Thursday, May 23, 2013
Gold took market participants for a wild ride yesterday as Fed Chairman, Ben Bernanke testified before congress. The yellow surged as testimony got underway, fixing at $1408.50 just before a punishing move to the downside that had gold trading in the $1350’s and eventually closing the day at $1367.40. The basic gist of Mr. Bernanke’s comments regarding the future of QE - it depends. A “premature” pull back on asset purchases could have a detrimental effect on the economic recovery but a continued improvement, evidenced by any improvement in future economic data, could signal that it’s time to pull on the reigns. The tapering of QE3 could come as early as the next few FOMC meetings, or not. If past benchmarks are still truly benchmarks – inflation and unemployment – unless the economy can somehow get that 7.5% unemployment rate down 1% in the next few months, it’s unlikely we’ll see an end or a significant decline in the rate of asset purchasing by the Fed. Where does this leave us? Pretty much where we left off before the Chairman’s rhetoric...both in our knowledge of QE’s future and gold’s price. Gold closed Tuesdays session at $1377 and was relatively unchanged before 10:00 AM Wednesday. The yellow metal now trades just a few dollars higher at $1383. Chairman Bernanke would make a great weatherman…”it might rain tomorrow, but it might not”. Elsewhere in the financial landscape equities are taking some heat this morning following not-so-good data out of China. The world’s second largest economy saw its manufacturing PMI index slip into contraction territory for the first time in seven months pushing world markets into negative territory for their respective sessions. The Nikkei took a 7.3% haircut and now the spillover effect has US markets in the red early on. PGMs are under some pressure following the dismal data, platinum is off more than $10 while palladium trades at $739…more than 1.5% off to start the day.US first time unemployment claims fell by 23K last week but we’ll have to wait until June 7th to get a better view of the jobs picture here in the states. Have a great day.
Wednesday, May 22, 2013
Monday, May 20, 2013
The yellow metal continues to feel the weight of better-than-expected consumer confidence data from the University of Michigan survey that was released last week. The survey showed the confidence index rising from 76.4 in April to 83.7 in May, lending support to the greenback and pushing gold to close lower yet again. Gold ended last week at $1364.70 and now sits ~.75% lower to start the day, now trading at $1354.20. A few Fed Heads will grace us with their opinions, and do their best to confuse us as to what exactly the FOMC’s stance on the future of QE actually is, over the next few days. The most important of those, Mr. Bernanke, will hold court on Wednesday as market participants await the release of the most recent Fed meeting minutes due out the same day. The PGM complex is lower to start the week as well but as the mining industry in South Africa heads into a period of wage negotiations, it’s likely that heightened tensions in the region could provide, at the least, a cushion to the downside. It seems the general consensus is that the wage increases that will be requested by the NUM and AMCU are likely to be a difficult, if not impossible, pill to swallow for the major mining companies who have been dealing with a number of issues including lower metal prices and increased mining costs. Have a great day!
Tuesday, May 14, 2013
There is very little news today. The only real interesting headline is from Appaloosa Hedge Fund President David Tepper telling CNBC that he’s still bullish on stocks and investors shouldn’t worry about the US Fed tapering its massive bond buying program. This is really the first time that an influential hedge fund manager is telling investors that the tapering of QE will not cause a significant sell off in the US stock markets. I think the fate of the commodities will be quite different when the Central Banks does end QE and start raising interest rates. Gold, silver, and platinum are still range bound today but palladium made an breakout move above 725 on above average volume. We would buy the dips and sell the pops in these seesaw markets. Have a wonderful day.
Friday, May 10, 2013
The seesaw in the commodity market continues today as the whole complex is lower on the back of the stronger US dollar against the Japanese Yen and Euro currency. Not much news in the market today. There are 2 camps out there when it comes to gold, those that think the stronger dollar and an early end to QE will drop the gold price significantly lower and those that believe the FED and Central Banks will be in the QE game for the foreseeable future and are keeping their gold position as a hedge. Forget the other “noises” when it comes to shortage of metals and labor situations in South Africa since metal prices have been hijacked by funds and other trading houses actively trading their positions causing wild swings in PGM prices. Any metal shortage is temporary and we have seen plenty of physical metal in the market place. In the absence of stronger economic data out of China and Euro Zone, we expect to see lower PGM prices once it breaks the recent trading lows. We see a short term bounce back in gold and silver prices until we can confirm the dollar strength is for real.
For those heading over to London for PT week, have fun and be safe.
Thursday, May 9, 2013
NEVER BEFORE SEEN ENHANCED UNCIRCULATED FINISH AND
COVETED REVERSE PROOF FINISH IN ONE EXTRAORDINARY SET
Celebrating the 75th Anniversary of the esteemed WEST POINT MINT!
This product will not ship until June 28th. Please do not add anything else to your order for this item because it will delay the shipment until June 28th.
These historic Silver Eagle coins have the most collector appeal of any coins released in the twenty seven year history of the series. The market for Silver Eagles continues to grow at a fast pace ... probably faster than any other coin series at the moment. In March 2013 a 1995 West Point Silver Eagle sold at auction for a record $86,654. Several other Silver Eagles regularly command prices of $4,000 to $10,000 at auction when certified in the highest grades MS70 or PR70.
Description: 2-coin set with U.S. Mint certificate of Authenticity
• 99.9% pure silver
• Date: 2013
• Diameter: 40.6 mm
• Thickness: 2.98 mm
• Mint: WestPoint
• Original U.S. Mint packaging
U.S. initial jobless claims numbers will make it difficult for gold to break out of its range bound trading on the upside while physical demand out of Asia cushions the downside despite continued ETF liquidation. Jobless claims shrunk to just 323,000, the lowest level in more than 5 years, beating expectations of 333,000 and remaining below the 350,000 mark that somehow has become the threshold between a good and bad job market. Gold closed Wednesday’s session at $1473.70 but now trades at its low for the day, $1460 (down nearly 1%). The rest of the precious complex is also in negative territory to start the day as the jobless claims numbers will only lend support to the equity market rally. DJIA closed Wednesday at 15,105! Platinum is barely holding on to the $1500 level after closing yesterday at $1504.90. The white metal reached as high as $1512 overnight but was unable to sustain those levels. 10:00 am will bring about wholesale inventories. Have a great day!
Friday, May 3, 2013
The precious complex is relatively unchanged following the release of April Non-Farm Payroll data that showed 165,000 jobs being added and the unemployment rate falling to 7.5%. However, before we all bust out our kazoo’s and party hats we must take into consideration that many so-called “experts” feel that ~250,000 jobs per month – on a consistent basis – is what should be “expected” in a recovering/healthy economy not to mention the Labor Force Participation Rate remains at a 35 year low! Nonetheless, market participants will take what they can get but just because the data may prove to be short-term positive for equities it shouldn’t necessarily correlate into pressure on other assets such as the precious metals. Gold has the backing of ultra-accommodative monetary policy based on recent decisions by the Fed and ECB and should maintain a firm footing at current levels to close out the week. The yellow metal now trades at $1464, just $4 off yesterday’s closing levels. Silver is up .4% to start the day. The PGM’s, that have found support from recent auto sales figures are also little changed from yesterday’s close. Platinum did manage to make a push higher, to ~$1519 in the overnight hours but has since given back ground and now trades just under $1500. Palladium crossed the $700 threshold but was unable to maintain and has since fallen back to $694. Factory orders and a service-sector index will round out the day’s economic data. Have a great day and an even better weekend!
Wednesday, May 1, 2013
Gold off nearly 1.5% ahead of the FOMC announcement that will be released later this afternoon. Lack of activity from many global markets, due to holidays, and better than expected consumer confidence data seem to have made the case for investor involvement in the equity arena to start the month. However, with the general consensus pointing to a continuation of QE and this morning’s ADP numbers missing the mark, it is modestly perplexing as to why the yellow metal is under so much pressure. ADP data showed just 119,000 jobs added to the private sector in April, well off the 150,000 that was expected. The all-important Government Non-Farm Payrolls will be released on Friday and a miss on weekly jobless claims tomorrow, coupled with the ADP whiff today, could have market participants putting one foot back in the safe-havens ahead of the data. Gold now trades at $1451 after closing Tuesday’s session at $1472.10. The rest of the complex is also under pressure following Chicago PMI data that showed the regions manufacturing moving into contraction territory (49) in April after expansion (52.4) in March. Other data coming out today includes construction spending numbers at 10:00 AM. Have a great day!