Thursday, June 4, 2015
The Bank of England kept its key interest rate the same this morning and reported the same level of asset purchases.
The Bank of England kept its key interest rate the same this morning and reported the same level of asset purchases. The US Jobless Claims report came in close to expectations. We remain at the status quo level and though there have been attempts to the downside gold for instance is still stuck within the recent ranges. We will need to see a real breakdown below 1176 to see the bears take any stronghold on direction. It seems the market wants to keep trying lower but buyers especially in the New York market view every dip as another opportunity to buy in at discount levels. The US dollar has not moved significantly the last couple of days and most likely is waiting on tomorrow’s Unemployment report to give direction.
Tuesday, June 2, 2015
The US dollar came under some pressure this morning from what appears to be positive numbers for the Euro Zone.
The US dollar came under some pressure this morning from what appears to be positive numbers for the Euro Zone. Their Producer Price Index was lower than expectations while the Consumer Price Index was higher than expected creating a better atmosphere for business in their market. Meanwhile in the USA the Factory Orders report surprised downward -.4% which has added downward pressure on the US Dollar as well. Hence the precious metals are higher today, but guess what the anchor is still down and we are not far from the dock.
Most Important data this week will be this Friday’s Unemployment reports.
Monday, April 27, 2015
Excitement hits the precious metals market this morning as gold climbs from 1185 before 10 am to set the LBMA PM gold price at 1200-. This was preceded by silver making an upward move that may have been perceived to be directed by the poor Markit Services PMI report which missed the mark 1.2 coming in at 57.8, and right fully so indicating that Friday’s Durable Goods report though mixed may be showing signs of weakness. Yet a report by Reuters Friday announces a $1bn gold swap between Venezuela and Citibank which to many traders may be where the unending pressure on the gold market may have been coming from. With that report in tow traders may have felt that the news allows them to change direction and put on new longs. The upward move of course triggers stops making the precious metals climb higher on the move. Today’s settlement prices on the metals are important to clarify whether this is a short term blip or a new trend to the upside is developing. This week’s news to watch for are the FOMC report and Gross Domestic Product both out on Wednesday.
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.