Monday, February 27, 2006


Metals End Flat, Newmont Stumbles

Reuters reports on what moved the markets today. "Gold slipped on Monday as lower oil prices increased selling pressure and investors booked profits from a recent two-week high, dealers said. 'The market has drifted lower after the spike higher on Friday and it should be well-supported at current levels,' said Yingxi Yu, precious metals analyst at Barclays Capital. 'The attack on Saudi Arabia last Friday will serve to exacerbate geopolitical concerns and make people nervous about holding aggressive short positions at present.'"

"Gold traded to $554.70/555.50 an ounce by midafternoon in New York on Monday, after earlier rising as high as $558.75. That compared with $558.60/559.50 late on Friday when it rose almost 2 percent. Oil prices fell more than a dollar after surging last week on the al Qaeda attack on the world's biggest oil processing plant in Saudi Arabia."

"'They (market players) are trying to push it down to $550s to see if any support around there,' said a precious metals trader in London. 'This Russian-Iranian thing has taken the sentiment off the market a bit,' he added. Officials said on Sunday that Iran had reached a 'basic' agreement with Russia on jointly enriching uranium, but there was no immediate sign that it would suspend homegrown enrichment to allay fears it was developing nuclear weapons."

"Analysts said gold has not shown a clear trend after falling from its recent peak but long-term sentiment was bullish. 'The forward curve continues..implying that markets continue to expect stronger future gold prices,. John Meyer, analyst at Numis Securities, said in a report."

"Analysts said Friday's data showed the net long position on New York's COMEX gold contract was little changed on the week at 15 million ounces. Fresh inflows into the exchange-traded funds almost dried in the past couple of weeks."

"In other precious metals, platinum rose to a two-week high of $1,041 an ounce before easing to $1,032/1,036, compared with $1,033/1,037 in New York. Silver was at $9.64/9.67 an ounce after rising to a three-week high of $9.75, against $9.71/9.74 previously. Palladium rose as high as $288, but fell to $279/283, vs. $285/289."

"UBS Investment Bank cut its one- and three-month forecasts for palladium to $260 and $250 an ounce from $300 and $270 respectively. It projected that palladium prices would average $250 in 2006 and $230 in 2007."

"Newmont Mining Corp (NEM), the world's biggest gold producer, said on Monday that fourth-quarter profit dropped, even as the price of gold rose. Earnings were hurt by higher energy and raw material costs as well as legal settlements and asset write-downs, the company said. It also forecast it would sell less gold in 2006 than last year."

"The results sent Newmont shares sliding 4.6 percent on the New York Stock Exchange. One trader who declined to be named said it was hard to believe its profitability was down when the price of gold was higher than last year."

O.T... Silver Bullion
John, nice article.
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