Thursday, April 16, 2015
Is there really a rebound on the way for the US economy? That is the question that is constantly dogging the precious metals market while traders have their ears perked for any positive sign that may direct the Fed to raise interest rates. This morning group was trading much higher than currently on concerns of Greek default. It is obviously less of a concern for the US investor as they quickly dumped metals on the back of an better than expected Philadelphia Fed Manufacturing Survey. Oddly enough, that was the only truly positive indicator versus what others believe are more important numbers such as Housing Starts, Building Permits and Jobless claims which did little to reaffirm a positive US economy. Where is the rebound? It is in the positive attitude of US business but numbers of late don’t prove it out. The continued underwhelming indicators balanced against the European economic and political back drop leaves the metals trading in current ranges. Unless gold the leader of the group breaks above 1225 we won’t be discussing any major bullish price direction. Tomorrows Consumer Price Index report might be a catalyst to end the doldrums if it shows any major divergence.
Thursday, April 9, 2015
Yesterday’s Federal Reserve announcement was mixed which leaves the market status quo. This has led to downward pressure on the precious metals market. Silver has had the biggest negative reaction trading as low as 16.14 and currently trading 16.21. Silver is down 6% on the week which is either a signal of more to come in the rest of the group or a good buying opportunity for the silver consumers. It almost appears as if the Friday’s Non-farm Payrolls never happened. Todays’ weekly Jobless claims report was slightly better than expectations but not an important factor to shape expectations, unless you are on television and selling the perception that everything is better than the recent more important figures convey. Technically the group looks weak and will remain under pressure. We are back to expecting downward moves to test lower price levels that will be short lived. For the US based market no important economic report is due until next week when we will have the US Retail Sales and Consumer Price Index.
Wednesday, April 8, 2015
Due to the holidays and Spring Break the market have been very slow . The precious metals market received a boost on Friday when Non-Farm Payrolls missed the target by a wide margin. Off at almost 50% less than expectations with lower participation rates you would think that we would see a weaker dollar. However the market believes that all this means is that the Fed will still raise rates only later than sooner. This makes the US dollar and its equities markets the best looking when compare with other markets. After the initial boost which saw gold trade as high as 1225 the metals have seemed to hit a wall and come off due to a stronger US dollar. For today do not expect much action and expect sideways trading for the rest of the day.
Friday, March 27, 2015
The Yemen news yesterday gave a short lived pop to gold. But yet there is something else going. In Asia gold traded as high as 1206. In London and NY it has traded above 1200 only to retreat. Today’s fourth quarter GDP report was a little higher but the annualized was lower than expected which should have been bullish for gold. Reuter’s Michigan Consumer sentiment was slightly higher than expected causing a net zero effect on market direction. The precious metals complex remains under the gun from the expectations of higher interest rates, futures shorts and ETF liquidations. But in the battle of direction it does not seem that shorts hold all the cards as every good dip has been met by buying. The question is who will tire first, the bulls or the bears before a new direction is made clear when the dust finally settles.
Friday, March 20, 2015
No news today of import and precious metals are still testing to the upside. Though recent comments by the Fed were gold bullish the market is still confident on the US economy so they are cautious on putting on a gold long position. Still we can expect attempts to test a 1190 with a target of 1210 for the gold price. The rest of the complex should benefit on any upward mobility but for now the train seems to need some more coal in the caboose before this train gets moving.
Monday, March 16, 2015
All the attention this week is on Wednesday’s Fed’s Monetary Policy Statement. Today’s statistics, Industrial Production and Capacity Utilization were weaker than expected but the bears still hold out the confidence that the Fed will change their statement to remove the word “patient”. Removing the word patient will indicate to the bears that interest rates will be raised at the June meeting. But will they use another word to befuddle the market? For now the precious metals have seemed to found a bottom but remain under constant pressure. As the bears sell into rallies they have not been able to complete a total rout of all support levels. Expect precious metals to continue to make attempts to the upside but without any real impetus, as the Greek crisis has been sidelined, for the time being it will be difficult to see any break out from current ranges.
Thursday, March 5, 2015
Netanyahu’s call for tough action against Iran had little effect on the market or the sitting president of the USA. In fact it was received as a ho-hum event by not only the US president but the Iranians as well. Today’s Services Purchasing Managers Index (PMI) released by Markit Economics came out higher than expected which was quickly jumped on by bears as a bullish signal for the economy driving gold down below the 1200 price this morning and the whole precious metals group followed suit. Is this number that significant to warrant the reaction? Probably not and expectations are for it to recover and settle back above 1205 today. If it settles lower, then the bears will have weekend the support and the direction may change. For now the real focus will be the Unemployment numbers coming out Friday.
Monday, January 19, 2015
The precious metals markets remain strong this morning and still appears to be in bullish territory. It is most likely we will continue to see attempts at going higher in gold towards the next resistance of 1308. Supporting the market is foremost the Euro’ identity crisis. Once thought to be a safe haven currency, after the Swiss National Bank debacle of last week and the impending Greek elections that are expected to further undermine its presence in global portfolios, it’s not clear what is next. Additionally, quantitative easing is expected to be the tool most likely to be implemented by the ECB which will continue to undermine its position. The news to watch this week will be, first the overnight report out of China on their GDP and more importantly the ECB’s policy statement on Thursday. Today is Martin Luther King Day in the USA. Banks, Government offices and the stock market is closed. Don’t expect much activity either way today.
Monday, January 5, 2015
The start of the first full week of 2015 is here. This Monday is ringing it in with a bang as the Euro drops below $1.20 to as low as $1.1876. The driver against the Euro is in no small way concerns that the extreme left leaning party in Greece may take control in elections later this month. If they do the belief is twofold that Greece may leave the EU and that they may end austerity measures and not honor previous agreements. On this news funds have also been driven into the gold market driving it back up to the 1200 price level. Precious metals are all green across the board as investment money seeks alternative to Euro based assets. Additionally, US Car sales reports out this morning for the month of December rose topping off a strong year. This will give continued fundamental support to the Platinum group metals. It would appear that we can expect the precious metals to hold current price levels or go higher as the bears for now are in hiding due to the “Grexit” (Greek Exit from EU) threat.
Monday, December 8, 2014
Friday’s very positive US Non-Farm Payrolls up a strong 321,000- surprised the market and rove gold down below $1200 dollars to a low of about 1186 in the spot market. Bears however did not come out to party as may have been expected. With the positive to news driving the US dollar Index to its highest level since 2009 expectations may have been to see gold falter. However, with Central bank’s such as ECB, BOJ and even possibly the PBOC instituting their own quantitative easing in the near future shorts are hard to find. In fact December 2nd CFTC report shows that gold short have declined 28%. Additionally, many traders will be waiting to see the news out of the Euro Zone this Thursday about the use of the ECB’s Long Term Refinancing Operations (LTRO). The data will give a strong indication of when the ECB will be instituting their QE program. A lower than expected number will indicate a need to do so sooner. The PGM’s have been holding their ground in price but rhodium after having lost 6,000 ounces of holdings in the ETF is trading down to 1165. In the USA the only economic number of major importance to watch this week is Retail Sales to be released on Friday.