Monday, July 29, 2013
A positive start to the week on what could be a rather quiet session heading into the end of the month
A positive start to the week on what could be a rather quiet session heading into the end of the month. However, market participants won’t be able to call it a month just yet as mid-week brings about some pretty important economic data (2nd Quarter GDP and ADP employment data) as well as the conclusion of the FOMC meeting that will begin tomorrow. The trading week will culminate in the heavily anticipated release of the Government’s Non-Farm Payrolls and unemployment rate which, combined with the FOMC rhetoric on Wednesday, could make the end of the week rather interesting. For now, it’s a wait and see atmosphere but it looks like some buying has crept in as last week’s downward momentum may have provided a good buying opportunity for some. Platinum and palladium are the biggest gainers to start the session. Platinum is up nearly 1.5% to $1443 while palladium now trades $733, up more than 1% from Friday’s close of $724. Silver tried to reach bake above the $20 in the overnight hours and did manage to hit a high of $20.20 before retreating back toward last week’s closing levels. Silver has still managed to gain nearly .5% to start the week, no trading $19.865. Gold is up .5% from Fridays close of $1321.50 and now trades $1328. Have a great day!
Monday, July 22, 2013
Gold managed to break above the psychological level of $1300 in the overnight session and looks to be well supported as the greenback feels some pressure amid easing geo-political concerns, particularly from Japan and Portugal. Japanese Prime Minister Abe’s party scored a political victory easing tensions in the country while Portugal’s President has said the coalition government will remain intact for the sake of the €78 billion bailout program. The yellow metal now trades $1321 after spending most of last week searching for direction amid uncertainty surrounding the end of Quantitative Easing. Silver has also managed to break through its psychological level of $20.00 that it failed to breach through much of last week. Silver is now outshining the rest of the metals complex, up more than 4% to its current level of $20.265. Platinum is up 1% to $1446 while palladium looks to be holding last week’s closing levels rather well. Existing home sales are on tap for this morning while more corporate earnings will be reported throughout the week. Have a great day!
Friday, July 19, 2013
It appears we’re in for a quiet end to the week with little in the way of economic news that would cause any significant movement in either direction. Of Course, Chairman Bernanke’s testimony before the Senate yesterday revealed nothing considerably different from his testimony before the House the day prior. Perhaps the most interesting part, with regard to the precious metal complex, came when Mr. Bernanke said he doesn’t really understand gold prices and that maybe the recent declines in gold prices are a reflection of how less worried people are for bad outcomes. The $1300 threshold seems to be the proverbial brick wall for gold at the moment. The yellow metal closed Thursday’s session at $1284 but now trades back above the $1290 mark. Silver closed the previous session at $19.389 but has since moved back north to $19.45 at the moment. Silver is still trying to recuperate from the pounding it took earlier this week. Platinum has pushed higher, now trading $1423 after closing Thursday at $1414. Palladium is the only one in negative territory to start the day but remains supported above the $740, now trading $744. Have a great weekend!
Thursday, July 18, 2013
The precious complex is licking its wounds this morning following yesterday’s sharp selloff amid uncertainty surrounding the future of domestic monetary policy. The “maybe, maybe not” tone of Chairman Bernanke’s testimony before the House Financial Services Committee yesterday, coupled with weak housing data and the Beige Book release, is enough to make a market participants head spin. The Chairman reiterated his previous testimony that monetary policy will remain highly accommodative for as long as needed but that it will have to come to an end at some point. The Fed Head will speak in front of the Senate at 10:00 am this morning and investors will pay particular attention to the Q&A, just in case any new information is brought to light.. As for economic data, weekly jobless claims fell to 334,000 beating estimates of a drop to 348,000 but whatever that may mean for the health of U.S. employment will be qualified when the next NFP numbers are released in just a few weeks. Gold took a $30 hit yesterday before recovering slightly by days end and closing at $1277.50. The yellow metal continues to try and regain that lost ground and now trades $1286. Silver also took a significant hit and continues to trade near yesterday’s close of $19.42. Platinum followed suit and closed at $1411 by days end while palladium seems to bucked the trend by not only holding above the $730 mark but now trading nearly 1.5% higher at $745. Have a great day!
Wednesday, July 17, 2013
Well that was pretty anti-climactic, not that we should have expected anything different, right? Bernanke’s speech was released at 8:30 am just ahead of his testimony before the House FSC at 10:00 am and the lack of any significant movement in the precious complex, in either direction, is most likely due to the fact that the Chairman has said nothing new. There’s a potential for tapering of QE later this year but as unemployment and inflation remain off-target, accommodative policy is here to stay unless economic data gives us reason to believe otherwise but don’t take this as a “preset course” for domestic monetary policy. Confused yet? What’s the over/under on how long it takes for one of his Fed cohorts to disagree with his assessment…again? Anyway, U.S. housing starts won’t help the cause of ending the endless money printing. Starts and permit numbers fell last month, 9.9% and 7.5% respectively. Other than the Bernanke Speaking Engagement in just a few minutes, the Beige Book will be released at 2:00 pm EST. Have a great day!
Tuesday, July 16, 2013
The precious complex continues to push higher in what is expected to be a mildly choppy session ahead of tomorrow’s testimony from Fed Chairman Bernanke. The Fed Head will speak to Congress about the future of monetary policy and given the recent trend of the U.S. Central Bank keeping market participants on their toes, the upcoming rhetoric is proving to be no exception. In economic news, the Consumer Price Index was released this morning and showed an increase of .5% for the month of June. Both the 12 month and core CPI data remain below the Feds 2% threshold for pulling on the reigns of Quantitative Easing. Gold currently trades .5% higher on the back of continued greenback weakness. After closing Monday’s session at $1283.5 the yellow metal now trades $1290. Platinum and palladium are in positive territory despite reports that car sales across the pond hit a two-year low. New auto registrations in the region fell 6.3% for the month of June. Both white metals are up just shy of .5% with platinum currently trading $1427 and palladium now trading $735. Have a great day!
Monday, July 15, 2013
Last night China reported 7.5% GDP, 8.9% Industrial production, 13.3% Retail Sales, and 20.1% Fixed Asset Investment increases year over year. The data paints the picture that the Chinese government wants the world to see; steady fixed asset investment, expected GDP, slightly lower industrial production due to slower global economy, and increased retail sales as China transitions into a more consumer driven economy. We should take these data with a grain of salt and assume the Chinese economy is weaker than expected as the construction surge cools. US retail sales for June were lower than expected at 0.4%(advance retail), 0%(retail sales less auto), -0.1%(less auto and gas), and 0.1%(control group). May retail sales number was also revised down 0.1% to 0.5%. The data paints a picture of the “cautious” US consumer as potentially slowing housing market and stubbornly high unemployment rate are still on the minds of Americans. The tug of war will continue as debates on QE and the timing of the tapering will intensify with every major data point. Gold will continue to try to test $1300 and silver is hovering around $20. The PGMs are gaining a little momentum as platinum hold above $1400 and palladium above $700 on bets that Q3 and Q4 will point to stronger economic recovery. We would lighten up on positions as we enter the summer slowdown and expect less trading volatility. Have a wonderful day.
Thursday, July 11, 2013
Markets have been trading on every piece of news relating to QE and speculation on when the US FED will taper or stop the bond purchasing program. Bernanke further confused the market yesterday when he reiterated the Fed’s intent to keep the bonding purchasing program for the foreseeable future until there is significant improvement in the labor market. The Fed meeting minutes from the June FOMC meeting showed that many members want to see a reduction of QE before the end of this year if the US economy is able to sustain the recovery. A lot of traders were caught short in the commodities and Bernanke’s remarks sparked a short covering rally late yesterday afternoon and today. The higher than expected weekly initial jobless (360k vs. 344k last week) and continuing claims (2977k vs. 2953k last week) data further showed the stubbornly weak employment situation. Metals are trading and trying to hold some key levels: silver broke above $20 and is trying to hold that level, platinum is slightly above $1400 and holding, palladium traded above $725 but was not able to hold there, and gold failed to break above $1300. China slowdown/shift of their economic focus towards consumption, and potential banking issues there will continue to drag down the global economy and cast a doubt about the near term outlook. Unrest in the Middle East will keep oil prices high and hamper global recovery. We expect the debate about bond purchasing programs to rage on globally and throughout the summer. Thanks and have a wonderful day.