Monday, March 31, 2014
All the metals are trading on the upside across the board with the exception of gold. Silver, Platinum, Palladium up .18%, .85%, and .66% and Gold down .15% . Gold was down approximately 3% in the month of March amid Janet Yellen’s hawkish statement that eroded interest in the non-yielding asset. Yellen will speak in Chicago today and investors will be listening for her stance on rates. Platinum continues to see support due to supply concerns since the strike has still not come to an end. Overall, the interest for physical gold has been quiet despite the lower prices with the exception of Japan, which saw an escalation in demand for the shiny yellow metal before the nation’s consumption tax rises tomorrow.
Thursday, March 27, 2014
The markets are moving lower this morning with AU, AG, PT, PD down .74%, .71%. 24%. and 2.06% respectively.
The markets are moving lower this morning with AU, AG, PT, PD down .74%, .71%. 24%. and 2.06% respectively. Gold broke below $1,300 based on expectations of rates rising sooner than expected and tensions calming in Ukraine. Next week’s NFP numbers will be scrutinized to give investors a better gauge of the outlook of the U.S. economy. Initial Jobless Claims for the week ending 3/22 missed expectations of 325,000 with a reading of 311,000. GDP (QoQ) is at 2.6% vs. expectations of 2.7%. The Platinum strike has been ongoing for ten weeks with no solution in sight. The mediator met with the union yesterday to discuss bringing the strike to an end.
Wednesday, March 26, 2014
New Home Sales fell 3.3% in February with a reading of 440,000. People are feeling optimistic about the economy as seen by yesterday’s Consumer Confidence result of 82.3 vs. expectations of 78.6. Gold is seeing light support as a safe haven appeal, but the gains are short lived as the overall sentiment for the metal is bearish amid expectations of rising rates. Physical demand for gold remains very weak despite the lower prices. The Palladium situation seems to be somewhat easing and the metal is trading 1.53% on the downside this morning. Core Durable Goods Orders for February are up .2% vs. January’s .9%.
Monday, March 24, 2014
We continue to see pressure on gold this morning as expectations of rising rates have been lifting the U.S. Dollar.
We continue to see pressure on gold this morning as expectations of rising rates have been lifting the U.S. Dollar. According to Richard Fisher, the president of the Federal Reserve Bank of Dallas, the asset buying program should be completed by the end of October. James Bullard, president of the Federal Reserve Bank of St. Louis, believes Janet Yellen’s remarks in regards to when we can expect to see rates rise after QE was in line with market expectations. Gold dropped 3.5% after the Fed’s announcement last week as talks about rising rates are bearish for the metal. Silver continues to follow gold’s slump and is currently trading approximately 1% on the downside this morning. Palladium continues to spike hitting a high of $802 in overnight trading due to supply concerns arousing from the ongoing strike in South Africa and tensions in Ukraine.
Friday, March 21, 2014
Gold started the morning trading $20 on the downside, but reversed some of its losses once Obama announced he was going to impose sanctions on individuals along with “key sectors” of the Russian economy in response to the annexation of Crimea. Obama calls for the people of Ukraine to determine their own destiny and maintain healthy relations with whom they choose. The shiny yellow metal has the potential to see some upside with the Ukraine tensions escalating. Overall, the long term predictions are that gold prices will tumble amid expectations of rising rates. Any positive economic data at this point is bearish for gold. The Palladium situation keeps getting tighter and tighter! The situation in South Africa and sanctions on Russia is making the markets nervous. People are hoarding the metal amid uncertainty and fear. Palladium has hit its highest since Aug 2011 and is currently trading 2.8% on the upside.
Wednesday, March 19, 2014
Gold continued tumbling from its six month high amid speculation that the Fed will continue tapering and Putin’s words of not wanting to split up Ukraine.
Gold continued tumbling from its six month high amid speculation that the Fed will continue tapering and Putin’s words of not wanting to split up Ukraine. As far as the strike goes at the Platinum mines, well nothing has changed. The strike has been ongoing for over 7 weeks and the AMCU is still demanding higher wages. The union members want wages to be increased to 12,500 RAND within a three year horizon. These demands are unrealistic as per the companies and thus both sides remain at a standstill. Today is Janet Yellen’s first press conference after the FOMC Statement comes out at 2:00 pm. The central bank is expected to continue its reduction stimulus program and give us more information on forward guidance. Investors will be listening carefully for any clues of when the Fed plans to raise interest rates. Since the safe haven buying has been fading, gold’s movement should be driven more by the state of the U.S. economy.
Tuesday, March 18, 2014
Clearly, the tensions in Ukraine are not over and it will probably be some time before we can turn away from the topic.
Clearly, the tensions in Ukraine are not over and it will probably be some time before we can turn away from the topic. Investors are wondering if we will see gold make a bull run to 1400 or if the turmoil has been priced into the market already. Richard W. Fisher, president of the Federal Reserve Bank of Dallas argues that the Fed needs to be more aggressive on its pullback to avoid any asset bubbles from forming. As per Yellen, she does not see any evidence or support of such bubbles in sight. After AU made a new overnight low, it reversed its course falling approximately $15 yesterday. Currently, the precious metals market is trading in the red zone as Putin brushed off the sanctions introduced by Europe and the United States. AU, AG, PT, and PD are down roughly 1.5%, 2.5%, .76%, and 1.7% respectively. Core CPI reading for February is .1%.
Thursday, March 13, 2014
Silver and gold saw gains throughout the day yesterday amid instability in Ukraine and China. The fear related to China’s corporate debt default is a sufficient reason for investors to take their money out of equities and put it into an asset like gold which is an insurance against risk. We saw gold break above $1,370 setting new support and resistant levels. The panic that was predominately prevalent in the Chinese markets didn’t wreak havoc upon U.S. equities to the extent as expected considering the correlation between the two markets. South Africa concerns have still not faded thus lifting yesterday’s Platinum and Palladium prices .80% and .75% higher. Retail Sales for February are up .3% vs. the forecast of .2%. Initial Jobless Claims for the week ending 3/8 are down 9,000 with a reading of 315,000.
Tuesday, March 11, 2014
Very quiet day yesterday in the markets due to limited news. Platinum, Palladium & Silver traded on the downside yesterday with the exception of gold.
Very quiet day yesterday in the markets due to limited news. Platinum, Palladium & Silver traded on the downside yesterday with the exception of gold. Currently, all the precious metals are trading in the positive territory. Investors are meticulously watching on how long gold will sustain its rally until we see a dramatic drop In prices amid easing tensions in Ukraine. The ongoing chaos continues to lift gold prices this morning based on news that shots are being fired in Crimea. As long as nervousness, uncertainty, and fear exists about the situation, gold should continue to see gains. A negotiation has still not been reached between the AMCU and the three Platinum producers. The Johannesburg Sunday Times mentioned that the weak negotiation skills of the CCMA members made it difficult for the parties to come to terms.
Wednesday, March 5, 2014
The PGM complex is pressing higher this morning as strike action in South Africa’s mining sector continues.
The PGM complex is pressing higher this morning as strike action in South Africa’s mining sector continues. Despite a recent concession by the Association of Mineworkers and Construction Union there is still concern that the impasse between the union and the world’s largest mining companies is far from being resolved. The AMCU has offered to give the mining companies three years to get wages for entry level workers to 12,000 rand, more than twice the pay entry level workers currently take home. However, the demands remain far outside the scope of what many consider feasible. Platinum continues to trade near the day’s high of $1482.70, now at $1480 (+1.3%). Palladium is out-shining the others, up ~1.5 with further support coming from increased tensions in the Crimean peninsula as Putin continues to rattle his sabre. U.S. markets have been on a roller coaster ride as nobody really quite knows what to expect from Mr. Putin. In other domestic economic news, U.S. ADP non-farm payrolls were reportedly up 139,000 in the second month of 2014. The figures missed expectations and don’t necessarily paint a rosy picture ahead of Friday’s all-important government NFP data. The Fed’s beige book is on tap for this afternoon. Have a great day!
Monday, March 3, 2014
Despite the turmoil in Ukraine, equities remained strong on Friday. Investors were moving money out of other assets into the stock market.
Despite the turmoil in Ukraine, equities remained strong on Friday. Investors were moving money out of other assets into the stock market. As a result, gold prices saw a decline since there was a reduction in demand for the precious metal. What we saw Friday is quite the opposite of what we are seeing on the screens this morning! Precious metals are trading in the positive territory this morning with gold up 1.8%. The escalating crisis in Ukraine has pushed nervous investors out of equities and emerging market funds straight into safe haven assets such as the Japanese yen and gold. The shiny yellow metal could continue to see some upside amid geopolitical concerns. Pending Home Sales were up .1% in January vs. 2% estimate. Other than the weather being one of the reasons why the figure missed forecasts, there is simply a lack of homes for sale especially in the West Coast. Have a great day!