At the moment the euro is down .0179 for the week against the US dollar sending gold down $6.10 with silver once again bucking the trend by holding on for no change. The silver lease rates are still putting pressure on the shorts.
(5-17-05) Gold and silver are off to a good start this morning with gold currently up $1.50 and silver up .09. The silver lease rates are up this morning and it is beginning to appear as though the major banks are putting pressure on the shorts that are approximately two years silver supply short. The one and two month contracts are still economically viable but the three month, six month and one year contracts are still to high for leasing forward.
Golden Phoenix hould do well today with news out this morning.
Golden Phoenix Receives Permits From Humboldt County to Build a Molybdenum Mill for Its Ashdown Mine
SPARKS, Nev., May 18, 2005 /PRNewswire-FirstCall via COMTEX/ -- Golden Phoenix Minerals, Inc. (OTC Bulletin Board: GPXM), announced today it has received approvals from the Humboldt County Commissioners and Planning Commission to operate the Ashdown Moly Mine and Mill Project, located near Denio, Nevada. Building permits have been issued to Golden Phoenix by the Humboldt County Building Department to erect the structure that will house the mill machinery. Concurrently, the Nevada Division of Environmental Protection has issued written approval authorizing the mill machinery to be moved from its staging area onto the mill site. With receipt of these permits, Golden Phoenix starts construction of a 100-ton-per-day flotation mill to process molybdenite ore from the Ashdown mine, beginning with a targeted section of the Sylvia vein, which is detailed in the Golden Phoenix press release dated March 8, 2005. As soon as cash flow from the sale of molybdenum concentrates is established, Golden Phoenix will initiate an exploratory program to locate and define both existing and future moly targets, as well as prospective gold mineralization, using underground and surface step-out drilling.
Golden Phoenix is earning a 60% interest in the Ashdown Joint Venture with Win-Eldrich Mines, Ltd. (TSXV: WEX), and serves as manager and operator of the property.
Today was a good day for gold and silver. Gold closed up $1.20 at $418.30 and silver closed up .14 at $7.12. After the close about two hours ago they continued up in Australia with gold up another $1.00 and silver up an additional .08.
Silver appears to be breaking out a bit this morning and has broken through the $7.20 resistance level. Silver up .12 at $7.26, up .32 for the week so far. All silver lease rates are up and now too high for any viable roll over or selling short.
NEW YORK, May 27 (Reuters) - Silver futures in New York surged to a one-month high early Friday on fund buying sparked by talk of bullion demand and a new silver ETF (exchange-traded fund), while gold benefited from dollar weakness in holiday-shortened trading, dealers said.
"Speculation about tightness and speculation about the ETF from Barclays prompted some buying yesterday, and that has triggered fund stops (stop-loss buy orders) that pushed this thing up to $7.28" an ounce, said a COMEX silver floor broker.
"There was a little buying above the $7.245-7.25 area that pushed this thing up to $7.28. It looks like good trade selling there, though, and I think you're going to have more resistance at $7.30, because it's a psychological level," he added.
Metals trade on the New York Mercantile Exchange will wrap up early at about noon EDT (1600 GMT), and U.S. financial markets will be closed on Monday for the Memorial Day holiday.
July silver futures <SIN5> on the NYMEX's COMEX division rose 11.8 cents by 9:43 a.m. to $7.28 an ounce, near the top of a $7.12 to $7.285 session range and its loftiest since April 27.
Turnover was an estimated 11,000 contracts by 10 a.m.
Spot silver <XAG=> was at $7.23/26, up from $7.13/16 at the close. Friday's London fix was at $7.17.
"Silver is continuing to lead the precious metals complex," said David Meger, a metals analyst at Alaron Trading in Chicago, who saw broad fund interest over the last few days despite a firm dollar and softer gold prices.
A strong dollar weighs on metals as the dollar-denominated commodities get pricier for traders using foreign currencies.
Late on Wednesday, silver industry sources said Barclays Global Investors plans to file for registration seeking regulatory approval for a silver ETF within two months.
Gold remains bullish, despite the drop in gold shares and the rising U.S. dollar. This alone is unusual and it raises an important question… Could gold shares be leading the way down for gold, or will gold’s firmness eventually pull the shares back up?
Even though the fundamentals for gold have not changed, we also have to keep an open mind and remember that when it comes to the markets, anything is possible. So here’s what we’re watching…
GOLD SHARES: Fell at critical juncture
The fall in gold shares means a critical juncture was resolved in favor of gold and it was bad for gold shares. As you can see on Charts 1B and C, gold shares, and the ratio of gold shares to gold both resisted and fell from major downtrends, breaking below their uptrends since 2001. On the other hand, gold’s major four year trend is up (see Chart 1A).
Chart 1
For now, gold shares are oversold (see Chart 2B). This means we’ll likely see a further bounce up in gold shares in the upcoming months. The recent fall caused the XAU to move into a sideways band (see Chart 2A). If XAU now stays above 82, it could eventually rise to possibly its 2003-04 prior C highs as it rises from the lower to the higher side of the band.
Chart 2
This is why we think it’s best to keep the gold and silver shares you have rather than sell them now. Once the coming intermediate rise is over, however, we’ll reevaluate our gold share position and either keep some or sell and move heavier into gold, depending on the outcome.
BIG PICTURE: Gold better
The big picture is suggesting that gold could remain stronger than the shares for some time. Charts 1A and B show the relationship between gold and gold shares since 1969.
Here you can see that gold and gold shares generally move together on a major trend basis. There have only been three time periods since 1969 when gold shares were much weaker than gold.
The ratio of the two shows this best (see Chart 1C); that was in 1969-1972, 1974-1980 and 1996-2001. Of these three cases, the two in the 1970s were similar but the 96-01 case was different. If a renewed leg down in the ratio is indeed underway, the gold share weakness today could be similar to the 1970s.
In both cases, gold shares peaked before gold. Both then fell together but gold shares declined much more than gold prior to both markets reaching bottoms in 1969 and 1976 (see Charts 1A and B).
In the 1974-80 case, this coincided with gold’s steep 1½ year decline in-between the two powerful gold bull markets in the 70s. And in both cases, the weakness in gold shares and gold coincided with recession pressures at that time. But once this ended, gold rose strongly and it remained much stronger than gold shares, even though gold shares were rising too.
We’re not saying today’s gold share weakness will take the same form, but if it’s similar, this could be a first sign of caution that gold’s bull market may be temporarily interrupted before it heads higher. This is only a possibility but it’s something we’re watching, especially since we’re now seeing some signs of an economic slowdown.
The 1996-2001 period was different. It was the worst and last phase of the 20 year old bear market and gold shares were hit the most when the internet revolution swept the land. For now, gold shares will likely remain weaker than gold and we’ll watch the key gold numbers to keep us on track.
GOLD TIMING
Gold’s been consolidating since reaching a D low on February 8, which is typical for this time within the intermediate bull market cycle. What we call A rises and B declines are, together, a consolidation phase and in a bull market it’s the springboard for the best rise we call C, when gold reaches a new high (see Chart 3A).
Chart 3
For now, gold is in an intermediate B decline but it will stay bullish and the major trend will remain up as long as gold holds above its 65-week moving average, which identifies the major uptrend, at $415. And since the B decline appears to be near an end, a C rise may soon be getting started. That’ll be reinforced if gold now stays above $415 and then rises and stays above $425.
Silver is looking good and gold shares have been rebounding over the past couple of weeks. Could they be leading gold up into the next C rise? That may be and so far, so good.
On the downside, however, it’ll be a different story if gold closes and stays below $415. In that case, the rise since 2001 would be turning down indicating gold’s bull market will likely be temporarily interrupted. In other words, a situation similar to what happened in 1975-76 could then unfold.
We’ll soon see how this unfolds and since we’re at the moment of truth, we should know soon.
Gold and silver were down in Australia through London last night with gold down $5.20 at $414.00 and silver down .15 at $7.12 when the US market opened.
Male
Logged
