JP Morgan dispels rumours

The gold bugs watched in glee as their arch nemesis, JP Morgan, the counterparty to most gold-derivatives trading, issued a statement that refuted rumours it had recently lost upwards of US$17 billlion in gold trading. The statement described such speculation as “false and irresponsible.”

On the day of its statement, JP Morgan stock was pounded, dropping 96 to US$22.06 in New York on heavy volume. The bank, America’s second-largest after Citigroup, is the world largest player in the murky world of derivatives, with reportedly US$23.4 trillion in total derivatives value and US$69 billion in potential credit-risk exposure, at March 31, 2002.

The U.S.-listed gold-mining majors were mixed as gold prices were roiled by the Iraq-U.S. standoff: Newmont Mining fell $1.66 to US$24.28 on a somewhat disappointing earnings report; AngloGold advanced $1.26 to US$28.62; Gold Fields was off 45 to US$11.54; and Ashanti Goldfields rose 33 to US$5.73.

The silver stocks all posted strong gains as the silver price flexed its muscle: Coeur d’Alene Mines was up another 31 to US$1.82; Hecla Mining added 23 to reach US$4.14; Apex Silver Mines tacked on 22 to US$14.84; and Silver Standard shot up 41 to US$4.31

With base metal prices fairly quiet, the base metal miners were a mixed bag: Anglo American moved up 62 to US$14.02; BHP Billiton was down a penny to US$10.84; Rio Tinto gained 67 to hit US$78.91; Phelps Dodge slipped 3 to US$32.04; Alcoa dropped 28 to US$22.93; Freeport-McMoRan fell back 89 to US$12.68; and shell-shocked OM Group retreated another $1.49, to US$4.89.