October 21, 2011 | Item | ShareThis


Dia Bras Identifies Gold-Anomalous Ridges at the La Verde Gold Prospect at Its Batopilas Property - More
- October 21, 2011 | Item | ShareThis


Augusta Announces "Notice of Availability" for Rosemont Copper DEIS Issued by USFS - More
- October 21, 2011 | Item | ShareThis


Guyana Frontier Reports Assignment of Guyanese Properties - More
- October 21, 2011 | Item | ShareThis


Aguila Grants Stock Options - More
- October 21, 2011 | Item | ShareThis


Tajiri Options 51% of Kaburi Gold Project from Arrowhead Gold Corp. in Guyana, SA - More
- October 21, 2011 | Item | ShareThis


Caldera Announces Modification to Private Placement - More
- October 21, 2011 | Item | ShareThis


Rio Alto Closes US$25 Million Financing for Mine Expansion - More
- October 21, 2011 | Item | ShareThis


Arrowhead Options 51% of Kaburi Gold Project to Tajiri Resources Corp. - More
- October 21, 2011 | Item | ShareThis


Cerro Resources: Mt Philp 43-101 Technical Report - More
- October 21, 2011 | Item | ShareThis


Dia Bras Reports Illegal Demonstration at Yauricocha - More
- October 21, 2011 | Item | ShareThis


Golden Phoenix Appoints Capital Market Expert John Di Girolamo to Board of Directors - More
- October 21, 2011 | Item | ShareThis


McDuffie County Board of Commissioners Deny Conditional Use Permit Request - More
- October 21, 2011 | Item | ShareThis


Rye Patch Acquires Land at the Lincoln Hill Project - More
- October 21, 2011 | Item | ShareThis


Amerigo Announces Q3-2011 Production Results - More
- October 21, 2011 | Item | ShareThis


Paladin Energy Files Notice of Meeting & Proxy Form - More
- October 21, 2011 | Item | ShareThis


Mariana Resources Ltd. Issues Shares on Exercise of Options - More
- October 21, 2011 | Item | ShareThis


Terraco Completes Geologic Mapping/Geophysical Survey Interpretation at Its Moonlight Property (Nevada) - More
- October 21, 2011 | Item | ShareThis


Montoro to Advance Its Claim With the B.C. Government - More
- October 21, 2011 | Item | ShareThis


Northern Vertex Reports Significant NI 43-101 Resource of 590,400 Ounces of Gold Equivalent Resources at the Moss Gold-Silver Project - More
- October 21, 2011 | Item | ShareThis


Silver Sun Completes Bulk Sampling - More
- October 21, 2011 | Item | ShareThis


3 killed near Freeport gold mine - "U.S. mining giant Freeport-McMoRan Copper & Gold Inc. said unknown gunmen killed three people Friday near its mine in eastern Indonesia, where thousands of workers are on strike to demand higher pay." More
- October 21, 2011 | Item | ShareThis


 

- Chris Mullen, Gold Seeker Report

 

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Additional Resources for today’s Gold Seeker Report can be found:

© Gold Seeker 2011

Note: This article may be reproduced provided the article, in full, is used and mention to Gold-Seeker.com is given.

 

 

Disclosure: The owner, editor, writer and publisher and their associates are not responsible for errors or omissions.  The author of this report is not a registered financial advisor.  Readers should not view this material as offering investment related advice. Gold-Seeker.com has taken precautions to ensure accuracy of information provided. Information collected and presented are from what is perceived as reliable sources, but since the information source(s) are beyond Gold-Seeker.com’s control, no representation or guarantee is made that it is complete or accurate.  The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action.  Past results are not necessarily indicative of future results.  Any statements non-factual in nature constitute only current opinions, which are subject to change.  Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities & therefore information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein.  Investors are advised to obtain the advice of a qualified financial & investment advisor before entering any financial transaction.


-- Posted Friday, 21 October 2011 | Digg This Article | Source: GoldSeek.com

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