The precious complex is roaring higher this morning with gold surging to $1450

The precious complex is roaring higher this morning with gold surging to $1450 as yesterday’s reports if strong coin demand in the UK and US was followed by significant physical demand out of Asia in the overnight hours. The yellow metal closed yesterday’s session at $1423.70. Silver is up 4% already while the PGM’s are both up more than 2% to start the day. Reports of potential power supply issues in South Africa could be lending some support but it’s more likely a general recovery across the commodity complex that has the metals in positive territory. U.S. Jobless claims came in less than expected, falling by 16,000 from the previous week but we’ll have to we’ll have to wait another week to see if that number is revised which begs the question…what’s the point? The job’s picture across other parts of the global economy aren’t looking as rosy as unemployment in Spain reportedly reached 27.2%....right up there with Greece. More corporate earnings on tap for today. Have a great day!

Chinese data released overnight showed the PMI index of the world’s #2 economy falling

Chinese data released overnight showed the PMI index of the world’s #2 economy falling from 51.6 in March to 50.5 in April. This put pressure on assets across the financial landscape, particularly the precious complex as the data does not bode well for global growth prospects. Similar data out of Europe isn’t helping the cause either as German PMI fell to 48.8 in April from 50.6 in March, signaling the first pullback in private sector output since November 2012. Platinum is down roughly 1% from yesterday’s close of $1436 while palladium has retreated $10 from the previous session close. Silver is down over 1.5% and gold is down just a few dollars as strong physical demand out of Asia lends a cushion to the downside. In other PGM news, Zimbabwe is mulling over a bill that would require foreign companies to relinquish controlling stakes in locally operated companies, without being compensated for doing so. If the bill should pass it could mean prove troublesome for PGM production. Zimbabwe boasts some pretty hefty platinum deposits, second only to neighboring South Africa. New home sales data is due at 10:00 am EST while more corporate earnings will be released throughout the day. Have a great day!

A much different start to the trading week compared to last week’s massive sell-off

A much different start to the trading week compared to last week’s massive sell-off that pushed gold to two-year lows when all was said and done. The yellow metal is up nearly $30 from the previous session close, finding some support after the recent G20 meeting failed to yield any strong objections to Japan’s plan to reflate it’s currency. Asian equities markets were a mixed bag and while European markets found support on the back of Italy finally electing a president, U.S. markets still have to wade through more corporate earnings that have been less than inspiring as of late. Appetite for riskier assets looks to be gaining steam but if the recent IMF spring meeting is any indication of what’s to come it may prove to be a supportive atmosphere for the safe-haven plays in the weeks to come. It seems the general consensus among news sources that covered the meetings is that European policy makers don’t seem keen on doing everything they possibly can to combat slow growth in the region. U.S. existing home sales in march were just reported to be 4.92 million, representing a decline of .6%. That won’t help the cause of today’s equity market participants. The rest of the metals complex is precious complex is starting the week off on a good note. Silver is up more than 1% while platinum and palladium are up omore than .8%. have a great day!

Gold looks to have found a foothold above $1400 for the moment after

Gold looks to have found a foothold above $1400 for the moment after spending much of the week struggling to break through that level after the recent historic sell-off. The overnight session had the yellow metal reach as high as $1424.70 before retreating, indicating there’s still a healthy amount of uncertainty in the market. Reports of decent physical demand aren’t all too surprising and coupled with Germany induced EUR strength and a two-day downtrend in the equities arena, gold now trades around the $1407 mark heading into the end of the week. The rest of the complex looks to be following suit as silver is up .75% from yesterday’s close. Palladium is up .75% as well, now trading ~$675. Platinum is odd man out at the moment but only down a modest .10%.The G20 meeting in Washington wraps up today so developments from that shindig will be eyed closely. Have a great weekend!

 

It’s hard not to view current levels as a good buying opportunity, particularly after such a sharp correction.

It’s hard not to view current levels as a good buying opportunity, particularly after such a sharp correction. However, the shorts that piled in on the move downward, especially in gold, are finding some resistance to the upside as they look to cover up. While the precious complex is off its lows from overnight there still seems to be some downward pressure as equities continue to defy gravity and concerns of global growth weigh on commodity market participants. With a relatively quiet day on tap, from an economic data standpoint, it would make sense that investors take a breather and reassess the situation. The Fed will release the Beige Book, a reading on the present condition of our economy, at 2:00 PM EST but it’s not expected to reveal anything new. We’re still early into the corporate earnings season and while some reports may have already disappointed there’s still plenty more that could support a push further into record territory. Have a great day!

First and foremost, our thoughts and prayers are with all those who were affected by the tragic

Good Morning,

First and foremost, our thoughts and prayers are with all those who were affected by the tragic events that took place during yesterday’s Boston Marathon.


The precious complex is looking to recover from one of the sharpest sell-offs in recent memory as long liquidation in gold subsequently turned into heavy shorting of the yellow metal that only exacerbated the historic move lower. The rest of the complex followed in the same direction as silver was roughly 13% lower by days-end an platinum and palladium were lower by more than 6% and 7% respectively. Gold’s identity as a safe-haven, in times of economic uncertainty, was heavily tested yesterday as prices reached a 2-year low and closed out the session at $1361. If you’re looking for any particular reasoning behind the correction you can pretty much pick any of the following or just lump them all together: The FOMC minutes, lower gold price forecasts from big banks, the equity rally, Bank of Japan monetary policy or Mario Draghi’s comments surrounding Cyprus’s plan to sell €400 million in gold. Nonetheless, we’re seeing some interest return to the metals as gold nears $1400 to start the day while the rest of the complex is up nearly 2%. On the domestic economic front, U.S. housing starts topped 1.04 million in March beating estimates of 930,000. The Consumer Price Index gave back .2% from February’s reading of .7%. This is definitely a case for further quantitative easing if you happen to believe that the Fed is still holding steadfast to their inflation target of 2.5% and an unemployment rate of 6.5% before they stop the insanity. Industrial production numbers will follow after the opening bell.  Have a great day!

If you looked at the precious complex this morning and said

If you looked at the precious complex this morning and said “Hey, something’s wrong with the prices” you probably weren’t alone. Unfortunately (or fortunately depending on which side of the trade you were on) the prices were correct. Gold shed more than 6% overnight and touched a low of $1385. Silver took nearly an 11% hit when it ventured as low as $22.92 and both platinum and palladium lost more than 3%. And while many would like to point to one particular catalyst for the sharp correction, it was more of a combination of factors that was just too much for the precious complex to bear. The Fed meeting minutes, the potential sale of €400 million in gold by Cyprus, Wall St. banks lowering gold forecasts and a red-hot equities markets would seemingly have been enough to pressure the metals sharply lower but they held. That is until Friday, when ECB President Mario Draghi commented that profits from any Cyprus gold sale would have to be used for the country’s bailout “Shortfall”. The speculation that such an event could set a precedent for other EU nations, that may find themselves in need of a bailout, quickly sent gold bugs heading for the exits. Then came economic data from the world’s #2 economy, China, that triggered a broader commodity market sell-off overnight. China reported the economy grew by just 7.7% to start 2013, down from 7.9% at the end of 2012. Industrial production also slowed to a rate of 8.9% missing estimates of 10%. The precious metals are slightly off their lows to start the morning but look to remain under a great deal of pressure. Good luck today!

Gold seems to be the proverbial whipping boy this week

Gold seems to be the proverbial whipping boy this week as the yellow metal fights to maintain current levels following a barrage of activity that simply doesn’t favor this particular safe-haven play. Not only did the release of March FOMC meeting minutes indicate potential drawdown of Quantitative Easing by year-end but it was also reported that Cyprus plans to dump €400 million worth of gold. That’s not all! Some big investment banks announced revisions to their year-end forecasts for gold – lower – and to top it off, equities continue to push into record territory. The DJIA closed at $14,802.25 yesterday! However, gold has managed to hold just shy of the $1560 level at the moment. The rally in the equity arena and a strengthening greenback pulled the rest of the precious metals complex lower throughout Wednesday’s session. Overnight, platinum touched as low as $1517 but has since recovered to the $1532 mark. Palladium explored lower as well, reaching $714 before rebounding slightly above yesterday’s close of $720.85. U.S. first-time unemployment claims dropped by 42,000 to 346,000 requests, lending support to the notion that the domestic economic conditions are improving. Retail sales numbers will look to add support of their own when they are released later today. Meanwhile, more quarterly results will look to keep stocks on their meteoric rise. Have a great day!

This just in…The Earth is round!

This just in…The Earth is round! Wait, you all knew that already. How about this: increased risk due to aggressive monetary easing is worrisome and Fed members are concerned that continuing on this path could get “messy”. Ok, so today’s commentary isn’t filled with any great revelations. Due to what we in the trading biz would call “Fat Fingers”, somebody at the Fed pushed the red button – you know, the one that has a sign that says “don’t push the red button” – a little too soon so market participants didn’t have to wait until the usual 2:00 PM release of the minutes and instead were treated to a 9:00 AM release. The jist of the minutes: perhaps we (The fed) should start considering the ramifications of our actions. Does this mean the $85 billion a month spending spree will be scaled back? That’s anyone’s guess but considering employment and inflation targets are not within striking distance it’s unlikely it will be scaled back any time soon. Nonetheless, the chatter of a QE pullback has anyone who got caught with their hand in the precious metal cookie jar on Tuesday getting the added pleasure of having that hand crushed by the lid this morning. Short covering yesterday pushed the precious complex northward with gold, silver, platinum and palladium closing their sessions at $1586.70, $27.881, $1553.10 and $733 respectively. Gold has given back nearly .75% of those gains in early trading, silver is down to $27.675. Platinum is of more than 1% and palladium is the big loser, now trading $714 (down 2.5%). In other news, President Obama will release his budget proposal for 2014 in an attempt to bridge the grand-canyon size gap between his administration and the Republicans over government spending. Despite the precarious position of the domestic economy, the DJIA is up nearly .5% to start the day. Have a great day!

 

It could be a relatively quiet day for the precious complex

It could be a relatively quiet day for the precious complex with little in the way of economic reports to spark activity in either direction. Chinese inflation data released overnight showed that citizens of the world’s #2 economy paid just 2.1% more for goods and services in the month of March compared to February’s 3.1% increase. This has alleviated concerns of tighter monetary policy in the country, for the time being, and has lent support to the broader industrial commodity complex. However, focus has shifted back to the U.S. front as first-quarter earnings season commences. The Fed will release last month’s minutes tomorrow but with current benchmarks - inflation and unemployment targets- still far from being met, whatever is in those minutes probably won’t surprise anyone. Gold is little changed from yesterday’s close at $1572.50, up just a few dollars to $1575 at the moment. Silver is roughly .75% higher on the day, up about $.20 from yesterday’s close at $27.138. platinum and palladium are little changed from the end of yesterday’s session as well. Have a great day!

After the lousy US March employment data (gain of only 88k) ...

After the lousy US March employment data (gain of only 88k) and slight dip in unemployment rate to 7.6%, we saw a rally in commodities on Friday. The rise in commodities was a result of the weakening US dollar and traders stopping out of their short positions. With the recent declines in gold (second quarter over quarter decline) and silver (20% decline into bear market territory), traders were piled into the short side of the trade. It will be difficult for industrial metals (PT, PD, and AG) to climb out of their recent declines without a major pickup in global economies, especially China. Chinese government continues to cool their housing markets as bubbles are forming in secondary and tertiary cities around China. The Bank of Japan decided last week that they will take their last stand against deflation by entering into unprecedented bond buying frenzy in trying to achieve an inflation target of 2%. The BOJ continues to be follower of the US FED and ECB when it comes to bond buying without regards for the risk and reward of these programs. After years of QE, US economy is growing at an anemic pace with stubbornly high unemployment rate and European economies are in recessions, so what can the Japanese be expecting? It is increasingly a race to devalue global currencies to try to compete for the dwindling global business. European austerity plans are also causing painful economic contractions. We have entered a point of no return in the global QE strategy, now the question comes when can global economies stand on its own without stimulus… can we all live within our means even if it means we can only afford Hyundai and not BMW?

In honor of the start of the MLB season…”Striiiiiiiiiiiiike Three!

In honor of the start of the MLB season…”Striiiiiiiiiiiiike Three!”. U.S. non-farm payrolls struck-out looking on expectations that the economy was going to add 190,000 jobs to end the first quarter of 2013. The actual number is about 102,000 lower at 88,000 and although the unemployment rate dropped to 7.6% I think we all know it’s not because the unemployed are suddenly finding jobs but, rather, they are giving up the search. This begs the question, what’s the point of printing all this money - $85 billion a month!- and lowering interest rates to make homes more affordable if the people who are supposed to be buying those homes can’t even get a job let alone one that pays enough to afford a home, even with a 3.75% 30-year fixed rate? I digress. The disappointing jobs numbers were the last of three disappointing readings on the state of U.S. employment and it’s not making market participants feel all warm and fuzzy this morning. The precious complex, after having taken the role of the proverbial “falling knife” over the past few days, has suddenly found some support, with the exception of palladium. Gold is up 1% after closing Thursday’s session at $1552.40 while silver has pushed back above the $27 mark, up nearly 1.5% to start the day. Platinum bounced off a low of $1512.20 and now trades at $1529 while palladium continues to get squashed under the weight of dismal global growth prospects. Palladium is down roughly 1% after closing yesterday’s session at $725.45. If there ever was a time to move to higher/safer ground this would most likely qualify as a good time to do so. However, investor confidence has seemingly been impermeable as of late and with the recent jobs data virtually guaranteeing more money printing, it wouldn’t surprise me if the equities markets set another record. Market open is just moments away…hold on to your hats! Have a great weekend!

It’s a Central Bank kind of day today with the Bank of Japan taking the spotlight..

It’s a Central Bank kind of day today with the Bank of Japan taking the spotlight as the country takes aggressive measures to fight deflation and achieve Prime Minister Shinzo Abe’s mandate of 2% inflation. The European Central Bank and the bank of England left their rates alone, .75% and .5% respectively.  It’s been reported that the BoJ is looking to purchase long-term government debt stretching up to 40 years in maturity. The announcement of such an aggressive stance seemed to have caught market participants off guard. As the yen came under pressure so too did the precious complex as the greenback strengthened sharply against both the yen and the euro. With the entire precious complex in negative territory it’s palladium that’s taking the biggest beating as the metal currently trades more than 2.5% lower from yesterdays close. The announcement by the BoJ was expected to be supportive of yet another push higher for equities when the bell rings today. Unfortunately, yet another reading on U.S. employment may have sapped any hope of that happening. First time unemployment claims jumped 28,000 to 385,000 last week, surpassing the 345,000 estimate. The dismal report comes just a day after ADP reported unflattering private sector jobs data and a day ahead of the all-important government jobs numbers due out tomorrow. Have a great day!

The precious complex took a hit on Tuesday as positive data in the U.S..

The precious complex took a hit on Tuesday as positive data in the U.S. session helped the equities arena continue its trend of setting fresh record highs. The Dow reached as high as 14,684 and managed to close at yet another record of 14,579.  After having closed Monday’s lackluster session at $1600, gold finds itself trading roughly $30 lower mid-week as a risk-on sentiment persists despite the terrible economic conditions in the Eurozone. U.S. auto sales helped buoy platinum and palladium as GM and Ford both reported a 6% increase in March sales. Chrysler was not far behind with a 5% increase. ADP’s private sector jobs data could have investors taking a breather today after reporting only 158,000 jobs were added last month. February jobs numbers were revised to 237,000 but today’s numbers missed an even more conservative mark of 197,000 that was forecast. The more important and heavily anticipated Government jobs data will come out on Friday.  Have a great day!