-- Posted 17 May, 2006 | | Source: SilverSeek.com

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

Today’s Economic Data:

CPI came in higher than expected, both at the wholesale and the core level.  This raised inflation fears and increased chances the fed will continue to raise interest rates.

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 5/13 expected at 318,000.  At 10AM are Leading Indicators for April expected at 0.1% and at noon is the Philadelphia Fed for May expected at 12.5.

Gold rose above $700 in Asia and spent most of trade in London in the $710-$715 range, but it then fell off throughout morning trade in New York and dropped to as low as $685.30 before it rebounded into the close and ended just slightly higher on the day.  Silver climbed to over $14 in London before it dropped to under $13 in New York.  It also rebounded into the close and ended off its lows, but it still fell 2.5% on the day.

Euro gold remained near €540, platinum gained $18 to $1,310 to match its all-time closing high set last Friday, palladium gained $1 to $374, and copper felly nearly 18 cents to just under $3.60.

Gold and silver equities rose about 3% in early trade, but they then fell off for the rest of trade and ended near their lows with about 3% losses.

From Peter Grandich of the Grandich Letter:

“In my commentary on Monday, I said “…we will need to work our way lower after the natural bounce we should see into tomorrow and Wednesday…”  Sure enough, we bounced into the opening of Comex trading today but have since given back all the gains and then some. I continue to believe last Thursday afternoon marked at least a short to intermediate top for gold, silver and copper. The fact that oil is starting to look like $75 is a major top as well, and the inability for the metals to rally despite a significant drop in the equity markets, only gives more credence to my alert last Thursday afternoon.

While gold may correct up to 20% from its highs, I remain 100% bullish for the long-term. It’s hard to accept by some (I can tell by the usual hate emails after sending out my alert Thursday) but a correction now is the best thing for long-term bulls. As noted in last Thursday’s alert, I had the most severe overbought signal for gold, silver and copper since before the 1987 stock market crash. It’s not likely going to fully correct in just a few trading sessions.

I urge long-term gold bulls to realize that if we’re to get to a four-digit gold price, we’re going to need one major economic event – the U.S. Dollar Index breaking below (and staying there) 80. I believe that’s only a question of when, not if, because the only party that doesn’t know the U.S. Dollar is dead is the U.S. Dollar.”

From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com:

“Seems to me gold is now ready for an assault on $800, even as most of the pundits are bearish and waiting for a substantial correction. They might be waiting a long time….

Those who speak of excessive bubble-like exuberance in the gold market are DEAD WRONG. I don’t see it at all. It becomes clear when looking at what the junior/exploration gold stocks have done of late. Many are priced LOWER than when gold was at $425. The way I see it, we have the REVERSE, excessive pessimism the gold move will not last…

Contrary to most every gold/silver pundit out there, I believe a precious metal share price explosion is right around the corner. Because almost of these pundits refuse to deal with what GATA knows, they are "out of it" as far I am concerned ... and have little idea what this gold market is really all about.”

From The Hightower Report, Futures Analysis and Forecasting:

“In retrospect the trade is calling the technical action in the gold market on Wednesday some sort of major technical failure. With the fundamentals shifting from patently supportive early in the session to patently negative late in the session it would certainly seem like the market is in for some extreme volatility ahead. In retrospect, the gold market was defeated by a hotter than expected core CPI reading and that is a turn of events. However, with the inflation threat, the market saw the equity market stumble badly and also saw the US Dollar recover and both of those developments undermine a specific demand element for gold. While few doubt that the Dollar is set to rise consistently, the fact that US and global economic activity is being questioned adds an additional vulnerability to gold that it didn't have coming into the opening Wednesday morning. Some traders also suggested that sharply lower gasoline prices undermined gold, while other simply blamed the broad based commodity selling on profit taking by the funds.

While the silver market came under pressure Wednesday as a result of the fundamental shift that was prompted by the CPI data, it is also likely that the disappointment in the copper market added to the selling interest in silver. With the silver market seemingly dragging behind gold recently, it seems that the trade was already becoming doubtful of some of the pre-existing bull themes. Furthermore, with the July silver violating a series of critical chart support levels, it would seem like the liquidative posture from last week has stepped back into the equation again. Some silver longs expressed significant concern over the weakness in the equity market as a serious stumble in the macro economic outlook could turn up the selling interest to an even higher level.”

Oil traded higher overseas but fell to near unchanged ahead inventory reports that showed crude inventories fell 100,000 barrels, gasoline inventories built 1.3 million barrels, and distillates fell 100,000 barrels.  The builds/minor drops were better than expected and energy prices soon fell off as a result.  A lowered demand forecast from OPEC also added to selling pressure.

The U.S. dollar index remained lower in overseas trade before cutting into its losses following CPI data, but it remained lower on the day until “French Finance Minister Thierry Breton said "everything" must be done to stop the euro rising too much against the U.S. currency.”  After these comments were made public, the dollar rallied for the rest of trade and ended near its highs of the session.

Treasuries, the Dow, Nasdaq, and S&P all fell markedly as this morning’s CPI data raised inflation fears and increased chances the fed will continue to raise interest rates.  The Dow fell to 1 month lows and the Nasdaq fell to 6 month lows.

Among the big names making news in the market today were General Motors, UPS, Vivendi, Xstrata, Inco, Falconbridge, Honda, Talbots, Samsung, Zale, Mittal, Arcelor, Moody’s, and Hewlett-Packard.

Gold & Silver Stock News Update from GoldReview.com:

U.S. Energy’s (USEG) received Clarification of the Arbitration Award, Cardero’s (CDY) gold property in Argentina, and Gold Fields’ (GFI) mineral resources were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

All of today's gold and silver stock news:

Marshall Himes joins Galway as Chief Operating Officer - More
- May 17, 2006 | Item | E-mail

Technical report recommends drilling on Starfire's Carman nickel prospect, Timmins, Ontario, Canada. - More
- May 17, 2006 | Item | E-mail

General Metals Corporation Arranges Financing - More
- May 17, 2006 | Item | E-mail

International Royalty Corporation - Annual and Special Meeting Notification - More
- May 17, 2006 | Item | E-mail

Romarco Nominates Patrick Michaels to Board of Directors - More
- May 17, 2006 | Item | E-mail

Yale Options the Urique Project in the Sierra Madre Gold Belt of Chihuahua State, Mexico - More
- May 17, 2006 | Item | E-mail

Arbitration Panel Clarifies Its Award in the Nukem - U.S. Energy Corp./Crested Corp. Arbitration - "After 15 years of litigation, we are pleased the matter is finally over. Nukem paid us in excess of $15 million plus a return of our valuable Sheep Mountain uranium properties which we are in the process of selling a one-half interest for $7.1 million and 4.0 million shares of common stock in a Canadian uranium company." More
- May 17, 2006 | Item | E-mail

Red Lake acquires Mexican consultant - More
- May 17, 2006 | Item | E-mail

Canarc Transfers Interest in Sara Kreek Project, Suriname; Major Infill Drilling Program Now Underway at New Polaris Property, B.C. - More
- May 17, 2006 | Item | E-mail

Farallon Announces Further Metallurgical Test Results for the G-9 Deposit, Campo Morado, Mexico - More
- May 17, 2006 | Item | E-mail

Cloudbreak to Commence Exploration on Its 100% Owned Romanian Au-Ag Prospect - More
- May 17, 2006 | Item | E-mail

Cardero Acquires High-Grade Gold Property, Catamarca Province, Argentina - "Cardero Resource Corp. is pleased to announce that it has entered into agreements to acquire a 100% interest in the Incahuasi gold property in Catamarca province, northwestern Argentina. This property forms part of the Company's gold property portfolio in the prospective 61,000 km2 Santa Victoria basin." More
- May 17, 2006 | Item | E-mail

Arianne Acquires a Polymetallic Property in Opinaca - More
- May 17, 2006 | Item | E-mail

Anglo-Canadian Uranium Corp.: Information on Historical Colorado Uranium Estimate and Development Strategy - More
- May 17, 2006 | Item | E-mail

Typhoon Presenting at the Richmond Club in Toronto - More
- May 17, 2006 | Item | E-mail

ESO Uranium cuts 6.32 g/t gold over 5.6 meters at Mikwam - More
- May 17, 2006 | Item | E-mail

Respected Mining Veteran, John W. Maddry, Joins Silver Dragon Mining De Mexico S. A. de C.V. - More
- May 17, 2006 | Item | E-mail

Apogee Becomes a Producer with 100% Acquisition of La Solucion Mine - More
- May 17, 2006 | Item | E-mail

HE-5 Resources, Corp. Files Permit to Commence Drilling at Overman Property - More
- May 17, 2006 | Item | E-mail

Millstream's Airport East Property Shows Promise - More
- May 17, 2006 | Item | E-mail

Emgold Mining announces appointment of Vice President of Engineering and Construction - More
- May 17, 2006 | Item | E-mail

Platinum, palladium scrap supply to grow - "Strong metal demand and increased auto recycling have pushed up amounts of platinum and palladium recovered from used catalytic converters, and this supply should grow in the future, analysts said this week." More
- May 17, 2006 | Item | E-mail

Golden Eagle Receives Positive Confirmation from Bolivian Government - More
- May 17, 2006 | Item | E-mail

Paramount Gold Signs Agreement to Create Gold Alliance in Argentina, Chile and Peru - More
- May 17, 2006 | Item | E-mail

Mena Resources Inc.: Drilling Cuts 123.5m of 2.71 g/t in New Zone at the Increible 6 Gold Project, Bolivar State, Venezuela - More
- May 17, 2006 | Item | E-mail

Everton and Linear Discover High Grade Polymetallic Massive Sulfides at the Loma El Mate Concession, Dominican Republic - More
- May 17, 2006 | Item | E-mail

Production Underway at the Redstone Mine - More
- May 17, 2006 | Item | E-mail

Encouraging Drill Results at Nuinsco's Diabase Uranium Property Lead to Expanded Drilling and Geophysics Program - More
- May 17, 2006 | Item | E-mail

New Sleeper Gold Completes the Disposition of its Interest in the Sleeper Project in Nevada - More
- May 17, 2006 | Item | E-mail

Over 13 Massive Sulphide Targets Identified by Airborne Survey at Mengold's Burchell Lake Property - More
- May 17, 2006 | Item | E-mail

Stratabound Hits New Gold Zones & High Grade Silver/Base Metals at Elmtree - More
- May 17, 2006 | Item | E-mail

Geophysics and Drilling Expanded on Trend's Athabasca Uranium Property - More
- May 17, 2006 | Item | E-mail

GoldSpring Announces Appointment of Jim Golden as COO; Mining Operations Resume at Plum Mine - More
- May 17, 2006 | Item | E-mail

Gold Fields Announces Mineral Resources of 179.3 Million Ounces and Ore Reserves of 65.3 Million Ounces - "We are pleased that we have again been able to replace the reserves that we have mined, and to increase our overall resource and reserve position, despite having to use a SEC mandated 3 year trailing average gold price, which is considerably below prevailing spot prices." More
- May 17, 2006 | Item | E-mail

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