The earlier sell-off in equities pushed gold prices about $1,800/ounce briefly as part of the fall-out from the downgrade of US debt. Demand for a safe haven separated gold and silver prices again, with the gold:silver ratio widening to nearly 45. Gold and silver ETFs as well as mining stocks are all affected by the sudden return to equities.

The SPDR Gold Trust (NYSE: GLD) is up marginally today, at $170.07, in a 52-week range of $118.36-$175.13, its highest level since last Thursday. The iShares Gold Trust (NYSE: IAU) is down marginally, at $17.01, in a 52-week range of $11.88- $17.56. Weakness in the Empire State manufacturing index has probably helped prop up gold prices even as equities gain more interest.

The iShares Silver Trust (NYSE: SLV) is up about 0.5%, at $38.31, in a 52-week range of $17.48-$48.35, and the ETFS Physical Silver Shares Trust (NYSE: SIVR) is up by approximately the same amount, at $39.07, in a 52-week range of $17.80-$49.28. Silver’s status as a safe haven simply isn’t strong enough to keep its price increases on a par with gold’s. There could be a buying opportunity in physical silver, though, because it’s pretty likely that silver will break and stay above $40/ounce.

Mining stocks and ETFs are up as well today, with Newmont Mining Corp. (NYSE: NEM) posting a gain at around noon of 1%, at $57.97, in a 52-week range of $50.05-$65.50. Miners Goldcorp Inc. (NYSE: GG) and Barrick Gold Corp. (NYSE: ABX) have also risen by about half that amount.

The Market Vectors Gold Miners ETF (NYSE: GDX) is also up about 1%, at $59.81, in a 52-week range of $49.57-$64.62. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) is up more than 1.5%, at $35.57, in a 52-week range of $28.06-$44.86. The Global X Silver Miners ETF (NYSE: SIL) is also up more than 1.5%, at $25.57, in a 52-week range of $14.58-$31.34.

The mining stocks are rising pretty much in parallel with the overall rise in the Dow and the S&P 500. There is still not a lot of reason to be sanguine about equities, so the modest slide in gold probably won’t last long. Given the recent swings, caution and safety may be the most important forces at work for some time yet.

Paul Ausick

Newmont Mining Corp. (NYSE: NEM) reported earnings this morning that failed to reach expectations, posting adjusted EPS of $0.90, roughly -10% below estimates. Revenue also missed expectations, coming in at $2.4 billion compared with estimates of $2.5 billion. Production of gold fell -5.4% and copper production fell -45%, primarily on lower-grade ores. Newmont’s average price for gold was $1,501/ounce, in line with realized prices reported yesterday by Barrick Gold Corp. (NYSE: ABX) and Goldcorp Inc. (NYSE: GG). [http://247wallst.com/2011/07/28/gold-mining-earnings-shine-but-less-than-gold-itself-abx-gg-gld-gdx-gdxj/]

Newmont’s other issue was rising costs, which rose to $538/ounce, between cash costs of $445 at Barrick and $553 at Goldcorp. Managing costs remains the main anchor on gold miners’ share prices compared with the price of gold.

Newmont’s CEO told CNBC that he expects gold prices to reach $1,750/ounce in 2012 as a result of inflationary pressures and ongoing economic problems in the US and Europe. He also noted that Newmont would raise its dividend in the third quarter from $0.20/share to $0.30.

Not even the dividend hike could keep Newmont’s stock from falling. Shares are down more than -3.5%, at $55.70, in the late afternoon, within a 52-week range of $50.05-$65.50.

The SPDR Gold Trust (NYSE: GLD) posted a new 52-week high today of $159.25, but has retreated somewhat. The new 52-week range is $113.34-$159.25. The iShares Gold Trust (NYSE: IAU) also posted a new 52-week high today, for a new range of $11.35-$15.95.

The Market Vectors Gold Miners ETF (NYSE: GDX) has lost another -2% today, trading late in the day at $56.90, in a 52-week range of $47.45-$64.62. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) lost more than -2% early this morning, but has gained about half of that back to trade now at $36.00, within a 52-week range of $25.89-$44.86.

Silver’s lackluster performance on the commodity markets today is reflected in the ETFs that focus on the devil’s metal. The iShares Silver Trust (NYSE: SLV) is up about 0.6%, at $38.99, within a 52-week range of $17.38-$48.35. The PowerShares DB Silver Fund (NYSE: DBS) is up about 0.75% at $70.28, within a 52-week range of $31.09-$86.98.

Silver miner Silver Wheaton Corp. (NYSE: SLW) is down about -2%, at $36.23, within a 52-week range of $18.15-$47.60, and Pan American Silver Corp. (NASDAQ: PAAS) is down about -2.5%, at $30.32, within a 52-week range of $22.52-$43.06. The Global X Silver Miners ETF (NYSE: SIL) is down about -0.6%, at $26.25, within a 52-week range of $12.90-$31.34.

Paul Ausick

We’ve already looked at the possibility that a silver price above $40/ounce may be a death trap. But the possibility of $100/ounce silver is worth a look, too. Silver ETFs, including iShares Silver Trust (NYSE: SLV), ETFS Physical Silver Shares (NYSE: SIVR), PowerShares DB Silver (NYSE: DBS) and Global X Silver Miners ETF (NYSE: SIL), will react regardless of which way prices move.

Technical analysts at Citigroup Global Markets say that silver prices are following a trend begun in late 2001 that saw prices rise nearly six times before a March 2008 correction that pulled the price down by 60%. Since then, prices have recovered and once again tested the all-time high set in 1980. Citigroup analysts told Bloomberg, “If the final rally in the last bull market repeated then we can expect $100 over the long term.”

Another view on silver prices is related to the massive number of short contracts that will have to be covered if the price rises above $40/ounce. Demand for silver remains high, especially in China, where the trade in silver is not subject to Comex margin hikes. A small boost in price could quickly develop into an explosion of demand, putting a short squeeze into play and driving silver prices even higher.

A third view is that a fundamental supply shortfall will occur as stockpiles dwindle. Unlike gold, silver is consumed when used in some industrial applications, and industrial demand for silver is rising.

Finally, until permanent steps are taken to resolve Europe’s sovereign debt crisis and the US debt ceiling issue, demand for silver as a safe haven will also factor in the gray metal’s price.

The iShares Silver Trust (NYSE: SLV) moved above $39/share last week, before pulling back to close at $38.31 yesterday. The 52-week range is $17.06-$48.35.

The ETFS Physical Silver Shares (NYSE: SIVR) also peaked at slightly above $40 last week and closed yesterday at $39.07. The 52-week range is

$17.37-$49.28.

The PowerShares DB Silver (NYSE: DBS) peaked last week at $70.94, and closed yesterday at $68.81. The 52-week range is $30.91-$86.98.

The Global X Silver Miners ETF (NYSE: SIL) posted a recent high of $27.75 last week and closed yesterday at $27.41. The 52-week range is $14.18-$31.34.

While the share prices of these silver ETFs are still wobbly, they are wobbling at a slightly higher level. Spot silver prices have posted an intra-day high of $39.97 this morning, about half an hour before US equity markets open. If silver closes at around $40/ounce today, next week should be very interesting.

Paul Ausick

PowerShares DB Silver (NYSE: DBS) is far smaller and far thinner in trading volume.  At $24.67, its 52-week range is $14.81 to $33.00 and market cap is listed as almost $83 million.  This one only trades almost 100,000 shares on an average day.  There is also the E-TRACS UBS Bloomberg CMCI Silver ETN (NYSE: USV), although this one is so small and thinly traded that we do not even rank it very high.

Then there is leveraged-ETF trend seen in the the Ultra Silver ProShares (NYSE: AGQ), which is double-leverage against silver bullion.  At $41.22, its 52-week trading range is $21.60 to $57.32 and its average volume is roughly 250,000 shares.  Its double-short inverse is the ProShares UltraShort Silver ETF (NYSE: ZSL).

Despite the “four letter ticker” that might make you think this is a NASDAQ traded instrument, it trades on the NYSE.

JON C. OGG
JULY 24, 2009

Once again, we have dropped most of the ‘leveraged’ and ‘Short’ or ‘Ultra-Short’ ETF’s.  The idea is to show which sectors were the winners and losers.  We also screen out if too many ETF’s tied to the same sector are showing up so we can show the winners and losers by groups rather than solely be the numbers.  Here are today’s:

ETF WINNERS:
iShares MSCI Taiwan Index (EWT)                             +0.83%
PowerShares Dynamic Insurance (PIC)                    +0.63%
Ultra Utilities ProShares (UPW)                                   +0.61%
Utilities Select Sector SPDR (XLU)                              +0.57%
Vanguard Long-Term Bond ETF (BLV)                       +0.50%
iShares Lehman 20+ Year Treasury (TLT)                +0.48%
PowerShares Dynamic Food & Beverage (PBJ)       +0.46%
iShares S&P Global Cons Discretionary (RXI)          +0.45%
PowerShares Dynamic Deep Value    (PVM)             +0.47%

ETF LOSERS:
iShares MSCI Mexico Index (EWW)                             -1.95%
PowerShares DB Silver (DBS)                                     -1.9%
SPDR S&P Oil & Gas Equipment & Services(XES) -1.87%
SPDR S&P Homebuilders (XHB)                                 -1.86%
iShares Dow Jones US Home Construction (ITB)    -1.79%
DJ Wilshire REIT ETF (RWR)                                        -1.71%
HealthShares European Drugs (HRJ)                         -1.70%
iShares S&P Latin America 40 Index (ILF)                   -1.7%
iShares MSCI Malaysia Index (EWM)                             -1.66%
KBW Capital Markets ETF    (KCE)                                 -1.65%
First Trust Value Line Equity Allc Index (FVI)                 -1.6%

Jon C. Ogg
June 25, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.