• Gold: 1,475.04 -0.71
  • Silver: 16.94 -0.03
  • Euro: 1.110 0.000
  • USDX: 97.39 -0.212
  • Oil: 58.33 -0.04

August 1: Gold and Silver Fall With Stocks

Chris Mullen
|
Wednesday, August 1st

 

 

Close

Gain/Loss

Gold

$1599.20

-$14.10

Silver

$27.37

-$0.57

XAU

149.11

-1.19%

HUI

403.44

-1.43%

GDM

1168.67

-1.33%

JSE Gold

2388.07

-22.77

USD

83.13

+0.48

Euro

122.26

-0.76

Yen

127.49

-0.54

Oil

$88.91

+$0.85

10-Year

1.539%

+0.047

T-Bond

150.28125

-0.75

Dow

12976.13

-0.25%

Nasdaq

2920.21

-0.66%

S&P

1375.32

-0.29%

 
 

The Metals:

 

Gold edged up to $1618.45 in Asia before it dropped down to $1592.17 after the FOMC announcement, but it then bounced back higher in late trade and ended with a loss of just 0.87%. Silver slumped to as low as $27.157 before it also rebounded, but it still ended with a loss of 2.04%.

 

Euro gold fell to about €1308, platinum lost $19.30 to $1392.70, and copper fell four cents to about $3.38.

 

Gold and silver equities fell about 3% at the open before they climbed back higher, but they still ended with over 1% losses.

The Economy:

 

Report

For

Reading

Expected

Previous

ADP Employment

July

163K

125K

172K

ISM Index

July

49.8

50.1

49.7

Construction Spending

June

0.4%

0.5%

1.6%

 

Mortgage applications rose last week: MBA Reuters

 

“The Federal Reserve stopped short of offering new monetary stimulus on Wednesday even as it signaled further bond buying could be in store to help a U.S. economic recovery that it said had lost momentum this year.

 

Fed officials described the economy as having "decelerated somewhat," a change of tone from its previous assessment in June when it said the economy had been "expanding moderately."

 

The Fed's policymakers also reiterated their disappointment with the slow pace of progress in bringing down the nation's 8.2 percent jobless rate.”

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 7/28 expected at 365,000 and at 10AM is the Factory Orders report for June expected at 0.6%.

 

The Markets:

 

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

 

Oil rose after the Energy Information Administration reported that crude inventories fell 6.5 million barrels, gasoline inventories fell 2.2 million barrels, and distillates fell 1 million barrels.

 

The U.S. dollar index jumped higher after the fed’s announcement.

 

Treasuries fell as yields rose after the fed did not announce any new measures aimed at keeping interest rates low.

 

The Dow, Nasdaq, and S&P turned mostly slightly lower after the fed’s announcement.

 

Among the big names making news in the market today were Knight, MasterCard, Chrysler, Symantec, Comcast, Hyatt, and Deutsche Bank.

The Commentary:

 

I mentioned a short time ago that talk was growing - scratch that - extreme disgust was growing - among livestock and poultry producers - concerning the federal mandate for ethanol. In the midst of the most extreme drought to hit the US corn and bean growing region since 1988, supplies of corn have been shrinking to very tight levels. However, a good deal of this can be attributed to the federal mandate requiring ethanol blended gasoline. Some of you may know, but this ethanol comes mainly from distilling corn.

As a matter of fact, approximately 40% of all corn demand goes to this boondoggle. While the byproduct of ethanol demand, DDGS, can be fed to livestock, the facts are that without this mandate, a large share of the corn grown in this nation would be otherwise available for feed use, something that has not been lost on the nation's livestock and poultry producers who are suffering extreme hardships as they watch their feed costs escalate into the stratosphere, destroying their profits in the process and threatening their very livelihoods.

I suspect that this the level of this outrage is going to continue to increase in the weeks and months ahead. I also suspect that more and more pressure is going to be brought to bear upon the policy makers to temporarily rescind this mandate to alleviate the tightness in the supply situation for corn.

The question is whether this comes prior to the election or after the election. Keep in mind that Senators and Congressmen from farm belt states have generally been in favor of this mandate as it has, in the past, helped push demand higher for corn and thus favored a large number of their constituents. However, Senators and Congressmen from those states with large concentration of beef, dairy, pork and poultry producers have tended to be on the opposite side of this issue.

This could very well turn out to be a tremendous factor in determining when the bull market in corn comes to an end. A temporary rescinding of the mandate would lead to a decent sized drop in the price of corn and would tend to lessen some of the recent upward price pressures on the entire food complex.

We will continue to monitor this situation and keep the readers posted.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

Treasury prepares for negative-rate bidding in bond auctions

Swiss National Bank overwhelmed in desperate campaign to devalue franc

 

The Statistics:

As of close of business: 7/31/2012

Gold Warehouse Stocks:

10,810,554.841

+4,000.07

Silver Warehouse Stocks:

138,597,290.230

-621,019.10

 

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

1251.925

40,250,633

US$64,336m

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

Gold Bullion Securities

123.89

3,983,107

US$6,390m

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

ETFS Physical Gold

147.75

4,750,199

US$7,746m

Australian Stock Exchange (ASX)

Gold Bullion Securities

11.16

358,789

US$575m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

40.91

1,315,135

US$2,098m

Note: Change in Total Tonnes from yesterday’s data: SPDR added 3.319 tonnes.

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 182.90: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 9,687.66: +48.24 change from yesterday’s data.

 

The Miners:

 

Nevsun’s (NSU) exploration license and Silvercorp’s (SVM) drill results were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1. Northern Dynasty

NAK +5.91% $2.51

2. Comstock

LODE +4.91% $2.99

3. Great Panther

GPL +4.22% $1.73

LOSERS

1. Almaden

AAU-10.8% $1.90

2. Revett

RVM-8.20% $2.91

3. Paramount

PZG-7.49% $2.10

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

Please see Yahoo’s Mining/Metals News Wire for all of today’s mining news.

 

- Chris Mullen, Gold Seeker Report

- Would you like to receive the Free Daily Gold Seeker Report in your e-mail? Click here

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

© Gold Seeker 2012

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