Very quiet day in the precious metals market as people are traveling to be with their families

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!!!!!!

Home Depot, Wal-Mart, and Target reported their 3rd quarter earnings yesterday.

Home Depot, Wal-Mart, and Target reported their 3^rd 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.

 

It seems to be a gloomy day in the metal markets with AU, AG,PT, and PD trading on the downside.

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!

The DJIA crossed the 16000 mark for the second time this week during intraday trading

 

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!

The metals are trading in the red zone this morning.

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!

A quiet morning in the commodity markets with metals trending slightly lower.

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.   

It is apparent, from recent comments by certain Fed members, that the FOMC remains a house divided when it comes to the topic of stimulus tapering before year-end.

It is apparent, from recent comments by certain Fed members, that the FOMC remains a house divided when it comes to the topic  of stimulus tapering before year-end. However, these circumstances are nothing new as market participants have never really received a definitive answer as the direction of taper talk seemingly changes with the ocean tides. Nonetheless, said market participants are left to ponder the uncertain future and Friday’s staggering NFP numbers remain a thorn in their side, at least until Novembers numbers come out and the true October NFP’s are known. Let’s all just remember the 2.5% inflation and 6.5% unemployment targets set by Chairman Bernanke and his cohorts. Pressure on gold remains to the downside in the near term, at least until Janet Yellen speaks at her confirmation hearing tomorrow.  The PGM’s remain rather subdued despite ongoing labor tensions in South Africa and a report, released by a company that needs no introduction, that forecasts a deficit in Pt in 2014. Have a great day!

Friday’s NFP data quickly thrust the prospects of Fed tapering back into the grey area of economic certainty as 204,000 people were added to the payrolls in October while the unemployment rate moved to 7.3%

Friday’s NFP data quickly thrust the prospects of Fed tapering back into the grey area of economic certainty as 204,000 people were added to the payrolls in October while the unemployment rate moved to 7.3% and labor force participation remained at levels not seen since the late 1970’s! Gold broke through the $1300 support level and closed Friday’s session at $1284.60 while the DJIA rallied to a new record of 15,761.78. The precious complex continues to point lower to start the week but given that U.S. treasury markets are closed for Veterans Day here in the U.S. and the lack of any exciting corporate or economic news, it could be a rather quiet day. Janet Yellen takes the stage later this week but don’t expect any fireworks over anything she might say during her confirmation hearing, investors are focused on Decembers meeting and for now, it’s still the Ben Bernanke show. Have a great day and to those who have served this great nation in our Armed Forces, a very Happy Veteran’s Day to you and your families!

Is it cliché to say, “expect the unexpected”?

Is it cliché to say, “expect the unexpected”? While yesterday’s unexpected events – The ECB rate decision and US GDP data – weren’t enough to get the metals to break from their stubbornly held ranges, this morning’s release of October Non-Farm Payroll data could change the tone of the markets “wait and see” approach ahead of Decembers FOMC meeting. October job creation came it at net +204K jobs, which makes you wonder if those “polled economists”, who guestimated just 120,000 jobs added, were worried more about what price they should get in on the Twitter IPO than accurately predicating employment figures. However, their prognostications could eventually be acquitted as history has shown we wouldn’t be going too far out on a limb to expect the inevitable downward revision come the first week of December. Unemployment remained at 7.3%. September consumer spending rose .2% but continues to lag behind incomes that rose .5%. at 9:55 am market participants will take in consumer sentiment data.  Gold is down nearly 1.5% from yesterday’s close of $1308.50. Platinum is approaching 1% down on the day but continues to find some cushion to the downside as the National Union of Mineworkers are still on strike at Northam and the AMCU wage talks remain deadlocked. Have a wonderful weekend!

If you are watching CNBC this morning you would think the world revolves around the company Twitter.

If you are watching CNBC this morning you would think the world revolves around the company Twitter. While the media is focused on the equity markets and the Twitter IPO, traders in the commodity market continue to play the range game. Here is a recap of the news this morning:

 

1.       Bank of England kept the interest rate at 0.50% and kept their bond purchasing program steady

2.       European Central Bank surprised the markets by cutting interest rate to 0.25% from 0.50% and signaled that they will keep interest rates low for as long as necessary   

3.       US weekly initial jobless claims at 336k and continuing claims at 2868k

4.       US GDP grew at 2.8% in the 3^rd quarter faster than most estimates

5.       US personal consumption grew at 1.5%, less than expected

6.       GDP price index increased at 1.9%, more than expected

 

ECB is focused on not letting the European economies slip back into recession and pump maximum liquidity into the markets. Lack of inflation and stubbornly high unemployment rates are causing concerns. US economy grew at a faster pace in the 3^rd quarter due to increase in inventory levels but there are underlying signs of weakness from business to consumer spending. Economic and political uncertainty in the US have been affecting business and consumers alike. US job markets are showing signs of life but the real unemployment rate and the quality of the jobs being created are both being debated. After all these data, we are right back at where we started… waiting for more “convincing” data to point us to the direction of the US and global economies and further central bank actions. Precious metals continue to trade in a range, gold $1300-$1325, silver $21-$22, platinum $1425-$1475, and palladium $725-$765. Any attempts to break these ranges have so far been met with stiff counter moves. We anticipate gold and silver to trade slightly lower on continuing debate over US FED bond purchase tapering. Platinum and palladium will move depending on next sets of economic data out of China and Europe with South African mine strike news in the background. We believe traders will continue to trade the ranges and jump heavily into a position once data becomes clearer.

The precious complex is on autopilot today

The precious complex is on autopilot today as there’s little in the way of economic news to get market participants off the sidelines. The atmosphere should be rather calm ahead of the rate decisions by both the Bank of England and the European Central Bank on Thursday. Also on tap for the latter half of the week is 3^rd Quarter GDP data, also on Thursday, and the highly anticipated Government Non-Farm Payroll data on Friday. Just released ISM service sector index posted a 55.4 last month, beating expectations of a slight pullback and coming in a full 1% higher than Septembers reading. Gold is trading .5% lower from Monday’s close of $1314.70, having pushed as high as $1320.60 in overnight trading. The PGM side of the complex remains unfazed by ongoing strike action in South Africa and the potential for more. Platinum is just $6 lower from yesterday’s close and now trades $1450. Have a great day!

The Institute for Supply Management wasn’t about to let market participants ease into the weekend as October’s manufacturing index

The Institute for Supply Management wasn’t about to let market participants ease into the weekend as October’s manufacturing index, released Friday, beat expectations and climbed from 56.2% to 56.4%, a level of expansion not seen in more than two years. The resulting pressure on the EUR/USD relationship held gold to a close of $1313.20. The yellow metal began last week above $1350. The metals complex looks to be starting this week in a rather calm fashion following last week’s bumpy ride. Platinum is in the spotlight this morning as the National Union of Minworkers (NUM)have downed tools at one of Northam Platinum’s mines as of Sunday night. The strike action comes amid Association of Mineworker and Construciton Union’s (AMCU) potential strikes at Anglo, Impala and Lonmin, the world’s largest platinum producers. The white metal has been relatively subdued, trading modestly higher from Fridays close of $1451.90.Factory order data from August/September are on tap for today but arguably more important data, including 3^rd Quarter GDP and October unemployment figures, will greet market participants toward the end of the week. Have a great day!

The Institute for Supply Management wasn’t about to let market participants ease into the weekend as October’s manufacturing index

The Institute for Supply Management wasn’t about to let market participants ease into the weekend as October’s manufacturing index, released Friday, beat expectations and climbed from 56.2% to 56.4%, a level of expansion not seen in more than two years. The resulting pressure on the EUR/USD relationship held gold to a close of $1313.20. The yellow metal began last week above $1350. The metals complex looks to be starting this week in a rather calm fashion following last week’s bumpy ride. Platinum is in the spotlight this morning as the National Union of Minworkers (NUM)have downed tools at one of Northam Platinum’s mines as of Sunday night. The strike action comes amid Association of Mineworker and Construciton Union’s (AMCU) potential strikes at Anglo, Impala and Lonmin, the world’s largest platinum producers. The white metal has been relatively subdued, trading modestly higher from Fridays close of $1451.90.Factory order data from August/September are on tap for today but arguably more important data, including 3^rd Quarter GDP and October unemployment figures, will greet market participants toward the end of the week. Have a great day!

It was a rough day for the precious complex on Thursday as pressure from the currency markets exacerbated the fall-off from Wednesday’s less-than-dovish Fed statement.

It was a rough day for the precious complex on Thursday as pressure from the currency markets exacerbated the fall-off from Wednesday’s less-than-dovish Fed statement. The euro got clobbered as Eurozone CPI  reportedly reached a 4-year low of .7% last month missing estimates of 1.1%. Gold is still feeling some downside pressure to start the day and, after having closed the previous session at $1323.70, now trades $1314. The rest of the complex has bounced modestly to the upside to begin the month. Platinum is perhaps finding some support from the growing threat of strike action in South Africa. The AMCU has reached another wage dispute, this time with Lonmin. In other global economic news, China’s official PMI edged up to 51.4 last month form a 51.1 reading in September. Market participants will take in The Institute of Supply Chain Management October index at 10:00 am and then contemplate which candy they will confiscate from their children when they get home tonight! Have a great weekend!