Gold – Silver – Copper Are All Dealing With Lackluster Chinese PMI And The Falling USD

Gold - Silver - Copper Are All Dealing With Lackluster Chinese PMI And The Falling USD
Gold – Silver – Copper Are All Dealing With Lackluster Chinese PMI And The Falling USD

Gold was flat this morning moving between small losses and gains, as trading was very quiet, almost a hush as we ease toward the Federal Reserve meeting beginning tomorrow. Every trader, regardless of small retail traders, institutional traders, Hedge Fund and Pension Fund managers are at the edge of their seats waiting for the end of this movie, which is expected to be a cliff hanger. No one knows exactly what to expect. Gold is trading at 1234.90 up a few points while silver eased to 19.565 down by 40 points after disappointing Chinese manufacturing data hit the wires. Copper remains high above the 3.30 level but in the red by 4 points as the data from China is countermanded by the drop in the US dollar ahead of the FOMC gathering. It looked like traders were taking last minute positions, pushing the dollar back down after it climbed on Friday after strong economic data. Traders remain unsure as what to expect. The week of positive economic data would indicate that the Fed would begin to taper. Mr. Bernanke’s handover to Janet Yellen next month would offset this as he might want to leave this decision to Ms. Yellen. Fed speakers before the blackout all indicated that some sort of tapering might occur at this meeting. GDP soared this prior month to 3.6% while unemployment declined to 7.0% from 7.3% which really pushed the Fed’s into a corner. Inflation remains tame and PPI was a bit disappointing. Retail sales soared above expectations last week. Lastly, the compromise in Washington took care of the budget and the debt ceiling through 2014. What can traders expect on Thursday, no one really knows. Do you care to guess?

As we get closer to year end, traders are trying to book profits and were moving to higher risk assets pushing the stock markets to record level but as the FOMC grows closer they have moved to safety. Gold for 2013 is headed to end the year on a negative note. Blame it on the unending worries with regard to the QE taper that affected sentiments towards precious metals in the international markets or call it the effect of strict restrictions on gold supply in the Indian markets that impacted demand in the world’s top consuming country; overall, gold and silver got pushed into the territory of bears that refused to send the metals back to the bulls, at least in 2013. This year’s annual decline in gold prices will be the first in more than a decade.

Price trend for 2014 will be unfolded with clarity only after the Federal Reserve provides direction and indication towards the pullback in stimulus spending in its meeting scheduled for the 18th Dec’13. World markets are seeing a sense of caution as we approach the Federal Open Market Committee event.

Base metals and industrial metals ended last week on a positive note on the back of declining inventories and demand from China, but this morning’s disappointing HSBC PMI data will weigh on the metals group today, but should be balanced by the falling greenback.   As mentioned above silver and copper have declined this morning along with platinum which gave up $2.00 to trade at 1360.40 while there was a surprising rise in palladium adding 30 points to 717.20 but staying mostly flat following the tone set by gold.

Precious Metal and Industrial Metals Put In A Stellar Peformance

Precious Metal and Industrial Metals Put In A Stellar Peformance
Precious Metal and Industrial Metals Put In A Stellar Peformance

Gold had an incredible run on Tuesday as traders responded to the last public comments by Federal Reserve members on Monday evening. Gold climbed to trade above the 1260 price level and has eased to 1258.70 in the Asian session on Wednesday. Gold has rebounded from a five-month low on Dec. 6 to touch $1,268 yesterday, the highest price since Nov. 20, as signs of increased demand in China and the dollar’s weakness countered expectations that the Federal Reserve is set to pare stimulus. Gold prices gained 2% on yesterday supported by a weaker dollar and short coverings ahead of the FOMC policy meet next week. A pickup in physical demand from China and increased volumes on the Shanghai Gold Exchange also supported gold prices. The US Congress has announced a budget deal for spending cuts and if approved by the Senate, it would end the possibility of another government shutdown in January. Traders can expect Gold prices to move higher today on technical buying and a weaker dollar would also support prices.

Additionally, a declining trend in SPDR gold holdings also could not refrain from prices to trade in positive territory. Funds have been buying to cover short positions ahead of the Federal Reserve’s policy meeting next week. A break above strong resistance at $1,250 an ounce also triggered heavy buy orders. Gold touched a high on Tuesday of 1267 before easing to close at 1260.30. Silver followed the trend moving above the $20 price also and eased along with gold this morning as traders booked profits as silver gave up 10 points to trade at 20.305.

Elsewhere in metals trading, January platinum slipped $5.40, or 0.4%, to $1,383.30 an ounce, while March palladium dipped $1.20 to $737.25 an ounce. High-grade copper for March delivery was flat at $3.26. Copper futures rose to a three-week high on Tuesday, after data showed industrial production in China increased in line with expectations last month. China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.261 a pound during European morning trade, up 0.1%. Comex copper prices raised to a session high of $3.264 a pound earlier, the strongest level since November 24. 

Gold Is Green This Morning

Gold Is Green This Morning
Gold Is Green This Morning

Gold climbed steadily this morning adding $6.50 to trade at 1240.70 as traders now focus on the upcoming FOMC meeting that will conclude on December 18th. There is little data due over the next week as we enter the middle of the holiday month. With the Fed meeting just 7 days away Federal Reserve members will begin this blackout period. There will be no more speeches or comments by the Fed until the conclusion of the meeting. Expectations of a cutback in bond-buying — tapering, in the lingo of the market — grew even stronger in the wake of Friday’s release of robust November hiring data. There remains a good bit of uncertainty what the Fed will do next week because officials who have been supporters of the effort haven’t given any explicit signals what will happen. 

Much of what Mr Bullard said in the text of a speech prepared for delivery before a group in St Louis supports recent remarks of his. The official has long argued that Fed policy is data dependent. Mr Bullard has also underscored that even as the economy’s outlook has improved, inflation continued to undershoot the Fed’s 2 per cent target, and central bankers don’t have a good explanation for why this is happening. Mr Bullard suggested a way the Fed could balance the conflicting performance of the job market and inflation data. “Recent labor market results seem to suggest that coming months will show continued labor market improvement,” Federal Reserve Bank of St Louis President James Bullard said. “Based on labor market data alone, the probability of a reduction in the pace of asset purchases has increased.” 

Gold got off to a shaky start on Tuesday after gaining 1 percent in the previous session, as investors turned their attention to a Federal Reserve policy meeting next week that could provide clues on the outlook for the bank’s stimulus. Markets worry the Fed could decide to begin cutting its $85 billion monthly in bond purchases at the December 17-18 meeting due to recent strong economic data. The stimulus has supported gold prices as it boosts the metal’s inflation-hedge appeal. Gold has lost about a fourth of its value this year on fears the bond purchases would be scaled back.

In comments made on Monday Dallas Fed President Richard Fisher said he will urge his colleagues at the Fed’s meeting next week to begin trimming their bond-buying program immediately. Silver took its clues from gold to gain 87 points rising to 19.788. Global sentiment and the weak US dollar helped industrial and base metals to see gains this morning also with copper climbing to 3.261 well above its recent trading range after rallying on Monday. Platinum gained $1.60 to trade at 1374.55 while palladium added $1.30 to trade at 737.80. The overall metals market and the entire commodities complex is trading in the green this morning.  The US dollar has dropped to 80.06 down by 10 points and looks like it will fall below the 80 mark in today’s European session.

Gold Under The Influence Of FOMC Tapering

Gold Under The Influence Of FOMC Tapering
Gold Under The Influence Of FOMC Tapering
Gold is trading at 1228.00 down by $1 this morning after Asian traders digest US, Chinese and Japanese data. Fed tapering is the word on every traders mind as traders take side, pro tapering and no tapering. Many traders believe the strong US data from last week with the significant drop in unemployment to 7% would indicate that the FOMC will begin a to taper a small amount leading to larger tapering in early 2014. The offside of that is the overall global reaction to “tapering”. Many traders believe that Mr. Bernanke would rather hand off this decision to Janet Yellen when she takes over the reins in January. Silver also eased this morning at 19.508. On Friday Spot silver gained 0.3 percent to $19.566 an ounce. Platinum rose 0.2 percent to $1,361.88 an ounce, climbing for the first time in three days. Palladium was little changed at $734.38 an ounce. Gold slumped 27 percent this year, tumbling to a 34-month low of $1,180.50 in June, on speculation the Federal Reserve will start scaling back asset purchases as the economy improves. The Federal Open Market Committee will probably begin reducing the $85 billion in monthly bond buying at a Dec. 17-18 meeting, according to 34 percent of economists surveyed on Dec. 6 by Bloomberg, an increase from 17 percent in a Nov. 8 poll.

A marketing expert specializing in precious metals said on Sunday that gold prices in the medium and long terms have witnessed an upward trend, noting that the current fluctuating prices represent bottom prices compared to the prices of the first and second quarter of the New Year. Sabaek Al-Kuwait Executive Director Rajab Hamid told Kuwait News Agency (KUNA) gold has witnessed staggered prices at the end of last week with the release of the data of the US labor market, falling to the lowest level to $1,210 per ounce. Hamid said that expectation may be difficult to analysts due to the conflicting views on when the policy of quantitative easing relied upon by the ounce of gold in the previous years would be reduced or eliminated.

Prices may rise modestly in the near-term as gold bulls keep alive the prospect of a later taper since the data has to signal growth that’s strong enough to allow the Fed to cut bond purchases. The short-term positive view for gold is reinforced by data from IG Markets showing 76 percent of clients with open positions expect gold prices to rise. Despite the metal’s apparent resilience in the face of an upbeat jobs number, gold bulls are circumspect.

Tracking a weak global trend, copper prices fell by 0.18% to trade at 3.233 down by 10 points in futures trade today as speculators offloaded positions.  Analysts attributed the fall in copper futures to weak global cues as investors weighed signs of improvement in the US economy against concern the Federal Reserve may start trimming its stimulus sooner than estimated.

 

Industrial and Base Metals Ease While Precious Metals Tumble

Industrial and Base Metals Ease While Precious Metals Tumble
Industrial and Base Metals Ease While Precious Metals Tumble
Gold is trading at 1225.20 easing $6.70 this morning while silver is down 220 points at 19.35. The US dollar has recovered after touching a 5 week low to trade at 80.36. Gold steadied on Friday after choppy trading in the previous session and was headed for a weekly decline as improving U.S. economic data raised fears of an early end to monetary stimulus. Prices fell by as much as 2 percent on Thursday after data showed the U.S. economy grew faster than initially estimated in the third quarter. Gold is headed for a 2 percent weekly drop after falling to fresh five-month lows earlier in the week.

On Thursday the US Commerce Department said the world’s biggest economy grew 3.6 percent in the third quarter, well above the 3.0 percent predicted by analysts. Also, the Labor Department said first-time claims for unemployment benefits, a sign of the pace of layoffs, fell below 300,000 last week. The upbeat figures are the latest pointing to a pick-up in the US economy, raising the prospect of the Fed cutting its monetary easing scheme this month instead of early next year.

 The upcoming labor report is not a definitive signal for a near-term or more distant Taper decision. Rather, this is a big-ticket item that can sway the balance of speculation – arguably a more effective market mover. For splashy headlines and a kneejerk risk response, the NFPs (nonfarm payrolls) number will be the first look. Yet, the real impact comes through the same data that the central bank monitors for its own policy making. The jobless rate – expected to tick down to 7.2 percent.

As expected, gold would make little effort to upgrade its Wednesday rally into a lasting bull trend. With the European central bank meetings ahead of it at the time and now the November US payrolls, there is little room for speculators to fight prevailing trends with a chance that the Fed will see its Taper decision being made for it in key data. The low June close – the lowest in three years – is $1,200. We are little more than $25 off that level.

Industrial metals and base metals continue to trade in the red this morning with copper the only exception remaining flat at 3.22. Platinum eased by $3.40 while palladium fell by $2.50 to trade at 7.3330. Copper swung between gains and losses as investors weighed signs of improvement in the U.S. economy against concern the Federal Reserve may start trimming its stimulus sooner than estimated. Nickel rose for a third day. Yesterday, nickel touched the highest since Nov. 11 and tin climbed to a five-week high after Indonesia, the top exporter of tin and biggest producer of mined nickel, said a plan to ban ore exports will proceed next month.

Federal Reserve Tapering Continues To Plague Commodities

Gold BNSGold gained back $1.30 this morning as traders once again took advantage of low prices to buy up the commodity as the US dollar trades at 80.63 making the shiny metal more attractive to foreign buyers. Gold is expected to sit tight through the barrage of US data due on Wednesday and Thursday and to pay little attention to the Bank of England and the European Central Bank meetings on Thursday. All metal traders will be focused on it Friday’s nonfarm payroll release. Good jobs numbers might encourage the FOMC to begin tapering earlier than expected but both Mr. Bernanke and Janet Yellen has said that tapering would not come until 2014. Mr. Bernanke earlier this year tied monetary policy to unemployment levels, and Ms. Yellen said that she needs to see growth. The US will release GDP numbers this week but they are not expected to be strong enough to move the Fed.  Silver showed a stronger recovery adding 108 points to trade at 19.172 remaining well below its average trading range.

Industrial and base metals saw some supportive data this week primarily from China. The purchasing managers index (PMI) for China’s non-manufacturing sector stood at 56 percent in November, down from 56.3 percent for October, according to official data released on Tuesday. A PMI reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction. The non-manufacturing PMI tracks service, construction, software, aviation, railway transport and real estate among other sectors, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP). China’s manufacturing PMI was 51.4 percent in November, the same as that in October and the highest for 19 consecutive months, showed NBS figures on Sunday. Eurozone combined and individual PMI data also printed in the green but had little effect on metals.

Copper is trading this morning at 3.186 adding 24 points after falling well below its average trading range. The weak US dollar is helping prices but overall there is little supportive sentiment. Analysts said weak global cues as signs the US economy is strengthening stoked speculation that the Federal Reserve may soon start tapering its stimulus, mainly influenced copper prices at futures trade. Yesterday, copper fell on concerns over growing supplies of the metal.

Palladium and Platinum are both trading in the red this morning with platinum slipping by #2.40 to 1355.35 and palladium down by 10 cents at 717.00. China’s manufacturing activity in private and export-oriented companies grew at a slightly slower pace in November while that in state-owned enterprises was flat, a survey showed yesterday. The results pointed to a stable growth momentum in China’s manufacturers, according to analysts.

 

Gold and Silver Take Big Tumble And Look To Continue Down

Gold and Silver Take Big Tumble And Look To Continue Down
Gold and Silver Take Big Tumble And Look To Continue Down
Gold fell to the lowest since July after signs of a strengthening U.S. economy fueled speculation that the Federal Reserve is ready to slow the pace of its monetary stimulus. Gold is trading at 1219.70 this morning as it continues to ease after yesterday’s tumble. Precious metals dropped on Monday, with investors jittery ahead of key U.S. data this week that could provide clues on when the Federal Reserve will begin scaling back its monetary stimulus. Silver is following closely on the heels of gold easing by 94 points in the Asian session to trade at 19.195. Gold lost 27 percent this year, touching a 34-month low of $1,180.50 in June, on speculation the Federal Reserve will start paring asset purchases that drove a 12th annual advance in 2012 as the economy improves. Data yesterday showed that while U.S. manufacturing unexpectedly accelerated in November at the fastest pace in more than two years, retail spending fell on the weekend after Thanksgiving for the first time since 2009.

Gold prices booked their worst November since 1978, as a brighter economic landscape fanned fears of reduced stimulus efforts by the Federal Reserve.  Gold prices dropped 5.5 per cent in November. The declines help put gold on track to end 2013 in negative territory, disrupting a 12-year winning streak that saw the precious metal top price records

In other gold news, Gold output in Australia, the world’s second-biggest producer, expanded for a second quarter in the period ending in September because of higher ore grades, according to mining consultant Surbiton Associates. Sri Lanka scrapped a 100 percent surcharge on gold imports and cut import duty with immediate effect, officials said on Friday, after measures imposed in mid-2013 to curb purchases of the metal from abroad halted them completely in the third quarter.

Reports this week may show that the U.S. is on track for the biggest annual gain in payrolls since 2005 before the Fed’s next gathering Dec. 17-18. Minutes of the last meeting released on Nov. 20 signaled that policy makers expected an improving economy to warrant trimming debt purchases in coming months. 

Platinum added 0.3 percent to $1,347.55 an ounce, after declining to $1,340.15, the lowest since July 8. Palladium added 0.3 percent to $712.65 an ounce, snapping two days of losses. Industrial metals extended last month’s losses on Monday as upbeat U.S. economic data spurred renewed fears about the Federal Reserve trimming monetary stimulus and the dollar strengthened. Copper gained 3 points to trade at 3.175 against the strong US dollar. Copper fluctuated between gains and losses, trading near a one-week low as signs the U.S. economy is strengthening stoked concern that the Federal Reserve may soon start tapering its stimulus. The LME index of six industrial metals fell 13 percent this year amid forecasts for surpluses in materials from copper to aluminum. On the LME, nickel slid today, while aluminum, lead and zinc were little changed. 

Gold Silver Copper Platinum and Palladium Trade In The Green This Morning

Gold Silver Copper Platinum and Palladium Trade In The Green This Morning
Gold Silver Copper Platinum and Palladium Trade In The Green This Morning
Gold is more or less flat this morning trading at 1245.35 in the Asian session. Gold has seen small gains and losses this week but remains in a tight range between the 1240-1250 price level as traders look for higher profits in equities. Wall Street continues to break records as speculators look for higher yielding assets as the year draws to an end. The pact sealed between Western Allies and Iran over the weekend, may not last long, it may not be good or practical but in the near term has helped drop global tensions to their lowest levels in years allowing traders a comfort zone. Gold is a safety net against uncertainty and inflation, neither of which are on the rise as trader sell of gold. Gold lost 26 percent this year, tumbling to a 34-month low of $1,180.50 in June, amid speculation that the Fed will begin trimming its $85 billion-a-month of asset purchases that helped bullion cap a 12th year of gains in 2012. Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, were unchanged at 848.91 metric tons yesterday, the least since January 2009, after a six-day contraction that was the longest slump since August. As we approach the FOMC meeting on December 18th traders will once again focus on the tapering issue, but with Janet Yellen taking the reigns over in January, traders are booking odds that nothing will happen in December now that Yellen is pushing to tie stimulus not only to unemployment and inflation but to growth. The US economy is chugging along nicely, but it is sporadic and hectic.

Traders will be closely eyeing today’s durable goods data along with the University of Michigan Consumer Confidence report which might cause some market volatility but is unlikely to have an effect on precious metals. Silver, which dropped 1.9 percent yesterday, rose as much as 0.3 percent to $19.9224 an ounce before trading at $19.8716. Metal in ETPs dropped to 19,762.4 tons yesterday, the least since Aug. 13. Platinum traded at $1,374.90 an ounce from $1,375.50 yesterday, when prices dropped to a six-week low of $1,369.29. Palladium was little changed at $717.50 an ounce.

Copper gained 4 pips this morning as the US dollar eased a bit. Copper is trading at 3.215 well above last week’s price range with the US dollar at 80.60 down 4 pips today. Copper swung between gains and losses as investors weighed indications of strong demand against consensus of increasing supplies next year. Stockpiles slid to the lowest since Feb. 25 yesterday while the premium buyers in Shanghai pay on top of LME prices to secure the metal was $192.50 a ton today, near the record $210 set in August. These signs of demand contrast with estimates from Barclays Plc and the International Copper Study Group of a worldwide glut in the metal that may almost triple to reach a 13-year high of 272,000 tons in 2014.

Metals Pack Weekly Fundamental Analysis November 25-29, 2013 Forecast – Silver & Copper

Metals Pack Weekly Fundamental Analysis November 25-29, 2013 Forecast – Silver & Copper
Metals Pack Weekly Fundamental Analysis November 25-29, 2013 Forecast – Silver & Copper
Weekly Analysis and Recommendations:

Silver ended the week near recent lows as precious metals eased with silver trading at 19.862 while Copper ended at 3.21 climbing after falling to trade as low as 3.16 this week. Chinese PMI data weighed on the commodity along with growing inventories. Platinum ended near 1383.40 down for the week and Palladium closed the week below its trading range at 713.20. Commodity pressures won’t show up until later in 2014, making it difficult to position early on the sector, says Wilson. Iron ore in particular, where Goldman has the strongest downside view, is tough as a direct play. But shifts in iron ore and other markets, will pressure commodity currencies on the south side, such as the Australian dollar for iron ore and copper, the South African rand for gold and the Brazilian Real for soybeans and iron ore.

Date

Last

Open

High

Low

Change %

Nov 22, 2013

19.862

19.985

20.043

19.815

-0.63%

Nov 21, 2013

19.987

19.898

20.043

19.712

0.46%

Nov 20, 2013

19.895

20.383

20.487

19.783

-2.40%

Nov 19, 2013

20.385

20.365

20.478

20.203

0.08%

Nov 18, 2013

20.368

20.758

20.767

20.298

-1.89%

Copper dipped near three-month lows as expectations of a growing surplus of the metal and a lack of immediate measures to boost commodities demand in China’s reform package offset a softer dollar.

Beijing unwrapped its boldest set of economic and social reforms in nearly three decades relaxing its one-child policy and freeing up markets further to put the world’s No. 2 economy on a more stable footing. The reforms may take years, however. But for copper, expectations of rising mine supply weighed on prices, with the metal unable to draw support also from expectations of continued economic stimulus from the U.S. Federal Reserve.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Historical: From 2011 to present

Highest: 44.188 on Aug 22, 2011

Average: 31.108 over this period

Lowest: 18.183 on Jun 28, 2013

METALS 1123W

Major Economic Events for the week of November 18-22 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Time

Currency

Event

Actual

Forecast

Previous

 Nov. 18

10:00

EUR

Trade Balance 

14.3B

14.2B

12.3B

 

14:00

USD

TIC Net Long-Term Transactions 

25.5B

21.3B

-9.8B

 Nov. 19

10:00

EUR

German ZEW Economic Sentiment 

54.6

54.0

52.8

 

10:00

EUR

ZEW Economic Sentiment 

60.2

63.1

59.1

 

10:00

EUR

German ZEW Current Conditions 

28.7

31.0

29.7

 

13:30

USD

Employment Cost Index (QoQ) 

0.4%

0.5%

0.5%

 Nov. 20

07:00

EUR

German PPI (MoM) 

-0.2%

0.1%

0.3%

 

13:30

USD

Core CPI (MoM) 

0.1%

0.1%

0.1%

 

13:30

USD

Core Retail Sales (MoM) 

0.2%

0.1%

0.3%

 

13:30

USD

CPI (MoM) 

-0.1%

0.1%

0.2%

 

13:30

USD

Retail Sales (MoM) 

0.4%

0.1%

0.0%

 

13:30

USD

CPI (YoY) 

1.0%

1.0%

1.2%

 

13:30

USD

Core CPI (YoY) 

1.7%

1.7%

1.7%

 

15:00

USD

Existing Home Sales 

5.12M

5.13M

5.29M

 

15:00

USD

Existing Home Sales (MoM) 

-3.2%

-2.6%

-1.9%

Nov. 21

01:45

CNY

Chinese HSBC Manufacturing PMI 

50.4

50.8

50.9

 

07:58

EUR

French Manufacturing PMI 

47.8

49.5

49.1

 

07:58

EUR

French Services PMI 

48.8

51.0

50.9

 

08:28

EUR

German Manufacturing PMI 

52.5

52.0

51.7

 

08:28

EUR

German Services PMI 

54.5

53.0

52.9

 

08:58

EUR

Manufacturing PMI 

51.5

51.5

51.3

 

08:58

EUR

Services PMI 

50.9

51.9

51.6

 

11:00

GBP

CBI Industrial Trends Orders 

11

1

-4

 

13:30

USD

Core PPI (MoM) 

0.2%

0.1%

0.1%

 

13:30

USD

PPI (MoM) 

-0.2%

-0.2%

-0.1%

 

13:30

USD

Initial Jobless Claims 

323K

335K

344K

Nov. 22

07:00

EUR

German GDP (QoQ) 

0.3%

0.3%

0.3%

 

09:00

EUR

German Ifo Business Climate Index 

109.3

107.7

107.4

 

09:00

EUR

German Current Assessment 

112.2

111.6

111.3

 

09:00

EUR

German Business Expectations 

106.3

104.0

103.7

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

 Nov. 25

15:00

USD

Pending Home Sales (MoM) 

2.0%

-5.6%

Nov. 26 

13:30

USD

Building Permits 

0.930M

0.926M

 

13:30

USD

Housing Starts 

0.913M

 

 

13:30

USD

Building Permits (MoM) 

 

-2.9%

 

15:00

USD

CB Consumer Confidence 

72.5

71.2

Nov. 27 

09:00

EUR

GfK German Consumer Climate 

7.0

7.0

 

09:30

GBP

GDP (QoQ) 

0.8%

0.8%

 

09:30

GBP

GDP (YoY) 

1.5%

1.5%

 

11:00

GBP

CBI Distributive Trades Survey 

10

2

 

13:30

USD

Core Durable Goods Orders (MoM) 

0.2%

-0.2%

 

13:30

USD

Durable Goods Orders (MoM) 

-1.5%

3.8%

 

14:45

USD

Chicago PMI 

62.0

65.9

 

14:55

USD

Michigan Consumer Sentiment 

 

72.0

Nov. 28

08:00

EUR

Spanish GDP (QoQ) 

0.1%

0.1%

 

08:55

EUR

German Unemployment Change 

3K

2K

Nov. 29

07:00

EUR

German Retail Sales (MoM) 

0.3%

-0.4%

 

07:45

EUR

French Consumer Spending (MoM) 

0.2%

-0.1%

The Comex Halts Gold Trading For 60 Seconds On Sharp Decline

The Comex Halts Gold Trading For 60 Seconds On Sharp Decline
The Comex Halts Gold Trading For 60 Seconds On Sharp Decline
Industrial metals, base metals and precious metals all took major falls over the last days. Gold tumbled to trade at 1246.20 declining almost $12.00 in the Asian session after tumbling from the 1275 range early on Wednesday. Silver followed on the heels of gold to trade at 19.810 down by 248 points. Platinum actual bucked the trend this morning adding $3.75 as traders took advantage of yesterday’s huge declines to buy up the precious metal on the cheap. Palladium remains at 713.20. Copper remained flat trading near recent lows at 3.148. Federal Reserve minutes seemed to upset the applecart on Wednesday evening as traders read too much into the minutes. Mr. Bernanke and Ms. Yellen have both been on the speaking circuits continuously saying that the Fed stimulus would continue into 2014, but traders reading the minutes have concluded that the Fed could begin to taper its huge monthly purchases regardless of the improvement in the jobs market.  Metals should have and would have most likely rebounded this morning until the lackluster release of Chinese manufacturing sent metal traders running for the hills. China manufacturing growth fell to a two-month low as export orders swung to a decline, according to preliminary results from HSBC’s monthly PMI report issued this morning. The “flash” version of the HSBC/Markit China manufacturing Purchasing Managers’ Index eased to 50.4, compared to last month’s 50.9 reading. The result was also well below the official government version of the PMI, which hit 51.4 in October. Among the sub-indexes, new export orders slid below the 50 mark dividing growth from contraction, while overall new orders rose, but at a slower rate than in October. Traders pay more attention to the HSBC private data release as the official numbers are always suspicious and have been fixed in the past.

Gold is heading for a significant decline in 2014, Goldman Sachs Group Inc. said in a report yesterday that outlined investment themes for next year. Bullion may drop to $1,050 by the end of 2014, analysts including Jeffrey Currie wrote. Prices slumped 26 percent this year, heading for the first annual loss since 2000, amid expectations that the Fed will trim its $85 billion in monthly asset purchases as growth picks up. Policy makers expected data would signal further improvement in the labor market and “thus warrant trimming the pace of purchases in coming months,” according to minutes of the Fed’s October meeting released yesterday.

The Comex stopped trading in December gold futures for about 20 seconds yesterday after the December contract fell about $11 within a minute before trading was suspended.

There is little data for traders to look at today, so markets are expected to be quiet with Chinese and the Bank of Japan decision behind the markets. This morning the BoJ held rates and policy. The US dollar is trading at 81.21 while the JPY is trading right on the 100 price.

 

Fed Chairwoman Nominee Sends Precious and Industrial Metals Climbing

Fed Chairwoman Nominee Sends Precious and Industrial Metals Climbing
Fed Chairwoman Nominee Sends Precious and Industrial Metals Climbing
Comments from soon to be Chairwoman of the Federal Reserve, Yellen, helped support precious metals yesterday. On Wednesday, Yellen’s three page prepared statement indicated that she would continue to support the current Bernanke, easy money policies after her appointment. On Thursday, Yellen was drilled by the US Senate Banking committee as she easily answered questions and comments and seemed sure to be headed towards approval. “This is a virtually unprecedented situation,” she said, referring to the 4 million Americans who have remained unemployed for more than six months.

“We know that those long spells of unemployment are particularly painful for households, impose great hardship and costs on those without work, on the marriages of those who suffer these long unemployment spells,” she added. “So I consider it imperative that we do what we can to promote a very strong recovery.” Asked about the risks of more stimulus, Yellen repeatedly told the senators she currently sees no major bubbles forming, including in the stock market and housing market.

Yellen’s testimony seemed to indicate that tapering at the December 18th meeting was not on the table giving traders direction. If confirmed, Yellen faces a daunting task: How to wean the economy off Fed stimulus at the right time. Yellen, however, seems convinced that the bond-buying program could still help the economy. The benefits continue to outweigh the costs, she said.

Gold traders seemed relaxed by her comments and have continued to push up prices steadily over the past days. Gold is trading at 1288.00 in the Asian session this morning. Gold fluctuated near a one-week high as investors assessed the Federal Reserve’s commitment to maintain stimulus. Billionaire investor John Paulson kept his holdings in the largest bullion-backed exchange-traded fund.

Bullion for immediate delivery traded at $1,288.. after climbing to $1,294.42 yesterday, the highest since Nov. 8. Prices that are set for a third weekly loss advanced 1.5 percent. Silver added 66 points this morning to trade at 20.788 but remains well below its 22 price range. Silver has been able to gain on the back of gold, as precious metals are on the upswing. Copper also rose y 17 points but remains weak at 3.182 as traders remain uneasy about the future of Chinese economic policies. Copper rose for a second day, paring a weekly decline, after Federal Reserve Chairman Nominee Janet Yellen backed U.S. stimulus measures until the economy improves. Copper’s losses were however limited after upbeat readings from China boosted the industrial metal’s demand prospects in its number one consumer. According to China’s National Bureau of Statistics, consumer inflation jumped by an annualized 3.2% last month, slightly up from September’s 3.1% advance. Despite trailing the median estimate of analysts surveyed by both Reuters and Bloomberg for a 3.3% surge, last month’s reading matched February’s 10-month high. The recovery of the US dollar is also keeping copper at its lowest trading range in month. The US dollar is trading at 81.10 while platinum gained $7.70 to trade at 1454.70 and palladium added $3.90 to trade at 742.80

 

 

Base Metal, Precious Metals and Industrial Metals React To Janet Yellen

Base Metal, Precious Metals and Industrial Metals React To Janet Yellen
Base Metal, Precious Metals and Industrial Metals React To Janet Yellen

Base metals continue to trade with a negative bias. Silver and copper have rebounded from recent lows this morning after taking major tumbles this week. Silver has added 356 points to trade at 20.789 well below its have range at $22.00 while copper rebounded adding 20 points to trade at 3.179 below its near term trading range at 3.25. Industrial metals have been steadily falling on worries from China and the possibility of tapering of asset purchases by the US FOMC in December.

Copper tumbled to its lowest level in 90 days after a Federal Reserve official raised the prospect of a retreat from monetary stimulus next month. Uncertainties about policy reforms in China and weak eurozone factory output also weighed on the metal. Copper prices fell on Wednesday as disappointment from the Chinese Communist Party meet and looming market surplus weighed on prices. Eurozone industrial production fell by 0.5% from growth of 1% in the previous month, which also hurt base metals prices. Base metals are expected to move down as investors are likely to remain cautious ahead of Yellen’s testimony and Eurozone GDP data today.

Copper on the London Metal Exchange closed down 2 percent at $6,980 a ton, after touching a low of $6,956, the weakest since Aug. 7. Copper extended losses from the previous session when it broke through its 100-day moving average of $7,118. The move lower sent the market crashing through the floor of a $7,000 to $7,420 range it had held since early August.

Gold saw a mini rally in the Asian session this morning gaining $15.50 as traders took advantage of the lower US dollar and cheap prices to buy up the shiny metal. Gold prices fell on Wednesday as gains in US equities dented gold’s safe haven appeal. However, a weaker dollar after the Fed Chairman nominee Janet Yellen supported Fed’s stimulus program and said that the economy and the labor market were performing far short of their potential while inflation remained low limited the downside in prices. Yellen is likely to testify before the Senate Banking Committee today. Gold prices are expected to remain in range today as investors are likely to remain cautious ahead of Yellen’s testimony which would give cues on the Fed’s future course of monetary policy.

The other factor pushing up gold is demand from China, where volumes on the Shanghai exchange were near a month’s high on Wednesday. A bearish factor could be paring of holdings in gold in exchange-traded funds. SPDR Trust, the world’s biggest gold exchange-traded funds, reported that the holdings fell to 865.71 tons.

After a fairly muted response at the beginning of the week, platinum prices were boosted by South African supply concerns before better-than-expected US economic data towards the end of the week acted to dampen prospects for platinum. Platinum has climbed $10.95 this morning to trade at 1443.70. A wage-related strike called by the National Union of Mineworkers (NUM) at Northam Platinum saw 7,000 workers down tools at the company’s Zondereinde operations over the weekend. Initially this seemed to have little impact as the platinum price started the week at $1455, lower than it had ended the previous week. Palladium gained $4.80 as auto sales were once again climbing in the US. Palladium proved more resilient, shrugging off news that US car and light-truck sales in October declined to the lowest annualized rate since April.

Metals Traders Waiting For Chinese Leaders Reforms

Metals Traders Waiting For Chinese Leaders Reforms
Metals Traders Waiting For Chinese Leaders Reforms
After taking a major tumble on Friday, gold remains directionless adding just 0.15% in the Asian session to trade at 1286.50 falling steadily at the end of the week after the US nonfarm payroll report showed that the US had created in excess of 200k jobs against a forecast of 120k, this was followed by a revision of the previous jobs added upwards. Earlier in the week, US data showed that its GDP was much stronger than forecast printing at 2.8% while expected to only grow by 2%. This raised the possibility that the US Federal Reserve might move up its timetable to being tapering their asset purchases.

On the other side, unemployment ticked up a drop, which is the gauge that the FOMC has set for changing its policy. Despite the stronger than expected job growth, the unemployment rate ticked up to 7.3 percent in October from 7.2 percent in September. The modest increase by the unemployment rate, which matched economist estimates, largely reflected the way furloughed federal workers were counted in the household survey.

The major event from last week was the ECB’s decision to reduce its cash rate to its lowest level of 0.25%; this news pulled down precious metals prices and rallied the US dollar against the Euro. This week traders will be closely watching U.S industrial production, German GDP for the third quarter, China’s new loans, U.S federal budget balance, Yellen testifies, ECOFIN summit, and U.S. jobless claims. The price of gold decreased by 2.19% last week; moreover, the average price reached $1,306.70 which was 2.24% below last week’s average rate. Gold ended the week at $1,284.50. Gold holdings of SPDR gold trust ETF rose for the first week in the past ten consecutive weeks.  Nonetheless, during the month, the ETF’s gold holdings decreased by 0.41%. The ETF was also down by 35.71% for the year (up-to-date). Current gold holdings are at 868.418 tons. If the ETF’s gold holdings continue to pick up, this may signal the demand for gold as an investment is picking up.

Strong Chinese industrial production and export data has helped lift market sentiment, but the euro remained under pressure as looming deflation fears in the eurozone saw the ECB cut rates to a record low 0.25 percent last week. Inflation remains below expectations in the US, Japan and the Eurozone, which is pressurizing the prices of gold, which is a hedge against inflation.

Silver and copper are trading in the green this morning, silver is holding at 21.362 up by 45 points and copper is at 3.262 adding 4 points. Platinum and palladium are both in the red, fighting the trends. Platinum is trading at 1443.85 while platinum is down 2.50 at 756.50. Copper prices rose on Friday on optimism over positive Chinese trade data. However, a stronger dollar after US jobs report limited the upside in prices. China’s inflation climbed to 3.2%, raising fears of another tightening the central bank to curb credit supply and control inflation. However, Chinese factory output rose by 10.3% while fixed asset investment also rose to 20.1%. Base metals are expected to remain in range as investors would await the announcement of reforms at the Chinese Communist Party meet ending on November 12 to gauge the growth expectations for China. Tomorrow will be a big day for metals and commodities.

Copper Takes A Big Fall While Gold Remains Flat

Copper Takes A Big Fall While Gold Remains Flat
Copper Takes A Big Fall While Gold Remains Flat

Gold is trading at 1316.20 down by $1.60 in the Asian session while the US dollar holds completely flat. Silver eased by 33 points as Chinese economic worries continue to weigh on the metals markets. After six days of a losing streak, gold rebounded on short covering. Earlier, the yellow metal declined on speculation that recent upbeat economic figures from the US will force the Federal Reserve to pare stimulus measures. Yesterday, an economic release from the world’s largest economy showed that the service sector in the region expanded faster than previously anticipated. On the other hand, the dollar index continued to trade near multi week highs. While the market mood was rather mixed-up owing to uncertainty lingering in the market over the future of the Fed massive bond buying program, investors’ attention has now essentially shifted towards a slew of economic releases scheduled for the latter half of this week. These key releases include the ECB rate announcement and US GDP on Thursday, Chinese trade balance and US nonfarm payrolls on Friday as well as Chinese inflation and industrial production data on Saturday, which will spur wide swings in the market.

The U.S. economy probably grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent gain in the previous period, shows a Bloomberg survey before today’s report. Economists predict data Nov. 8 will show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month. The U.S. economy probably grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent gain in the previous period, shows a Bloomberg survey before today’s report. Economists predict data Nov. 8 will show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month. Gold fell to $1,305.98 on Nov. 5, the lowest since Oct. 17, after the Institute for Supply Management’s U.S. non-manufacturing index rose. The central bank won’t reduce stimulus until March, according to the median estimate of economists in a Bloomberg survey Oct. 17-18.

Copper gained by 5 points to trade at 3.247 remaining well below its 3.36-3.30 range. Copper climbed after touching  the lowest price in almost a month before the release of U.S. data that may help investors gauge when the Federal Reserve will begin tapering bond purchases and ahead of Chinese trade figures. China, the world’s largest copper user, is scheduled to announce its October trade balance tomorrow, followed by inflation and industrial production data on Nov. 9. Chinese Communist Party leaders will meet for four days starting Nov. 9 to discuss policies. Data firm Markit said its October composite purchasing managers index for the euro area slipped to 51.9 from 52.2 in September, but was revised up slightly from an earlier reading. Readings above 50 indicate expansion. In addition, the services PMI for the eurozone fell to 51.6 in October from September’s 52.2, but topped expectations of 50.9. And UK industrial production for September rose 0.9 per cent on the month versus expectations of a 0.5 per cent increase. The positive data limited the metal losses on Wednesday. Platinum climbed this morning to 1466.55 while palladium dipped by $2.10 to 762.80

Metals and Energy Commodities Respond Mixed After Fed’s & Data

Metals and Energy Commodities Respond Mixed After Fed's & Data
Metals and Energy Commodities Respond Mixed After Fed's & Data
The commodity markets seem to be making sense once again, crude oil has declined to 96.54 a good range based on supply and demand and the easing of geopolitical tensions. Natural gas is at 3.641 a bit high as it should find a bottom to sit between seasons but we will see what will happen after the EIA releases this week’s inventory report later today.  Gold continues to make big moves up and down but keeps ending at the same place, trading at 1338.90 down a bit over $10 in the Asian session. Whiles is cousin silver dropped 565 points to 22.418 taking a very hard fall after a major climb on hopes of increased demands for industrial metals. Copper on the other hand seems to be trading in its longer term range at 3.306 after falling to 3.26 last week and recovering above the 3.32 price yesterday on lower inventories. Copper hit a 1-week high as the Federal Reserve’s decision to retain its stimulus efforts for the U.S. economy pushed several commodities higher.

Overall US data has been weak reducing demand for most of these commodities as the Fed sees an ongoing slow and sluggish “moderate” recovery. The Fed met expectations by leaving its stimulus program unchanged at its policy meeting, though it did surprise with its upbeat assessment of the economy. Some investors were looking for the central bank to downgrade its economic outlook after the government shutdown and budget impasse earlier this month.

Yesterday the Energy Administration released its week crude oil report which showed   that crude supplies rose 4.1 million barrels for the week ended Oct. 25. Analysts polled by Platts were looking for a climb of 3.5 million barrels but the American Petroleum Institute had reported late Tuesday a much bigger 5.9 million-barrel climb. Gasoline supplies fell by 1.7 million barrels, while distillate stockpiles shed 3.1 million barrels, the EIA said. Gasoline stockpiles were expected to rise 1.5 million barrels, while forecasts called for a decline of 1.2 million barrels for distillates.

Copper rallied in European trading on bets the Fed will stay its course on the U.S. stimulus. The metal closed the New York session up too and remained positive in post-settlement trade after the Fed affirmed at the end of a 2-day policy meeting that there will be no slowdown in its bond-buying.    Benchmark copper on the London Metal Exchange ended up more than 1 percent at $7,298 a ton, versus Tuesday’s close of $7,200, but down from a one-week high of $7,299.50 hit earlier in the session. Silver, used heavily in industrial applications despite being grouped in precious metals alongside gold, was the CRB’s biggest gainer of the day, rising more than 2 percent.

Platinum eased to 1465.10 following precious metals down while palladium gave up $1.80 to trade at 744.50. Brent oil eased by 35 cents to trade at 109.60 with the spread widening to over $13.00

 

Gold Up, Copper Down Leaving Silver Stuck In The Middle

Gold Up, Copper Down Leaving Silver Stuck In The Middle
Gold Up, Copper Down Leaving Silver Stuck In The Middle
In a surprise market turn around this week gold continued to climb trading on a high note through Thursday to trade just under 1350.00. In the Asian session this morning traders are booking profits and pushing down prices, gold is trading at 1342.90 down by $7.40. On Thursday, gold rallied to its highest close on the New York Mercantile Exchange since Sept. 19, getting a boost from improved manufacturing data out of China, a massive gold buyer. The overall metals market is mixed this morning as platinum fell $6.30 to $1,449.90 an ounce, while palladium slipped 89 cents to $747 an ounce. High-grade copper for managed to hold steady at $3.27 a pound. Strong Chinese HSBC manufacturing data had little effect on industrial metals, after China reveal a surge in bad debts by local banks which might cause the government to tighten lending conditions. Gold headed for a second weekly advance as weaker-than-forecast U.S. data and concern that growth was hurt by a government shutdown boosted speculation the Federal Reserve will delay a cut in stimulus. Investors await economic data from the U.S. and Germany due later today. U.S. durable goods orders may have risen 2.3 percent last month, after gaining 0.1 percent in August, according to a Bloomberg survey. Germany’s Ifo institute business climate index probably rose this month to the highest since April 2012, according to another survey.

Gold lost 20 percent this year amid speculation the Fed will curb stimulus measures. More Americans than forecast filed jobless claims, data showed yesterday. The 16-day government shutdown that started Oct. 1 probably trimmed 0.25 percentage point from fourth-quarter growth and cost 120,000 jobs this month, according to Jason Furman, President Barack Obama’s chief economic adviser. Traders will focus on the FOMC meeting scheduled for the middle of the coming week although odds are that the Fed will keep everything as is until their December meeting after they access the damage caused by the government shutdown. Fed policy makers unexpectedly refrained from slowing the monthly $85 billion bond purchases last month and economists surveyed by Bloomberg Oct. 17-18 said the central bank probably will delay a reduction in the stimulus until March.

Initial jobless claims decreased by 12,000 to 350,000 in the week ended Oct. 19, the Labor Department said yesterday, compared with 340,000 forecast in a Bloomberg survey.

Copper is doing just the opposite of gold which leaves silver stuck in the middle. Silver is trading at 22.663 down 159 points. Copper is poised for a weekly decline amid concern that China is tightening monetary policies to curb inflation, reducing the demand outlook for industrial metals from the biggest consumer.

The contract for delivery in three months on the London Metal Exchange was little changed at $7,182 a metric ton. The price has fallen 0.9 percent this week, set for the first monthly drop in four months. The benchmark money-market rate in China yesterday jumped the most since June as officials’ drained cash from the financial system amid a sign of a recovery in the second-biggest economy. Manufacturing strengthened more than economists estimated this month and inflation rose to the highest level since February.

Precious Metals & Industrial Metals Trading In The Green

Precious Metals & Industrial Metals Trading In The Green
Precious Metals & Industrial Metals Trading In The Green

Gold is trading in the green this morning holding near a 4 week high at 1336.00 as silver really shines adding 106 points to trade at 22.723 after the release of stronger than expected Chinese manufacturing data. Traders are beginning to pay very close attention to the Federal Reserve with the FOMC meeting next week. Gold has often tracked shifting expectations as to whether the US central bank would start reining in nearly five years of super-easy dollars, a measure which had sparked fears of inflation and encouraged investors to buy the precious metal. Prices sank to a near three-year low around $1,180 in late June on worries over the Fed’s plan to wind down the stimulus. Odds makers have put the possibility of tapering at this meeting close to 0, with poor jobs data and the government shutdown effects remaining unknown. The prospect of the Fed staying the course on its easy-money policies through year’s end sent the Dow Jones to a one-month high, market participants said. The blue-chip index gained 75.46 points, or 0.49%, to 15467.66 and is once again nearing record territory, and the S&P 500 finished at a fresh record close, up 10.01 points, or 0.57%, at 1754.67. Treasury yields sank to a three-month low on the report. The yield on the 10-year Treasury, which moves in the opposite direction of the price, fell to 2.512%.

HSBC’s China manufacturing purchasing managers’ index showed activity in the nation’s manufacturing sector expanded more than expected in October, rising to a seven-month high. The initial October reading for China’s manufacturing activity came out at 50.9, compared with a final reading of 50.2 in September. The score was a seven-month high; above the 50 mark that separates expansion and contraction in factory activity. Copper made an amazing turnaround this morning after the data release adding 12 points to trade at 3.278 after suffering a huge drop on Wednesday. Copper futures sank 2% as concerns about the stability of China’s financial system sparked worries over the country’s future demand for copper. China’s short-term interest rates jumped to levels not seen since July as some companies tapped money markets to fund deadline tax payments and as worries spread about bad debts in the banking system, analysts at Scotiabank said in a note.

Adding to the tension, while China’s central bank refrained from removing liquidity from the domestic money market on Tuesday, authorities also avoided pumping liquidity into the system in recent days. The lack of open market activity is a sign of concern that tighter liquidity will hamper growth in the world’s second-largest economy, analysts said. China is the world’s largest copper consumer, accounting for about 40% of global copper demand, and fears of slower economic growth there contributed to a 16% drop in copper prices during the first half of 2013.

The weaker US dollar is also helping the metals markets to trade on a positive note this morning. Palladium rose by 1.50 to trade at 747.00 while Platinum added 9.30 to reach 1443.60.

Palladium Soars On Chinese Import Demand While Gold Remains Flat

Palladium Soars On Chinese Import Demand While Gold Remains Flat
Palladium Soars On Chinese Import Demand While Gold Remains Flat
Global focus will return to the US later today, as the US begins to release delayed data due to the budget crisis lasting from October 1, 2013. The 16 closure stopped the flow of data from most government agencies. US lawmakers managed to fund the government until early 2014 allowing agencies to reopen. Data will begin to flow today, with the US releasing the much watched nonfarm payroll report.  Gold has held steady as investors await US employment data, while palladium has rallied to an eight-week high amid hopes of stronger demand from China. Gold slumped 22 percent this year on expectations the Fed will slow its $85 billion-a-month of bond buying as the economy improves. Fed policy makers, who meet again Oct. 29-30 after unexpectedly maintaining stimulus at the last meeting, will make the first cut to buying in March, according to the median estimate of 40 economists surveyed by Bloomberg Oct. 17-18. A poll last month forecast the first reduction in December.

Gold on Monday rose $US1.20 or 0.1 per cent, to settle at $1,315.80 on the Comex division of the New York Mercantile Exchange. Gold gave back yesterday gains to trade at 1314.80 in the Asian session. Many investors look to the employment gauge as a prognosticator of future monetary policy, as the Federal Reserve has said a stronger labour market is a key ingredient for winding down the central bank’s stimulus program. The program has buoyed gold prices by keeping interest rates low and burnishing the allure of zero-yielding assets such as precious metals. The weight of gold sales in China totaled 832 tons last year, the strong growth pushed greatly by sales of gold bars, sales of which rose 87 percent to nearly 279 tons. Jewelry sales rose 44 percent to 383.86 tons. At the same time, industrial use of gold fell 1.6 percent.

Palladium rose $US9.60, or 1.3 per cent, to settle at $US750.25 a troy ounce on the Nymex. This was the highest settlement since August 23. China, the world’s largest car market, stepped up its imports of palladium by 25 per cent in September from a year earlier to 62,500 ounces, according to data from the General Administration of Customs. Palladium is widely used in car exhaust filters. Still, with prices hovering near $US750 a troy ounce, palladium futures are likely to face pressure as Russia, the world’s largest producer of the metal, steps up sales of its government stockpile.

Copper climbed on the LME after imports of refined metal into China reached a 19-month high, indicating continued demand in the world’s biggest consumer. Shipments jumped 32 percent from August to 347,305 metric tons last month, customs data showed today. That was the highest level since February 2012, according to data compiled by Bloomberg. Copper also gained on expectations the Federal Reserve will delay slowing economic stimulus in the U.S., the second-largest consumer of the metal. Copper is trading at 3.30 in the Asian session this morning. Copper stockpiles monitored by the LME fell for a 33rd straight session to 494,850 tons on a drop in Malaysia’s Johor. Orders to remove the metal from warehouses climbed 2.4 percent, the most since June, to 255,750 tons on a gain in New Orleans

 

 

 

Gold Continues To Trade In The Red Along With Metals

Gold Continues To Trade In The Red Along With Metals
Gold Continues To Trade In The Red Along With Metals
Gold is down in the Asian session trading at 1279.90 off by $2.40 as President Obama signs the deal to reopen the US government and to fund the debt ceiling through February 2014 easing global tensions. The US theatrics played out just as expected, no default and no accomplishments. US politicians simply kicked the problems down the road. The new agreement sets up a committee to resolve the budget by mid-December. Gold traders seemed to have little reaction to the ending of this crisis. Traders quickly turned to sights to the FOMC meeting at the end of the month. There is little likelihood that the Fed will announce and tapering and many Fed speakers have said that this crisis has pushed tapering thoughts towards June 2014, as some suggest that the Fed will have to help jumpstart the economy with additional stimulus. Yesterday any sharp upside in prices was capped as a result of decline in SPDR gold holdings by 0.4 percent to 885.53 tons. Strength in the DX also restricted upside movement in prices. The yellow metal touched an intra-day high of $1286.90 and closed at $1281.

Yesterday the Federal Reserve released their “Beige Book” which serves as a guide for the FOMC ahead of their meeting and their decision on monetary policy. The economic snapshot was prepared by the Federal Reserve Bank of Chicago and is based on anecdotal information from other regional banks gathered through Oct. 7. It comes two weeks before the Fed’s Oct. 29 and 30 policy meeting and may be one of a diminished number of data points the central bank has to determine the state of the economy. The partial government shutdown since Oct. 1 has shuttered the agencies that produce major economic reports. Already, the Labor and Commerce departments have postponed publishing data covering employment, inflation from consumer-price data, and retail sales, among others.

The Fed determined at its last policy meeting that the economy still needed support and continued its $85 billion-a-month bond-buying stimulus program, aimed at lowering borrowing costs and encouraging hiring and spending. The central bank pointed to risks and uncertainty in the economy as reasons to leave its program unchanged, according to minutes released last week.

Copper fell sharply on Wednesday, as the U.S. moved closer to a deadline to raise the national debt ceiling or risk default. On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at 3.269 a pound during European morning trade, down 1.15%. Industrial metals prices rose yesterday on signs U.S. politicians would agree a last-minute deal to prevent federal debt default. With the deal done, copper remains weak giving up 12 points this morning. China copper smelters have lowered their expectations on copper treatment and refining charges for term imports of concentrates in 2014 as expected supply growth may be smaller than they had anticipated.

Silver is trading at 21.275 down by 90 pips while platinum gained 5 pips to trade at 1399.90 and palladium eased by $1.80 to 715.90. Traders are hoping that US data that was delayed by the government shutdown will begin to be released as early as Friday.

Gold and Metals At The Mercy Of Washington Politics

Gold and Metals At The Mercy Of Washington Politics
Gold and Metals At The Mercy Of Washington Politics
Gold recovered in after-hours trading as US politicians close meetings for the day on a positive note. Lawmakers from both sides of the bench are all saying that progress has been made and a final deal to avert a government default and to reopen government agencies is nearing and the US will avoid a default. Gold December 2013 fell 0.3% to 1,273.2 on the Comex division of the New York Mercantile Exchange. Meanwhile, silver futures slid 0.7% to USD 21.19 per troy ounce. Gold slipped for a fifth session out of seven on Wednesday as safe-haven bids slowed on hopes U.S. lawmakers would hash out a last-minute agreement to raise the debt ceiling before a Thursday deadline.

Fitch Ratings warned it could cut the sovereign credit rating of the United States from AAA, citing the political brinkmanship over raising the debt ceiling. While “Reckless” U.S. fiscal policy will likely force the Federal Reserve to stand pat on monetary policy this month, said Dallas Fed president Richard Fisher in a speech late last evening.

Gold premiums in India, the world’s biggest buyer of the precious metal, hit a record $100 an ounce, about 8 percent over London prices, on a shortage of supplies to meet festival demand, traders said on Tuesday. Chinese gold output rose 8.2% to 270.167 tons from January to August 2013, year over year, according to data from the China Gold Association. The association also said that August production was down slightly to 37.978 tons from 39.367 tons in July. China is the world’s largest gold producer for the 6th year in a row and is on track to soon overtake India as the top consumer. In 2012, Chinese gold consumption rose 9.35% to 832 tons. And in the first half of 2013, consumption jumped a remarkable 54% year over year. The boost in demand has been credited in large part to Chinese weddings, which account for roughly 50% of all Chinese domestic bullion consumption. Chinese and Indian customs is to give items of gold for wedding and personal holding of gold jewelry as a sign of wealth.

Unfortunately for gold investors, ETF’s are selling off the precious metal holding at a record pace which continues to weigh on the value of gold. Some investors buy gold as a hedge against economic turmoil, and prices have generally pointed lower in recent weeks as investors bet that politicians would avert a breach of the U.S. borrowing limit. But gold prices pushed higher in after-hours trade following reports that a Senate effort to craft a bipartisan plan had stalled. Futures snapped as high as $1,287.70 an ounce, a rise of 0.9%, before paring those gains. Thursday is the deadline set by the Treasury Department to raise the federal borrowing limit. The markets are still unsure if there is an actual movement forward or backward (on the shutdown),” a CME Group analyst wrote. “However, if it appears that the U.S. is likely to encounter a default, gold prices might return to a safe-haven status.”

In other metals trading, December high-grade copper lost about one cent to $3.30 a pound. January platinum climbed $3.10, or 0.2%, to $1,386.50 an ounce and December palladium added $1.65, or 0.2%, to $707.95 an ounce