Thursday, January 26, 2006


Silver Bucks Gold, Miners Upgraded

More volatility in the futures market today. "Gold futures fell Thursday, giving back much of nearly 1% gain they saw in the previous session, but prices were still trading above the session's worst level. 'Despite the continuing consolidation, there are few gold sellers,' said Julian Phillips, an analyst at 'Any pullback is already bringing buyers.'"

"Gold for February delivery fell to a low of $554.40 an ounce on the New York Mercantile Exchange. It was last at $557.70, down $4.80. Analysts remained upbeat about the metal's overall outlook despite gold's occasion pull backs. 'With..a lot of talk about new commodity funds getting involved in the metals, we have to think that the trend in gold will continue to point to the upside,' Nell Sloane. In the near term, she sees the $566 level as a 'critical pivot point, with close-in resistance seen at $570.'"

"Most other metals prices on the exchange pulled back along with gold after Wednesday's broad market strength, but silver managed to reach another 18-year high."

"Gold Fields Ltd. (GFI) saw its share rise 1% to $21.65. The South African miner said second-quarter earnings, which exclude special items, rose to $40 million from $11 million a year ago on higher production, lower expenses and strong gold prices. 'As expected, Gold Fields posted a strong December quarter with, in particular, the South African operations delivering a healthy 8% improvement in production, while maintaining a strong grip on costs as evidenced by a 4% decline in total cash costs,' CEO Ian Cockerill said in a statement."

"Shares in London-listed diversified resources groups Anglo American (AGL) and BHP Billiton (BIL) roared to record highs on Thursday morning after positive rating news from JP Morgan boosted the stocks in London. A weaker rand gave them added impetus locally. The rand was bid at 6.08 per dollar, around four cents weaker than its level at Wednesday's close on the JSE."

"In a research note, JP Morgan upped Anglo to 'neutral' from 'underweight' and reiterated its overweight rating on Billiton. Xstrata was upgraded to 'overweight' from 'neutral', while Rio Tinto was downgraded to 'neutral' from overweight'. JP Morgan said that it had reviewed the potential for each company to re-invest the considerable cash it expects to result from this period of strong commodity prices."

"As a result, it believed Xstrata and Billiton had the biggest upside potential from current levels, at 32% and 5% respectively, AFX reported."

Interesting that silver stayed up while gold was down seven bucks at one point.
maybe the gold/silver ratio is catching up with the price of silver!
I forgot, here is an interesting article about the silver/oil ratio.

Silver/Oil Ratio Extremes

hey ben, I read that the grains are at an all-time low, maybe you should start a grains blog? hahah.
john_the_law_ii said:

"maybe you should start a grains blog?"

With all due respects to Mike Nichols:

Just one word Benjamin: Soybeans!

Great future as a diesel additive
Just where is that "Silver ETF" anyway? I remember hearing it was around the corner. Any news on when (if) it's launching? (And what the ticker might be?)


Just where is that "Silver ETF" anyway? I remember hearing it was around the corner. Any news on when (if) it's launching? (And what the ticker might be?)

Still being reviewed by the SEC. No word on when a decision might be made.
Update on silver ETF:
LV_CPA thanks for the link. The fear of silver shortage for users because investors would tie it up reminded me of story which links, silver gold and uranium. During WW II the Manhattan project had need for 10,000 tons of copper to make giant electromagnetic separators to process uranium. When there was no copper to spare (pennies were made out of zinc and steel), they "borrowed" more than 10,000 tons of silver from the US Treasury and melted it down to wire for the magnets in the separation processing. Of course back then, the mint used silver for regular coinage and so the terasury stockpiled it. Anybody know if the treasury still has large holdings of silver.?
Heard on CNBC today that the Silver ETF was going to 21 day public comment phase. Barring any roadblock from the silver mfgs., looks like this is moving foward...I especially was encouraged by the comment that the market should dictate prices as a commodity...Woo Hoo
That's great the silver ETF is coming along. SLW has been boosting up. I wonder what the stock price will go to if SLV is approved.
2 thumbs up on the Silver ETF. Anybody have any thoughts with the new Euro etf FWE? I bought some on Wed. Of course it's down since then, but I see it as the lowest cost way to play the Euro currency market. What's your opinion on the Euro short term vs the dollar? I'm in the camp where interest rates rise in the next year. Isn't that a good thing for the dollar?
Euro ETF FWE? Is FWE the symbol? How do I track this ETF. Are there other ETFs for currencies?

Any guesses where silver will go immediately following the ETF launch?
It's FXE.
This is the only currency ETF available (brand new). I'm sure they are in the works for more. You can track any ETF symbol just like a stock symbol.

Austin Yankee: You should also ask where the silver will go before SLV hits the market too because Barclay has to acquire 130 million ounces of silver before the ETF is public!
"An e-mail I sent out" Well it happened... Silver blew past $9.60 an ounce. I remember sitting in this very chair last year saying it would hit $10 next year and here we are ahead of schedule.

" A comment from my father" The sad thing about the rising prices of silver and gold is that they reflect a sharp increase in the expected rate of inflation. As a veteran worrywart I see the quickening decay of the U.S. dollar as sign an economic firestorm is awaiting not far down the road. I keep thinking it's time to sell off one's surplus stuff, clear up debt*, and hunker down with an accumulation of cash and precious metals. -Dad

* Many people believe it's smart to hold debt because it is paid back with cheaper money. This is true up until the time inflation goes really haywire. When the storm hits you don't want to owe anybody anything if you can help it.
Yeah, just because inflation does go up, doesn't mean your employer is going to give you a raise. It might work better on macro/gov't levels, but it will hurt peons.
I've read that the Treasury melted down all their silver for production of Silver Eagles. Now they're buying on the market for production.
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