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!

Despite the obvious infringement on personal freedom going on in Cyprus

Despite the obvious infringement on personal freedom going on in Cyprus, the situation appears to be rather calm following the re-opening of banks on the island nation. Financial institutions opened their doors for the first time in two weeks, albeit with pretty hefty  capital restrictions in an attempt to avoid a mass exodus of money off the island. Credit/debit limits for transactions abroad are limited to €5,000 a month and only €3,000 in cash is allowed to be taken on each trip out of the country. The precious complex appears steady ahead of the U.S. market open. The safe-haven support in gold has given way to some profit taking ahead of month-end quarter-end book squaring and the yellow metal continues to be range bound.  Silver managed to claw back losses by the end of yesterday’s session, closing at $28.61 following an adventure towards the $28 level. Here in the states, U.S. equities markets will look to close out the quarter on a positive not and while initial jobless claims and a revised 2012 fourth quarter GDP reading won’t help that cause, it’s not widely expected to hurt it either. Jobless claims rose an unexpected 16,000 requests last week and the prior week was revised upward by 5,000 as well. GDP growth for the last quarter of 2012 was revised upward to .4%. Hardly anything to write home about. Have a happy and safe holiday weekend!

In a dilemma with no real positive outcome

In a dilemma with no real positive outcome, it was the lesser of two evils that prevailed. The island nation of Cyprus was able to strike a deal, within hours of an EU imposed deadline, that will help the country avoid financial collapse and potential exit from the European Union. The deal comes less than a week after the initial plan, to tax all deposits up to 10%, was scrapped after widespread backlash to the notion of government takeover of private funds. However, not everyone is getting by unscathed as the new deal will restructure two of the country’s biggest banks, hitting depositors with more than €100,000 on account while shareholders and bondholders of those particular financial institutions will be “wiped out”. The restructuring is estimated to be worth €4.2 billion and will allow Cyprus access to €10 billion from the EU lead bailout fund. European markets were up more than 1% on the news of the deal and U.S. markets are poised to push even higher to start the week. Now that this debacle has been cleared up, it’s back to the political uncertainty in Italy and the budget deadlock in the U.S., which could undermine the euphoric atmosphere we’re seeing this Monday morning. Gold is down .5% after closing Friday’s session at $1606. The rest of the complex is leaning modestly higher. Palladium has managed to regain the $760 mark after falling sharply last week. There’s not much else on tap for the day, which could give those in/around the I-95 corridor some time to contemplate  joining a class action lawsuit against Punxsutawney Phil for his false advertisement of an early spring. Have a great day!

Here are the bullet point of events in the past few days:

Here are the bullet point of events in the past few days:

 

1. US Fed kept their stance on QE and acknowledged economic improvements in housing and employment. Bernanke is looking for sustained improvements in labor market and around 2% inflation for the Fed to adjust pace of QE or to think about exit points.

2. Cyprus continues to search for a deal to avert economic and banking crisis.

3. US weekly initial jobless claims at 336k and continuing claims at 3053k both around expectations and trending lower on average over the past few months.

4. China HSBC preliminary PMI rose to 51.7 showing slight economic expansion.

5. Euro zone PMI all lower from Germany to France showing continuing economic contraction.

6. Japan equity market rides to recent highs as bets are on for more bond buying programs from the new BOJ governor.

 

We expect industrial precious metals to trade lower on global economic uncertainty while gold trades sideways on possible banking crisis contagion in EU. All the actions are in FX and Equities as commodity volumes have been lower in recent weeks.

National Treasures World Bullion Coins Set MS70

National Treasures World Bullion Coins Set MS70.

This six-coin set highlights some of the most popular one-ounce pure silver coins in the world. These sets feature the 2013 silver eagle struck at the West Point Mint. 2013 is the 75th    Anniversary of the opening of the WestPoint Mint and makes this coin one of the most popular in the 27 year history of the series. The Chinese Silver Panda holds the unique distinction of being the coin in the 28 year history of the series to feature three pandas, representing three decades of issue. The Wood Bison is the final coin and most popular design in the “best-selling” Canadian Wildlife series. Only 1 million wood bison coins have been produced. The Mexican Libertad, issued for 32 consecutive years, is the longest running silver bullion coin series in the world. The Austrian Philharmonic  is the best selling silver bullion coin in Europe. It is considered to be the most beautiful bullion coin in the world. Minted in Vienna, Philharmonics are the only bullion coin in the world issued in Euros and are virtually hoarded out of existence by Swiss banks. The final coin in the set is the Australian Kookaburra, regarded as the highest quality silver bullion coin in the world. This coin is struck at the Perth Mint and carries the famous P mintmark. All six coins have been certified perfect MS70 by ANACS.

Please note the image of the  featured set is for  illustrative purposes only. This is a certified limited edition of 4,879. The coin set you will receive could be any number from the limited edition. Should you buy more than one set we guarantee you will receive sets with consecutive serial numbers..

Gold is struggling to break out of a tight range as unemployment data

Gold is struggling to break out of a tight range as unemployment data outweighs the Fed Beige Book data released yesterday afternoon. A day after ADP reported better-than-expected private sector jobs numbers, weekly initial jobless claims show a decline for the second consecutive week (down 7,000) adding further support to the risk-on rally that has equities markets reaching further into the financial frontier. Like Meat Loaf said, “two out of three ain’t bad” and while I have no idea what in the world he was talking about, the third and final piece of the jobs picture will be released tomorrow and that’s really the only piece that matters. Until then, markets should be in wait and see mode. The precious complex is in positive territory to start the day with platinum continuing to test its staying power above $1600 which has proven difficult despite recent happenings in the southern tip of Africa. The white metal is currently trading at $1598. Have a great day!

It’s times like these that I think back to my high school physics class

It’s times like these that I think back to my high school physics class and Newton’s concept of “what goes up must come down”. Now, granted, he was speaking about physical objects and not stocks but the party can’t last forever…never has and never will. Nonetheless, the risk-on herd mentality has stocks poised to push further into uncharted territory. The gold arena has been under pressure as the positive sentiment lingers but the fact that the yellow metal hasn’t sold off even further might be testament to market participant’s reluctance to pop the bubbly just yet and go all-in on equities. The industrials have found some support from the recent move to riskier assets and a perceived improvement in broader economic conditions. Platinum was also supported by a brief strike at Lonmin’s Marikana mine that was over just about as quick as it arose. ADP reported private sector jobs added 198,000 souls to the payrolls but that’s only a piece of the employment picture as initial jobless claims come out tomorrow and the Non-Farm Payrolls number comes out on Friday. Have a great day!