A very quiet session overnight in the commodities

A very quiet session overnight in the commodities complex with precious metals trading in a tight range. After the release of US personal income(Increase 0.4%) and spending data(Increase 0.3%), gold and silver fell to new session lows of $1645 and $30.60(Down over 2.5%). Chicago PMI number came in at 56.2 which was lower than the expected 60.5. Dallas Fed manufacturing activity came in at -3.4 instead of the expected 8.0. Gold and silver have recovered from session lows since the gold fix. The focus in Europe continues to be on Spain as GDP contracted 0.3% in Q1 and economy falls further into recession. The only bright spot in Europe is Germany as retail sales numbers increased 0.8% month over month and 2.3% year over year. The debate will continue in Europe regarding the impact of economic austerity versus future growth as Europeans protest against their governments. Traders will continue to decipher economic data to see if the US FED will have another round of QE and if the ECB will lower interest rates at the next meeting on May 3^rd. We would be cautiously long gold and silver for the QE play and anticipation of weak US employment data on Thursday and Friday.

 

Metals	Last	%Change	Low	High
Au-Jun	1660	-0.30%	1645.1	1666.5
Pt-Jul	1570.5	-0.30%	1566.3	1578.8
Pd-Jun	678.75	-0.40%	675.60	685.00
Ag-Jul	30.800	-1.95%	30.600	31.445
London	AM	PM	Minor	PGMs
Au	1662.5	1651.25	Rh	1390
Pt	1574	1570	Ru	115
Pd	682	679	Ir	1100
Ag	31.2	DJI	13195.62	-32.69
Currencies
	USD	EUR	JPY	GBP
USD	0	1.3229	0.012522	1.6228
EUR	0.756	0	0.94662	1.2267
JPY	79.86	105.65	0	129.601
GBP	0.6162	0.81517	0.7716	0
Crude Brent	119.06	Comex Copper	383
Crude WTI	104.14	Nat Gas	2.215
*THESE PRICES ARE FOR INDICATION ONLY CALL FOR QUOTES

 

Overnight The Bank of Japan expanded its plan

Overnight The Bank of Japan expanded its plan for government bond purchases by 10 trillion yen after signs of slowing economy. This comes after the US Fed meeting which Chairman Bernanke signaled that more Fed intervention will be on the way if the US economy slips further. S&P cut its rating on Spain by two levels to BBB+ prompted by concerns over growing government debt amid a contracting economy. The 25% unemployment rate in Spain highlights the economic problems in the euro zone economies. The US GDP grew at 2.2% which was weaker than expected. Commodities are all trading higher as the dollar trades weaker against the euro. In light of Fed’s comments on Wed of potential QE in the coming months, we would be long silver on valuation against copper, gold, and palladium.

Metals	Last	%Change	Low	High
Au-Jun	1664.4	0.24%	1651.1	1668.4
Pt-Jul	1574.1	0.25%	1562.7	1579.6
Pd-Jun	682.25	1.43%	667.35	683.75
Ag-May	31.295	0.28%	30.885	31.395
London	AM	PM	Minor	PGMs
Au	1654	1663.5	Rh	1390
Pt	1567	1573	Ru	115
Pd	669	677	Ir	1100
Ag	31.14	DJI	13237.32	32.7
Currencies
	USD	EUR	JPY	GBP
USD	0	1.3257	0.012439	1.6268
EUR	0.7543	0	0.93827	1.2271
JPY	80.4	106.58	0	130.79
GBP	0.6147	0.81489	0.7646	0
Crude Brent	119.72	Comex Copper	382.45
Crude WTI	104.84	Nat Gas	2.186
*THESE PRICES ARE FOR INDICATION ONLY CALL FOR QUOTES

During the last three sessions we have seen an gold make an interesting move

During the last three sessions we have seen an gold make an interesting move. It has traded from a low of $1625  to a high of $1662. The sell off yesterday came on the back of the release of Fed minutes, however the initial losses were entirely retraced by the end of the session. The “fed-speak” reiterated that they would continue to keep short term rates low until late 2014 in order to offer continued support for economic growth. While traders were looking for a hints of the extension of operation twist or another round of QE to help gold regain its bullish accent, it seems that the prospect of low rates coupled with the ongoing Euro zone debt issues has help to move it to the upside. In addition, the higher than expected jobless claims helped put a bid under the market today. At the moment gold is trading slightly below a down trend line at $1663.90. Today’s move gave gold bulls the hope that this trade will not go down without a fight. Should gold trade through and close above the resistance near $1664 tomorrow, we will most likely see a move back to the $1685 -$1700 range.  From a bears perspective, there are significant technical signals that this upside move may just be a short term trend.  The charts show a bearish pennant formation which may result in a selloff in the yellow metal.  If this selloff is extended beyond a few sessions we will see the 50DMA cross below the 100DMA once again.  This is an incredibly bearish signal is known to technicians as the “death cross.”  Today we have US GDP and consumer confidence #’s coming out, which could cause moves in the metals markets.

Several factors have helped cause a rally

Several factors have helped cause a rally in most markets today. There have been rumors that the Chinese GDP data, due out tonight, is going to be quite a bit better than initially forecasted. In addition, bank lending numbers out of China were better than expected. In the US we received better than expected PPI and trade balance numbers and slightly higher than expected initial jobless claims. The markets returned to a risk on trade today with a strong move to the upside in the US, Asian, and European Equities, as well as, all commodities with the exception of natural gas. In the precious metals complex, silver is today’s big mover with a gain of nearly 3%. The newly reignited risk on trade has helped to push gold, silver and palladium through previous resistance. Should this trade be carried into tomorrow’s session there is a good chance we could see the metals trade higher. Silver managed to break through its 100 DMA ($32.11) and now sits less than a dollar below it 50 DMA ($33.35) . Gold looks set to test its 100 DMA ($1685.58) after a very strong close today. Technically palladium looks relatively bullish, however it may run into some resistance in the mid 660’s. Platinum is currently testing resistance at $1607, should it break through we may see a move back to $1625. Traders and investors alike will be looking out for the Chinese GDP #’s tonight as well as the US CPI numbers tomorrow morning. Better than expected numbers should help the metals complex continue its most recent rally. Good luck.

Metals	Last	%Change	Low	High
Au-Jun	1677.8	1.04%	1651	1681.3
Pt-Jul	1607	1.43%	1582.5	1608.7
Pd-Jun	653.05	2.75%	636.00	655.90
Ag-May	32.405	2.79%	31.420	32.580
London	AM	PM	Minor	PGMs
Au	1655.5	1668.5	Rh	1400
Pt	1594	1585	Ru	120
Pd	643	641	Ir	1100
Ag	31.47	DJI	12980.6	175.21
Currencies
	USD	EUR	JPY	GBP
USD	0	1.3188	0.012378	1.5967
EUR	0.7583	0	0.93857	1.2107
JPY	80.79	106.55	0	129.001
GBP	0.6263	0.82596	0.7752	0
Crude Brent	121.66	Comex Copper	372.05
Crude WTI	103.59	Nat Gas	1.986
*THESE PRICES ARE FOR INDICATION ONLY CALL FOR QUOTES