Thursday, December 5, 2013
It was an interesting day yesterday as stocks were trading on the downside and precious metals rallied.
It was an interesting day yesterday as stocks were trading on the downside and precious metals rallied. We saw conflicting economic reports- ADP Payrolls Report showed that 215,000 private-sector jobs were added, but the ISM Non-Manufacturing PMI of 53.9 had the weakest reading since July. The ADP report signifies that a strong job report is likely to be seen on Friday, but the ISM indicates that businesses and consumers are cautious about their spending habits. Gold had a knee jerk reaction yesterday in response to the ADP report and fell 5 bucks but reversed losses due to a short covering rally and greater global physical demand. The PGMS found support as money came out of stocks and went straight into gold. According to the Federal Reserve’s Beige Book Report, the economy is expanding at a “modest to moderate pace”. If Friday’s job numbers are sturdy, the Fed could begin tapering as early as December. This week’s initial jobless claims fell to 298,000 vs. 325,000 forecast. Gold is back to trading on the downside as the short covering rally is over and tapering fears are kicking in. The Fed’s policy-setting meeting is set to take place on Dec 17-18th and the National Union of Mineworkers and Northam PT are having their meeting on Dec 5th to settle their ongoing minimum wage dispute. Have a wonderful, wonderful day J
Wednesday, December 4, 2013
U.S. car sales increased by 9% in November compared to last year, due to their promotional tactics. Detroit’s Big 3 reported better than expected U.S. auto sales for the month of November. Sales for GM, Ford, and Chrysler (a unit of Fiat) rose by approximately 14%, 7%, and 16% respectively. As a result, PT & PD saw a boost in prices. If the auto industry continues to do well, PD should see some significant support. Gold hit a new five month low this week and continues to lose its ground even though it was able to break through its $1,220 resistance level. Silver seemed to follow gold’s path yesterday since it failed to see an uptick despite news of an increase in Indian AG imports. If gold trades below the $1,200 support level, it could hit a new yearly low and probably spur some physical buying. Economists believe the shiny yellow metal could test this level if Friday’s job number hits the 200,000 mark since positive economic data triggers tapering fears. There is a good chance we could see this happen since the U.S. Economy added 215,000 private-sector jobs in November, according to the ADP National Employment Report. Stay tuned for the New Home Sales at 10:00 a.m.
Tuesday, December 3, 2013
The precious metals are all trading slightly on the downside today. Yesterday’s ISM Manufacturing PMI for November was better than October’s results. The ISM Manufacturing PMI for November was 57.3 compared to October’s figure of 56.4. Gold broke new trend support levels after this positive economic data was released. The overall sentiment for gold remains to be bearish as investors expect a further decline in the yellow metal. Any positive economic data released from now until Friday signals that tapering is bound to occur putting pressure on gold prices. Economists believe the strong ISM number is due to better housing and construction data along with stronger exports data. Physical demand for AU has been very light due to expectations of a further price drop. Let’s see what tomorrow’s ADP Nonfarm Employment Change is as this is a good predictor of what Friday’s Nonfarm Payrolls will look like. Have a great day!
Monday, December 2, 2013
If you turn on the TV or pick up the paper, all you see is headlines about Black Friday. Wal-Mart, Macy’s and J.C. Penney saw decent store traffic by opening up on Turkey Day, but perhaps doing so may have cut into Black Friday sales! Total Online Sales (YoY) grew about 19.7% on Thanksgiving Day and ~19% on Black Friday. According to an IBM survey, purchases via mobile devices increased by 40% compared to last year. The overall sentiment is that it is supposed to be a good year for retailers as there are still 23 more shopping days left for Christmas! The stock market had a great November with the DJIA and S&P 500 near record highs. Bulls expect stocks to perform even better in December. Precious metals are currently trading on the downside this morning. Gold saw a drop on speculation a stronger U.S. economy could signal tapering to occur as early as December. I guess we will have to wait until Friday when the Nonfarm Payrolls data comes out to determine if the Fed will begin paring its asset purchase program. For those of you who didn’t get to do any shopping this weekend, stay close by your computers for Cyber Monday J Have a great day!
Wednesday, November 27, 2013
Very quiet day in the precious metals market as people are traveling to be with their families for Thanksgiving. The metals are trading on the upside this morning as the dollar moved lower. The October Consumer Confidence index of 70.4 was lower than the forecast of 72.9. Gold saw a slight boost right after this data was released. Technical analysts believe to see a further drop in the price of AU as long as it continues to trade below the $1300 mark. China is expected to supersede India as the largest AU consumer of the year since the Reserve Bank of India (RBI) introduced the rule that 20% of imported gold must be exported. Core Durable Goods Order (MoM) fell .1% and the Initial Jobless Claims of 316,000 was better than the expected forecast of 330,000. Market activity is expected to pick up next week as there is more data to keep an eye out for. Happy Thanksgiving!!!!!!
Tuesday, November 26, 2013
Home Depot, Wal-Mart, and Target reported their 3rd quarter earnings yesterday. Although the retailers are doing better than last year, they are still not performing as per expectations. Realtors believe yesterday’s Pending Home Sales (MoM) were down .6% due to the government shutdown. Gold prices were down Monday morning after news about Iran halting its nuclear activity was released but bounced back up in the afternoon due to short covering and options related buying. All the metals with the exception of PD are trading on the upside today. The AMCU (Association of Mineworkers and Construction Union) have postponed talks about a possible strike over wages and will bring the topic back up for discussion in January. The Consumer Confidence numbers come out at 10:00 a.m. today. Other than that, it’s expected to be a quiet week in the markets as people are getting ready for Turkey Day.
Monday, November 25, 2013
It seems to be a gloomy day in the metal markets with AU, AG,PT, and PD trading on the downside. Earlier this morning Iran and six major powers agreed for Iran to halt its nuclear program. As a result, oil prices have declined and the dollar is on the rise this morning. Gold fell approximately 1% after the Iran deal was sealed and continues to face downward pressure as investors are concerned that the Fed could begin tapering as early as next month. The next support level for gold is at 1209.40. As you can see the overall sentiment for gold is bearish and investors continue to pay close attention to key macroeconomic data. The short term relative strength index indicates an oversold market for AU & AG. Pending Home Sales (MoM) figures come out at 10:00 a.m. and we are just 3 days away from Turkey Day!
Thursday, November 21, 2013
The DJIA crossed the 16000 mark for the second time this week during intraday trading, but fell .4% after the Fed minutes were released yesterday afternoon. Officials have indicated that tapering is coming in the next few months if economic data meets expectations. Investors are not concerned if tapering is coming, but are more concerned of when it will indeed happen. St. Louis Fed President James Bullard mentioned a solid November jobs report would increase the possibility of the Fed paring its bond purchases at next month’s meeting. Gold hit a four month low of 1,240.69 yesterday as nervous investors were in a sell off mode. Silver fell through its $20 level after 3.5 months putting additional pressure on the metal this morning. Platinum hit a new one month low yesterday of 1391.70. The PPI (MoM) for October fell .2% and the initial jobless claims fell by 21,000 with a figure of 323,000 from the previous week’s claim of 344,000. Palladium is the only metal trading in the positive territory at the moment. Have a great day!
Wednesday, November 20, 2013
The metals are trading in the red zone this morning. Gold fails to trade in the positive territory despite Bernanke’s dovish comments last night at the National Economics Club Annual Dinner. Although the economy has improved since the recession, Bernanke mentioned it is far from where officials want it to be and thus, it will take time for monetary policy to return to normal settings. Since the announcement of the asset purchase program, unemployment has fallen .8 percentage point and roughly 2.6 million payroll jobs have been added. The FOMC expects labor conditions to further improve and for inflation to move towards the 2% objective over the medium term. If data supports the FOMC views, tapering shall begin. Until then, the FOMC will keep its policies for as long as needed. Overall, there is currently minimal support for gold due to weak physical demand and a lack of major economic data. Investors will pay close to attention for “surprises” in the Fed minutes, which will be released at 2:00 this afternoon. CPI (MoM) is down .1% for October and Retail Sales (MoM) are up .4% for October. Silver, Platinum, and Palladium are following Gold’s downtrend trading at negative levels of .24%, 1.11%, .68% respectively. Existing Home Sales figures will be released at 10:00 a.m. Have a great day!
Monday, November 18, 2013
A quiet morning in the commodity markets with metals trending slightly lower. Gold and silver tested the $1275 and $20.50 respectively this morning and found decent support on light trading volumes. Global equity markets are also taking a wait and see attitude after the record run up in the US Equities last week on Fed Chairwoman Yellen’s Senate confirmation hearing in which she pledge to continue QE until significant better US economic data. Markets will be waiting for more data later this week on US CPI, retail sales, and existing home sales on Wednesday. Traders will also be watching the FOMC meeting minutes to see if there are any clues about potential Fed tapering talk for December or into 2014. We sense hesitance on the part of traders to commit fresh capital into establishing a new position while metals are treading within the current trading ranges. Thanks.