-- Posted 16 May, 2008 | Digg This Article |

The Metals:

Gold rose about 1% in Asia and London before it accelerated its gains in New York and ended near its high of $904.80 with a gain of 2.33%.  Silver rose to as high as $17.042 by late morning in New York before it fell back off slightly in the last couple of hours of trade, but it still ended with a gain of 1.8%.

Euro gold rose to about €577, platinum gained $51 to $2114.50, and copper gained nearly 9 cents to about $3.85.

Gold and silver equities rose nearly 3% at the open and remained near their highs into the close.

The Economy:

All of this week’s economic reports:

The Markets:

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

Oil rose to a new record intraday high of $127.82 on Goldman’s call for $141 a barrel in the second half off 2008.  Gains pared slightly after the Saudis announced they would increase production by 300,000 barrels a day to make up for shortfalls in other countries, but oil still closed with a nearly 2% gain at a new record closing high.

The U.S. dollar index fell and treasuries rose after consumer confidence came out at a 28 year low and pushed interest rates lower in early trade, but bonds turned down to end with just slight gains as stocks rebounded in late trade.

The Dow, Nasdaq, and S&P fell roughly 1% by late morning on another new record high in oil and poor consumer sentiment data, but all three indices rallied higher in afternoon trade and closed mixed and near unchanged on optimism that the housing sector may be rebounding.

Among the big names making news in the market Friday were Fannie Mae, Abercrombie & Fitch, Yahoo and Icahn, and Berkshire Hathaway.

The Commentary:

“June Gold finished up 19.9 at 899.9, 4.6 off the high and 5.4 up from the low.

July Silver closed up 0.275 at 16.96. This was 0.02 up from the low and 0.14 off the high.

The gold market managed a quasi impressive range up extension on Friday and since that move comes in the wake of a two week consolidation the trade seemed to take the action Friday seriously. Certainly seeing what appeared to be a resumption of weakness in the Dollar rekindled currency market related buying interest in gold and with the June gold contract also managing to rise above a series of classic technical points on the charts could have prompted some technical short covering buying. With the stock market initially making a fresh new high for the move and crude oil prices also making a new all time high, it is possible that gold was seeing fresh speculative buying from the inflation angle. In the end, seeing the June gold contract manage a return to the even number level of $900 probably prompted some outright speculative buying interest.

The silver market just didn't seem to get as much of a lift as the gold market early in the trade Friday, but in the end July silver did manage to migrate toward the upper end of the last two week's consolidation range. While silver might have been lifted by a brokerage upgrade of a major silver producer on Friday morning, the main thrust of the gains in silver prices seemed to come from the renewed strength in the Dollar and perhaps because of broad based gains in a host of physical commodities.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Jason Hommel: A further warning to the CFTC

Resource Investor reports on CFTC denial of silver manipulation

Venezuela won't be adding to world's gold supply

ECB affects surprise that banks dump their junk on it

John Embry: Last chance to board gold train at under US$1,000

The Statistics:

As of close of business: 5/15/2008

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:

A free new stock report on Genco Resources by Peter Zihlmann at http://www.goldreview.com/news/ZihlmannInvest/1210955588.php, South Africa’s powe