-- Posted 12 December, 2005 | | Source: SilverSeek.com

Market Analysis from GoldSeek.com, SilverSeek.com & CapitalUpdates.com:

The Treasury Budget for November came in larger than the expected -$80.0 billion at -$83.1 billion, the largest deficit ever for November.  “For the first two months of the 2006 budget year, which began Oct. 1, the deficit totals $130.3 billion, 13.1 percent higher than the $115.2 billion in red ink run up during the same period last year.”

Tomorrow at 8:30AM EST brings Retail Sales for November expected at 0.4%.  Excluding auto sales, Retail Sales are expected to be unchanged.  At 10AM are Business Inventories for October expected at 0.5% and at 2:15PM is the FOMC policy announcement.  Another ¼ point interest rate hike to 4.25% is almost a given, though speculation is rampant as to whether the fed will change the language in their statement or not.  All eyes will be on the fed to perhaps drop their “measured” pace stance and indicate a possible pause in interest rate hikes soon, but it is also certainly plausible that the fed could change nothing in their statement.

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Gold climbed steadily upward in Asia and traded at over $540 at one point before falling off slightly in London and then dropping further in late New York trade.  Gold ended near its lows of the session, but it still closed with a gain to make a new 24 and ½ year high.  Silver also climbed steadily higher in Asia and traded at over $9.20 in London before dropping off dramatically in late New York trade.  Silver ended near its lows with a 2.45% loss to fall from 18 year highs.

Gold and silver equities traded over 3% higher Monday morning before falling off in afternoon trade as gold and silver fell from their highs.  All three indices ended near unchanged on the day.

Last night in overseas trading, "the Tokyo Commodity Exchange (TOCOM) said on Monday it would impose an extraordinary trading margin on gold futures from Wednesday to check volatility in the market, a decision that initially knocked gold from its highs." - Reuters

More Precious Metals Analysis:

“February gold traded higher Monday as speculators and funds continue to aggressively buy all precious metals, but profit taking trimmed gains with gold closing sharply off the highs of the day. Broad based profit taking in the Dollar and a spike higher in energy prices with Feb crude up nearly $2, helped to spur the speculative fervor. The Japanese were again major buyers of gold in Monday's Asian trade which gave the metal its initial early price boost. Strong physical demand from Russia, Asia and the Middle East, as well as, speculation of Central Bank buying has contributed to gold's stellar rise this year.” - The Hightower Report, Futures Analysis and Forecasting

The U.S. dollar index fell off markedly on speculation that the fed may indicate a pause in interest rate hikes tomorrow.

Oil climbed nearly $2 to a 5 week high on cold weather and rumors that OPEC may consider a production cut soon.

Treasuries traded near unchanged as traders wait for the fed’s statement tomorrow.

The Dow, Nasdaq, and S&P traded higher Monday morning, but all three indices fell off in afternoon trade on higher oil and fed uncertainty.  A small rally into the close left the indices mixed and near unchanged.

Among the big names making news in the market today were Tommy Hilfiger, Dunkin' Brands, Merck, Burlington Resources and Conoco, Paramount and DreamWorks, and Delta.

Gold & Silver Stock News Update from GoldReview.com:

Nevsun’s Bisha scoping study, Minera Andes’ and Mauricio Hochschild’s plans to build a gold mine in Argentina, Cumberland’s improvements to economics at Meadowbank, Great Basin’s intersected bonanza grades at Hollister, IAMGOLD’s listing on the NYSE, Miramar’s expansion of the Naartok deposit at Hope Bay, Gold Fields’ $44 million offer for Peru’s Cerro Corona and acquired additional 2.3% of the shares of Bolivar Gold Corp., Sterling Mining’s underground drill program at their Sunshine Mine, Silver Standard’s doubled silver resources at Pitarrilla, and Hecla Mining’s gold assays at Hollister were among the big stories in the gold and silver mining industry making headlines today.

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- Written by Chris Mullen

Winners & Losers tracks NYSE and AMEX listed stocks that trade over $1.

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