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Gold Seeker Weekly Wrap-Up: Gold and Silver Fall About 3% on the Week

By: Chris Mullen, Gold-Seeker.com


-- Posted 1 May, 2009 | | Source: SilverSeek.com

 

Close

Gain/Loss

On Week

Gold

$886.95

-$3.80

-2.81%

Silver

$12.50

+$0.11

-3.03%

XAU

120.44

+0.35%

-4.22%

HUI

301.35

+0.94%

-3.04%

GDM

911.72

+0.58%

-4.59%

JSE Gold

2185.76

-147.34

-9.60%

USD

84.60

-0.13

-0.12%

Euro

132.67

+0.45

+0.19%

Yen

100.70

-0.76

-2.20%

Oil

$53.20

+$2.08

+3.20%

10-Year

3.174%

+0.050

+5.94%

Bond

122.15625

-0.40625

-1.67%

Dow

8212.41

+0.54%

+1.69%

Nasdaq

1719.20

+0.11%

+1.47%

S&P

877.52

+0.54%

+1.30%

 
 

 

The Metals:

 

Gold fell as much as $10.60 to $880.15 by late trade in Asia before it crawled back higher in London and morning New York trade and spiked up to within a dollar of unchanged at $889.80 in early afternoon action, but it then fell back off a bit in the last hour and ended with a loss of 0.43%.  Silver fell as much as 35 cents to $12.04 by midday in London, but it then steadily climbed back higher for most of trade in New York and ended near its session high of $12.617 with a gain of 0.89%.

 

Euro gold fell to about €669, platinum lost $12 to $1088, and copper gained nearly 5 cents more to about $2.10.

 

Gold and silver equities opened up slightly lower, but they then slowly climbed back higher for most of the rest of trade and ended with slight gains on the day.

 

The Economy:

 

Report

For

Reading

Expected

Previous

Michigan Sentiment

April

65.1

61.9

61.9

Factory Orders

April

-0.9%

-0.6%

0.7%

ISM Index

March

40.1

38.4

36.3

 

All of this week’s other economic reports:

 

Chicago PMI - April

40.1 v. 31.4

 

Employment Cost Index - Q1

0.3% v. 0.6%

 

Personal Spending - March

-0.2% v. 0.4%

 

Personal Income - March

-0.3% v. -0.2%

 

Initial Claims - 4/25

631K v. 645K

 

FOMC Rate Decision - 4/29

0.00%-0.25%

 

GDP - Q1

-6.1% v. -6.3%

 

Chain Deflator - Q1

2.9% v. 0.5%

 

S&P/C-S Home Price Index - February

-18.63% v. -19.0%

 

Consumer Confidence - April

39.2 v. 26.9

 

Next week’s economic highlights include Construction Spending and Pending Home Sales on Monday, ISM Services on Tuesday, ADP Employment on Wednesday, Initial Jobless Claims, Productivity, Unit Labor Costs, and Consumer Credit on Thursday, and Wholesale Inventories and April’s jobs data on Friday.  The official results of the banks’ stress tests will also be revealed late Thursday afternoon.

 

The Markets:

 

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

 

Oil rose back above $53 as decent economic data raised hopes for improving energy demand.

 

The U.S. dollar index and treasuries fell as traders put some cash to work.

 

The Dow, Nasdaq, and S&P were mixed and ended only slightly higher as lackluster earnings reports offset mostly better than expected economic data.

 

Among the big names making news in the market Friday were Ford, MasterCard, Chevron, and Brookfield.

 

The Commentary:

Dear CIGAs,

I have time for only a few brief comments today so I want to focus on a market that I think bears close watch, namely the US long bond. Yesterday I remarked that bonds had broken down technically and failed to maintain support at a critical level generated on the day in which the Fed first announced its quantitative easing program and its intent to make sizeable purchases of longer dated US debt. They continued sliding further today as selling momentum increased dropping just shy of a full point at one time during the session. The day is still not over and these bonds have made a fool out of me more than once over the last few years, but as of right now, they look very vulnerable to further declines. Obviously a swift sell off in the equity markets can be expected to bring in buying in the bonds but whether or not they can recapture broken support levels on the chart remains unclear even if that were to occur. Rest assured that the US monetary authorities are more than displeased to see what is occurring in the long bond and have doubt taken notice. It would not surprise me to see them make some sort of concerted foray into the market to attempt to impose their wills on it.

 

I do not think it can be emphasized sufficiently enough that the technical breakdown in the long bond carries profound consequences for the future of the US economy moving forward but it is particularly significant because it indicates to me that the bond vigilantes have indeed awakened from their prolonged period of hibernation. It is evident that the bond market has now shifted its focus firmly to the looming massive supply of debt coming its way and that the fear is that current levels of demand (the Fed’s planned purchases notwithstanding) will not be able to keep up with this expected huge increase supply. Economics 101 tells us that oversupply in the face of steady or falling demand means lower prices and the bonds are responding to this inexorable fact.

 

That this technical breakdown is occurring alongside a strong move higher in copper, a move higher in the grains, sugar and various other commodities is not without significance. I have been remarking that gold has been caught in a sort of no man’s land of recent weeks as the market psychology has been wavering back and forth between deflationary fears and expectations of future inflationary pressures. When safe haven flows dry up, gold has been struggling to sustain its gains as insufficient buying tied to its role as an inflation hedge has been present to offset the waning safe haven buying. Once the market however becomes firmly convinced that the inevitable and inescapable product of this reckless spending and nearly unlimited amounts of new debt creation by Washington and other nations will begin to produce its noxious offspring, then gold will find solid, sustained and strong buying in the face of any setbacks in price. We are not quite there yet, but with the bonds breaking down and the CCI slowly grinding higher, it seems to me that many large scale market participants are voting with their wallets and are buying commodities to position themselves for an inflation play that will makes them billions in profits in the months and years ahead.

 

I want to emphasize that my analysis is based solely on the price action of some key commodity markets that I monitor and that all important CCI index. Were it not for the fact that the natural gas market has been so weak due to its current supply glut, I am convinced that we would have already seen a CCI (Continuous Commodity Index) moving up a bit more strongly rather than its current grind higher. Either way it does more and more appear that we are slowly but surely seeing a shift away from the deflationary scenario to an inflationary one. The transition will be much like the shift from winter to spring so expect periodic episodes in which the former will not go quietly into the night. Let’s just watch this unfold and attempt to understand what the market price action is telling us.

 

Gold once again found buying support near the $880 level as the bulls were able to drive prices well off session lows once again. It was helpful to see both the HUI and the XAU moving higher today. Nothing has changed in the near term technical picture for gold yet. Bulls are attempting to fend off a concerted effort to take it lower but cannot yet break the downsloping trendline that dominates the daily chart. The triangle pattern is still intact for now.

 

Copper has run right back up into a region where if it is going to fail technically, this is the spot. If it can push higher into next week, and particularly if it could somehow take out the $2.20 level, it should bode well for the entire commodity complex. We will just have to wait and see.- Dan Norcini, More at JSMineset.com

 

Dear CIGAs,

 

Government estimates are that from a mild to major pandemic the US GDP would drop 1 to 4 1/4%. Those figures are from the CBO May 2006 review.

 

The question is what will happen to Federal Income Tax revenues in the same period.

 

Assume the worst case scenario and a fall of more than 30% is quite possible. That suggests a Federal Budget deficit in the area of a mild $2.5 Trillion in 2009 to a severe pandemic and $7 trillion.

 

It is therefore clear that the largest economy has the most significant problems. Which would you want, the US dollar or the Swiss Franc?

 

That begs the question of what asset will hold its value best in a major human crisis? History answers that with gold.”- Jim Sinclair, JSMineset.com

 

“June Gold closed down 3 at 888.2. This was 6.2 up from the low and 2.6 off the high.

 

May Silver finished up 0.175 at 12.48, 0.075 off the high and 0.31 up from the low.

 

The gold market at least initially respected the prior session's low and in the process gave off a double bottom formation. With the gold market falling under the 100 day moving average on Thursday and remaining below that level Friday, the technical setup was thought to be favoring the bear camp. At the risk of sounding like a broken record, the gold market seemed to be under an ongoing liquidation wave off the idea that overall flight to quality conditions were on the decline. In fact, many traders assumed that the gold market was seeing capital losses to the equity markets and given the better than expected US numbers and the mostly positive equity market action, many investors are looking beyond gold and silver to riskier instruments. While the scheduled data was generally up beat on Friday morning, the gold market might have been partially undermined by the release of weak US auto sales data just after mid session.

 

The July silver contract saw a noted washout early in the trading session Friday but managed to reject that selling rather definitively and track back into positive ground before mid day. It almost seemed like the silver market was picking up broad based macro economic buying support in the wake of a surprise rally in crude oil and impressive gains in the copper market. Many players took note of the divergence between gold and silver prices on Friday and that action might be suggesting that silver is benefiting from the ongoing improvement in the macro economic outlook.”- The Hightower Report, Futures Analysis and Forecasting

 

GATA Posts:

 

 

China's gold buy raises eyebrows for all the right reasons

New central bank gold sales plan seen as bullish for bullion

 

The Statistics:

As of close of business: 5/01/2009

Gold Warehouse Stocks:

8,489,480

-287

Silver Warehouse Stocks:

116,810,442

+591,896

 

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 Exchage (TSE) AND Hong Kong Stock Exchange (HKEx)

SPDR® Gold Shares

1,104.45

35,509,158

US$ 31,353m

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

Gold Bullion Securities

132.10

4,247,171

US$ 3,764m

Australian Stock Exchange (ASX)

Gold Bullion Securities

13.40

430,052

US$ 382m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

28.36

911,794

US$ 819m

NASDAQ Dubai

Dubai Gold Securities

0.16

5,000

US$ 4m

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

 

COMEX Gold Trust (IAU)

Profile as of 4/30/2009

 

Total Net Assets

$1,957,216,763

Ounces of Gold
in Trust

2,198,111.462

Shares Outstanding

22,350,000

Tonnes of Gold
in Trust

68.37

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

 

Silver Trust (SLV)

Profile as of 4/30/2009

 

Total Net Assets

$3,414,832,226

Ounces of Silver
in Trust

270,484,574.500

Shares Outstanding

274,450,000

Tonnes of Silver
in Trust

8,413.01

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

 

The Miners:

 

Apollo Gold’s (AGT) mine progress, New Gold’s (NGD) five day mining halt to confront the flu epidemic, Great Panther’s (GPR.TO) mining halt, and U.S. Silver’s (USA.V) 2008 results were among the big stories in the gold and silver mining industry making headlines Friday.

 

WINNERS

1.  Paramount

PZG+11.40% $1.27

2.  Taseko

TGB +9.85% $1.56

3.  Nevsun

NSU +8.33% $1.30

 

LOSERS

1.  Newmont

NEM-3.75% $38.73

2.  Jaguar

JAG -2.03% $5.78

3.  Solitario

XPL -1.44% $1.094

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:

Creston Moly announces debt settlements - More
- May 01, 2009 | Item | E-mail


Eagle Plains/Teck Terminate Strategic Alliance - More
- May 01, 2009 | Item | E-mail


Great Panther Supports Mexican Government Directive - "GREAT PANTHER RESOURCES LIMITED (Toronto:GPR.TO - News) (the "Company") announces that it is supporting the order from the Health Secretary of Mexico, by closing its 100% owned silver mines in Guanajuato and Topia for the five days May 1 to 5, inclusive. Both mines are scheduled to resume normal operations on May 6." More
- May 01, 2009 | Item | E-mail


PolyMet Reports Fiscal 2009 Fourth Quarter and Full Year Results - More
- May 01, 2009 | Item | E-mail


African Copper Plc: Alternative Offer to Bondholders by Natasa Mining Limited - More
- May 01, 2009 | Item | E-mail


Maya Gold & Silver Inc Announces $2.5 Millions Private Placement Financing - More
- May 01, 2009 | Item | E-mail


Rusoro Mining Reports its 2008 Financial Results - More
- May 01, 2009 | Item | E-mail


Skyline Announces Closing of Private Placement - More
- May 01, 2009 | Item | E-mail


Avalon Granted Conditional Approval by TSX for Warrant Re-Pricing - More
- May 01, 2009 | Item | E-mail


Celtic financial filing update - More
- May 01, 2009 | Item | E-mail


Sheltered Oak Resources Engages CHF Investor Relations - More
- May 01, 2009 | Item | E-mail


High River Gold Announces Change to the Board of Directors - More
- May 01, 2009 | Item | E-mail


Capstone Temporarily Halts Operations at Cozamin in Response to Mexican Presidential Decree - More
- May 01, 2009 | Item | E-mail


Lakota Resources Announces Default in Filing Financial Statements And Resignation of its Chief Financial Officer - More
- May 01, 2009 | Item | E-mail


Yukon Gold Announces Issuance of Common Shares to Atna Resources Ltd. - More
- May 01, 2009 | Item | E-mail


Patriot Gold Announces Major Land Acquisition at Bruner Project, Nevada - More
- May 01, 2009 | Item | E-mail


Forsys Increases Valencia Reserve by 68% and Further Updates Resource - More
- May 01, 2009 | Item | E-mail


Unico, Inc. Announces Form 4 Filing by Chairman Reporting the Acquisition of Over 2.1 Million Shares of Common Stock - More
- May 01, 2009 | Item | E-mail


Harte Gold Corp.: Private Placement - More
- May 01, 2009 | Item | E-mail


Personnel developments at Yukon-Nevada Gold Corp. - More
- May 01, 2009 | Item | E-mail


Atna Resources Receives Final Payment in Marg Property Sale - More
- May 01, 2009 | Item | E-mail


Soltoro Ltd.: Update on Exploration Programs - More
- May 01, 2009 | Item | E-mail


Nolan 2009 Proposed Drilling Program, Environmental Considerations - More
- May 01, 2009 | Item | E-mail


General Moly Announces First Quarter Results - More
- May 01, 2009 | Item | E-mail


Colorado Goldfields Inc. Announces Live Video Tour of Pride of the West Mill, With Live Interviews -- Release Date Wednesday, May 6, 2009; Merger Talks on Sched - More
- May 01, 2009 | Item | E-mail


Iberian Reports 2008 Results-Profit After Hedge Close-Out - More
- May 01, 2009 | Item | E-mail


CanAlaska Uranium Ltd. - Cree East Uranium Project drill results - More
- May 01, 2009 | Item | E-mail


Titanium Corporation appoints new Chief Financial Officer, relocates head office to Edmonton, Alberta and grants stock options - More
- May 01, 2009 | Item | E-mail


Cameco Reports First Quarter Earnings - More
- May 01, 2009 | Item | E-mail


Geovic Announces Annual Stockholder Meeting, Follow-Up Investor Meetings - More
- May 01, 2009 | Item | E-mail


Boxxer Closes Fully Subscribed Private Placement - More
- May 01, 2009 | Item | E-mail


Century Mining Announces Late Filing Of Annual Financial Statements - More
- May 01, 2009 | Item | E-mail


Tamerlane receives Water License for its Pine Point Project - More
- May 01, 2009 | Item | E-mail


Northern Continental Agrees to be Acquired by Denison Mines Corp. - More
- May 01, 2009 | Item | E-mail


Denison Agrees to Acquire Northern Continental Resources Inc. - More
- May 01, 2009 | Item | E-mail


Silk Road Resources Ltd. announces financial results for Year Ended December 31, 2008 - More
- May 01, 2009 | Item | E-mail


Mengold Resources: Notice of Change of Auditor - More
- May 01, 2009 | Item | E-mail


Soltoro Ltd.: Notice of Change of Auditor - More
- May 01, 2009 | Item | E-mail


Closing of convertible note financing - Change in financial year end - More
- May 01, 2009 | Item | E-mail


Castle Gold Reports Fourth Quarter and Year-End 2008 Operating and Financial Results - More
- May 01, 2009 | Item | E-mail


Medoro Resources Announces 2008 Year-end Results - More
- May 01, 2009 | Item | E-mail


Apollo Gold Updates Market on Progress at Its Black Fox Mine and Mill Complex - "Open pit operations commenced at the Black Fox project with the first blast on March 18, 2009 and to date we have mined 240,000 tonnes of material of which 75,000 tonnes was ore. 16,000 tonnes of this ore has been crushed and transported to the Black Fox mill which is 26 kms west of the mine site." More
- May 01, 2009 | Item | E-mail


U. S. Silver Reports 2008 Results - "The Comprehensive Loss was $14.4 million in 2008 compared to $2.2 million in 2007, an increase of $12.2 million. The $12.2 million difference was due to an $11.3 million negative change in unrealized foreign exchange, the 2008 realization of a loss on derivatives designated as cash flow hedges which was unrealized in 2007 (a $4.9 million change) and an increase in the unrealized loss on available for sale financial assets of $1.1 million." More
- May 01, 2009 | Item | E-mail


In Accordance with the Mexican Government's Program to Confront the Flu Epidemic, New Gold Will Stop Mining in the Cerro San Pedro Open Pit for Five Days - "New Gold Inc. ("New Gold") (TSX and NYSE AMEX - NGD) today announces that in response to the decree issued by the Mexican Government, which orders a five day closure of all non-essential activities throughout the country, it will suspend mining in the Cerro San Pedro open pit from May 1 to May 5, 2009. Operation of the mine's leach pads will continue. This action is not expected to significantly change the 2009 production forecast at Cerro San Pedro." More
- May 01, 2009 | Item | E-mail


 

- Chris Mullen, Gold Seeker Report

 

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© Gold Seeker 2009

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 1 May, 2009 | |


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