Tuesday, April 15, 2014
The political unrest in Ukraine helped boost gold prices on Monday with June futures closing at 1327.50.
The political unrest in Ukraine helped boost gold prices on Monday with June futures closing at 1327.50. Although the uncertainty is favorable for AU, several analysts are waiting for the demand for the safe haven asset to fizzle out. The tightness in the Palladium markets continue amid tensions in Ukraine and the ongoing strike in South Africa. The precious metal markets are trading in the red zone across the board this morning. A stronger U.S. dollar and profit taking is putting pressure on gold prices in addition to a report by the World Gold Council which indicated that China’s demand for gold will be limited this year due to the vast consumption in 2013. Silver prices are being dragged by the gold and is trading approximately 3.3% on the downside this morning. We see intensified long liquidation in Palladium as the metal broke below $800. CPI for March is up .2% vs. expectations of .1%. Have a great day!
Monday, April 14, 2014
Palladium made a new high at $814.20 as supply concerns continue to escalate and is up roughly 14% for the year.
Palladium made a new high at $814.20 as supply concerns continue to escalate and is up roughly 14% for the year. Tensions in Ukraine and expectations that interest rates will continue to stay low have been supporting gold prices at these levels. The Fed’s March minutes clarified that interest rates will not rise substantially after quantitative easing is over as the markets had previously expected. Morgan Stanley & Goldman Sachs continue to remain bearish on gold as they believe this rally is temporary. Core Retail Sales for March are up .7% vs. expectations of .5%. Have a wonderful day.
Friday, April 4, 2014
Yesterday’s ISM Non-Manufacturing PMI result of 53.1 was close to forecasts of 53.5. This figure indicates that the non-manufacturing sector of the economy is generally expanding. The metals markets are trading on the upside early this morning ahead of the NFP and unemployment numbers. Nonfarm Payroll numbers for March are up 192,000 vs. expectations of 200,000 and the unemployment rate remains at 6.7%. We saw gold break above 1300 on the screens amid the weaker than expected jobs report and slightly come off moments later. Gold and silver are trading on the upside as weaker than forecasted economic data signals that perhaps the Fed won’t hike rates earlier than expected. Have a wonderful weekend!
Monday, March 31, 2014
All the metals are trading on the upside across the board with the exception of gold. Silver, Platinum, Palladium up .18%, .85%, and .66% and Gold down .15% . Gold was down approximately 3% in the month of March amid Janet Yellen’s hawkish statement that eroded interest in the non-yielding asset. Yellen will speak in Chicago today and investors will be listening for her stance on rates. Platinum continues to see support due to supply concerns since the strike has still not come to an end. Overall, the interest for physical gold has been quiet despite the lower prices with the exception of Japan, which saw an escalation in demand for the shiny yellow metal before the nation’s consumption tax rises tomorrow.
Thursday, March 27, 2014
The markets are moving lower this morning with AU, AG, PT, PD down .74%, .71%. 24%. and 2.06% respectively.
The markets are moving lower this morning with AU, AG, PT, PD down .74%, .71%. 24%. and 2.06% respectively. Gold broke below $1,300 based on expectations of rates rising sooner than expected and tensions calming in Ukraine. Next week’s NFP numbers will be scrutinized to give investors a better gauge of the outlook of the U.S. economy. Initial Jobless Claims for the week ending 3/22 missed expectations of 325,000 with a reading of 311,000. GDP (QoQ) is at 2.6% vs. expectations of 2.7%. The Platinum strike has been ongoing for ten weeks with no solution in sight. The mediator met with the union yesterday to discuss bringing the strike to an end.
Wednesday, March 26, 2014
New Home Sales fell 3.3% in February with a reading of 440,000. People are feeling optimistic about the economy as seen by yesterday’s Consumer Confidence result of 82.3 vs. expectations of 78.6. Gold is seeing light support as a safe haven appeal, but the gains are short lived as the overall sentiment for the metal is bearish amid expectations of rising rates. Physical demand for gold remains very weak despite the lower prices. The Palladium situation seems to be somewhat easing and the metal is trading 1.53% on the downside this morning. Core Durable Goods Orders for February are up .2% vs. January’s .9%.
Monday, March 24, 2014
We continue to see pressure on gold this morning as expectations of rising rates have been lifting the U.S. Dollar.
We continue to see pressure on gold this morning as expectations of rising rates have been lifting the U.S. Dollar. According to Richard Fisher, the president of the Federal Reserve Bank of Dallas, the asset buying program should be completed by the end of October. James Bullard, president of the Federal Reserve Bank of St. Louis, believes Janet Yellen’s remarks in regards to when we can expect to see rates rise after QE was in line with market expectations. Gold dropped 3.5% after the Fed’s announcement last week as talks about rising rates are bearish for the metal. Silver continues to follow gold’s slump and is currently trading approximately 1% on the downside this morning. Palladium continues to spike hitting a high of $802 in overnight trading due to supply concerns arousing from the ongoing strike in South Africa and tensions in Ukraine.
Friday, March 21, 2014
Gold started the morning trading $20 on the downside, but reversed some of its losses once Obama announced he was going to impose sanctions on individuals along with “key sectors” of the Russian economy in response to the annexation of Crimea. Obama calls for the people of Ukraine to determine their own destiny and maintain healthy relations with whom they choose. The shiny yellow metal has the potential to see some upside with the Ukraine tensions escalating. Overall, the long term predictions are that gold prices will tumble amid expectations of rising rates. Any positive economic data at this point is bearish for gold. The Palladium situation keeps getting tighter and tighter! The situation in South Africa and sanctions on Russia is making the markets nervous. People are hoarding the metal amid uncertainty and fear. Palladium has hit its highest since Aug 2011 and is currently trading 2.8% on the upside.
Wednesday, March 19, 2014
Gold continued tumbling from its six month high amid speculation that the Fed will continue tapering and Putin’s words of not wanting to split up Ukraine.
Gold continued tumbling from its six month high amid speculation that the Fed will continue tapering and Putin’s words of not wanting to split up Ukraine. As far as the strike goes at the Platinum mines, well nothing has changed. The strike has been ongoing for over 7 weeks and the AMCU is still demanding higher wages. The union members want wages to be increased to 12,500 RAND within a three year horizon. These demands are unrealistic as per the companies and thus both sides remain at a standstill. Today is Janet Yellen’s first press conference after the FOMC Statement comes out at 2:00 pm. The central bank is expected to continue its reduction stimulus program and give us more information on forward guidance. Investors will be listening carefully for any clues of when the Fed plans to raise interest rates. Since the safe haven buying has been fading, gold’s movement should be driven more by the state of the U.S. economy.
Tuesday, March 18, 2014
Clearly, the tensions in Ukraine are not over and it will probably be some time before we can turn away from the topic.
Clearly, the tensions in Ukraine are not over and it will probably be some time before we can turn away from the topic. Investors are wondering if we will see gold make a bull run to 1400 or if the turmoil has been priced into the market already. Richard W. Fisher, president of the Federal Reserve Bank of Dallas argues that the Fed needs to be more aggressive on its pullback to avoid any asset bubbles from forming. As per Yellen, she does not see any evidence or support of such bubbles in sight. After AU made a new overnight low, it reversed its course falling approximately $15 yesterday. Currently, the precious metals market is trading in the red zone as Putin brushed off the sanctions introduced by Europe and the United States. AU, AG, PT, and PD are down roughly 1.5%, 2.5%, .76%, and 1.7% respectively. Core CPI reading for February is .1%.