Silver Fundamental Analysis September 6, 2012 Forecast

Analysis and Recommendations:

Silver eased off a bit today, to trade at 32.267 as the euro weakened earlier in the day on worries about the ECB plans and bond buying program. Also markets again looked at manufacturing and production slowdowns in China.

Industrial metals suffered a bit on lower PMI and growth rates, while precious metals remained strong, as profit taking hit the markets as gold and silver were both at recent highs.

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 up to the data analysis and information in our weekly reports.

Economic Data September 5, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sep. 05

 

AUD

 

 

GDP (QoQ) 

0.6%

 

0.7% 

 

1.4% 

   

 

 

CHF

 

 

CPI (MoM) 

0.0%

 

0.1% 

 

-0.5% 

 

 

 

 

EUR

 

 

Retail Sales (MoM) 

-0.2%

 

-0.2% 

 

0.1% 

 

 

 

 

EUR

 

 

German 10-Year Bund Auction 

1.420%

 

 

 

1.420% 

 

 

 

 

USD

 

 

Nonfarm Productivity (QoQ) 

2.2%

 

1.8% 

 

1.6% 

 

 

 

 

USD

 

 

Unit Labor Costs (QoQ) 

1.5%

 

1.5% 

 

1.7% 

 

 

 

 

CAD

 

 

Interest Rate Decision 

1.00%

 

1.00% 

 

1.00% 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event

Forecast

Previous

 Sep. 06

10:00

EUR

GDP (QoQ) 

-0.2% 

-0.2% 

 

11:00

EUR

German Factory Orders (MoM) 

0.2% 

-1.7% 

 

12:00

GBP

Interest Rate Decision 

0.50% 

0.50% 

 

12:00

GBP

BOE QE Total 

375B 

375B 

 

12:45

EUR

Interest Rate Decision 

0.75% 

0.75% 

 

13:15

USD

ADP Nonfarm Employment Change 

140K 

163K 

 

13:30

USD

Initial Jobless Claims 

370K 

374K 

 

13:30

USD

Continuing Jobless Claims 

3315K 

3316K 

 

15:00

USD

ISM Non-Manufacturing Index 

52.5 

52.6 

Sep. 07

00:01

GBP

RICS House Price Balance 

-24% 

-24% 

 

09:30

GBP

Industrial Production (MoM) 

1.5% 

-2.5% 

 

09:30

GBP

Manufacturing Production (MoM) 

2.0% 

-2.9% 

 

09:30

GBP

PPI Input (MoM) 

1.7% 

1.3% 

 

09:30

GBP

PPI Input (YoY) 

1.2% 

-2.4% 

 

09:30

GBP

Industrial Production (YoY) 

-2.8% 

-4.3% 

 

11:00

EUR

German Industrial Production (MoM) 

0.2% 

-0.9% 

 

13:30

USD

Average Hourly Earnings (MoM) 

0.2% 

0.1% 

 

13:30

USD

Nonfarm Payrolls 

124K 

163K 

 

13:30

USD

Average Weekly Hours 

34.5 

34.5 

 

13:30

USD

Private Nonfarm Payrolls 

142K 

172K 

Government Bond Auction

 Date    Time   Country 

Sep 06 00:30 Japan 

Sep 06 08:30 Spain 

Sep 06 08:50 France 

Sep 06 09:10 Sweden 

Sep 06 15:00 US 

Sep 07 15:30 Italy

Sep 10 09:30 Germany 

Sep 10 15:30 Italy  

Sep 11 00:30 Japan 

Sep 11 08:30 Holland 

Sep 11 09:10 Greece 

Sep 11 09:30 UK 

Sep 11 14:30 UK 

Sep 11 17:00 US 

Sep 12 09:10 Italy  

Sep 12 09:10 Sweden 

Sep 12 09:30 Germany 

Sep 12 09:30   Swiss 

Sep 12 14:30 Sweden 

Sep 12 17:00 US 

Dreams About Central Banks and Gold

Again this morning base metals are trading sluggishly with aluminum and zinc slightly down while other metals are marginally up by 0.17 percent at London Metal Exchange. The continued slowdown in China is weighing heavily on the metals family. This morning Chinese services PMI reported below the previous adding to the ongoing economic problems in China.

The Asian equities are also trading weak after negative US releases yesterday coupled with looming uncertainty in the Euro-zone. Further, the Chinese demand has remained weak and has largely been mitigated by South Korea as the heartland has procured huge metal stockpiles recently limiting downside in metals. Even the US vehicles sales have rebounded and improved consecutively for the second month and may support gains in aluminum prices ahead in the session.

Markets are eying the ECB rate decision scheduled tomorrow, while the ECB President has commented that “We cannot pursue price stability now with a fragmented euro area because changes in interest rates affect only one country, or two countries at most, They have no importance whatsoever in the rest of the euro area.” Expect the ECB to refrain interest rate cut and may propose plan for short term bond buying. Hence, tomorrow’s meet would provide further clues regarding the ECB’s plan and the shared currency is likely to remain sluggish and may disappoint gains during the day.

From the economic data front, the Euro-zone PMI numbers are likely to remain weak while the retail numbers may also decline and may continue to support downside in base metals. From US, the non-farm productivity and unit labor cost are likely to improve slightly and may help in recovering base metals.

As long as the US macroeconomic releases continues to disappoint, hopes of easing amplifies, on the back of which gold remains solid. After marking off the $1700, a level that was seen last in March 2012, gold holds nerve ahead of the mostly eyed ECB meet on Thursday. At present it has seen hardly any change at the Globex while the Asian stocks were hit on the back of slowing US economy.

Keeping the ECB reference rate intact with resumption in bond buying and an indication of higher inflation would be a supportive factor for euro and gold as well. However, the Euro area PMI numbers may stay more or less at the prior level later today while the Euro zone GDP may continue to shrink. The US releases however are expected to be slight positive for dollar in terms of increasing productivity and unit labor cost.

Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, increased to 1,293.14 tons, as on Sept 4. Silver holdings of iShares silver trust, the largest ETF backed by the metal, declined to 9,642.97 tons, as on Sept 4. Gold producers’ average total cash costs jumped 19% to a record $727 per ounce in the first half as output was little changed, as per Thomson Reuters GFMS.

Gold output rose slightly to 1,366 tons in the first half from a year earlier and second-half supply is expected rise 1.7% percent year-on-year to 1,482 tons, as per GFMS. Holdings of gold-backed exchange-traded funds rose to a record high of 71.889mn ounces (2,038 tons) by Sept. 4 while Silver ETF holdings stood at 501.503mn ounces, easing from 504.431mn hit in late August, the highest level since May 2011.

The Federal Reserve could act soon to shore up the frail economy. As the weak data reinforced expectations for another round of quantitative easing by the Fed, the ECB is under increasing pressure to cut excess borrowing costs ahead of a policy setting meeting on Thursday. Investors may adopt a cautious approach before the meeting, and the all-important U.S. non-farm payrolls data due on Friday. 

Silver Forecast September 5, 2012, Technical Analysis

The silver markets had another stellar day on Tuesday as prices keep rising higher and higher. Because of this, we think that it may be difficult to get a clean entry into this market currently. Silver tends to move very rapidly, as it is often considered to be the higher beta version of gold, and as such you simply must be traded with a bigger picture in mind.

We currently look at the $30 level as the floor in this market. The market looks set to run all the way up to the $35 level in the short term, and we actually believe that silver will eventually get $65 as well. This will be a straight shot up obviously, but over time based upon the massive descending triangle that was just negated we think that $65 is a reasonable target based upon the measurement.

There is actually no reason to sell silver at this point in time, and it should be bought on dips, and pullbacks to show any signs of support.

Silver Forecast September 5, 2012, Technical Analysis
Silver Forecast September 5, 2012, Technical Analysis

Silver Monthly Fundamental Forecast September 2012

Outlook and Recommendation

Silver closed the month at 31.67 after Mr. Bernanke’s stage setting address, that prepared markets for stimulus to be announced at the September 13th FOMC meeting.

Silver traders were positioning themselves ahead of Mr. Bernanke’s August 31st speech, but all month long the commodity was weighed down by poor eco data holding down prices on industrial metals. It was an uneasy pack between industrial demands and increased demands for precious metals. But by the end of Mr. Bernanke’s presentation the demand for precious metal and industrial metals soared. Silver hit its monthly high before backing down to 31.67

Highest: 31.818

Lowest: 26.938

Difference: 4.880

Average: 28.891

Change %: 15.93

With the hope of US stimulus all eyes are turning toward the ECB coming on September 6th

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.

Economic events for the month of May affecting EUR, CHF, GBP and USD

Date

Time

Currency

 

Forecast

Previous

Sep 1

2:00

CNY

Manufacturing PMI

49.8

50.1

Sep 3

 8:15

CHF

Retail Sales y/y

4.5%

3.7%

 

9:30

GBP

Manufacturing PMI

46.2

45.4

Sep 4

9:30

GBP

Construction PMI

50.1

50.9

 

15:00

USD

ISM Manufacturing PMI

50.1

49.8

Sep 5

8:15

CHF

CPI m/m

0.1%

-0.5%

 

9:30

GBP

Services PMI

51.5

51.0

Sep 6

12:00

GBP

Asset Purchase Facility

375B

375B

 

12:00

GBP

Official Bank Rate

0.50%

0.50%

 

13:15

USD

ADP Non-Farm Employment Change

141K

163K

 

13:30

EUR

ECB Press Conference

   
 

13:30

USD

Unemployment Claims

369K

374B

 

15:00

USD

ISM Non-Manufacturing PMI

52.6

52.6

Sep 7

8:00

CHF

Foreign Currency Reserves

 

408.6B

 

9:30

GBP

Manufacturing Production m/m

2.1%

-2.9%

 

9:30

GBP

PPI Input m/m

1.6%

1.3%

 

13:30

USD

Non-Farm Employment Change

121K

163K

 

13:30

USD

Unemployment Rate

8.3%

8.3%

Sep 9

2:30

CNY

CPI y/y

 

1.8%

Sep 10

Tentative

CNY

Trade Balance

 

25.1B

Sep 11

13:30

USD

Trade Balance

 

-42.9B

Sep 12

9:30

GBP

Claimant Count Change

 

-5.9K

Sep 13

8:30

CHF

Libor Rate

<0.25%

<0.25%

 

13:30

USD

PPI m/m

 

0.3%

 

13:30

USD

Unemployment Claims

   
 

17:30

USD

FOMC Statement

   
 

19:15

USD

FOMC Press Conference

   

 

Sep 14

13:30

USD

Core CPI m/m

 

0.1%

 

13:30

USD

Retail Sales m/m

 

0.8%

 

14:55

USD

Prelim UoM Consumer Sentiment

 

74.3

Sep 18

9:30

GBP

CPI y/y

   
 

9:30

GBP

Public Sector Net Borrowing

   
 

10:00

EUR

German ZEW Economic Sentiment

   
 

Tentative

GBP

BOE Inflation Letter

   

Sep 19

9:30

GBP

MPC Meeting Minutes

   
 

13:30

USD

Building Permits

   
 

15:00

USD

Existing Home Sales

   

Sep 20

3:30

CNY

HSBC Flash Manufacturing PMI

   
 

8:30

EUR

German Flash Manufacturing PMI

   
 

9:30

GBP

Retail Sales m/m

   
 

13:30

USD

Unemployment Claims

   
 

15:00

USD

Philly Fed Manufacturing Index

   

Sep 24

9:00

EUR

German Ifo Business Climate

   

Sep 25

15:00

USD

CB Consumer Confidence

   

Sep 26

15:00

USD

New Home Sales

   

Sep 27

9:30

GBP

Current Account

   
 

13:30

USD

Core Durable Goods Orders m/m

   
 

13:30

USD

Unemployment Claims

   
 

15:00

USD

Pending Home Sales m/m

   

Silver Fundamental Analysis September 5, 2012 Forecast

Analysis and Recommendations:

Silver is the miracle commodity asset these days, gathering momentum and strength from both the metals pack and the precious metals. Silver soared to trade at 32.267 out pacing gold’s increase. As central bank stimulus becomes closer to a reality between the FOMC, ECB and PBOC the likelihood of stimulus from at least two governments seems more probable.

Silver futures touched a 4-1/2 month high of $32.38 per ounce, before retreat slightly to $32.27 an ounce.

Stimulus would help support manufacturing and production which will increase demands on silver. Also stimulus is known for causing inflation, which strengthens the precious metals. Silver is a double header these days.

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 up to the data analysis and information in our weekly reports.

Economic Data September 4, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sep. 04

 

AUD

 

 

Current Account 

-11.8B

 

-12.2B 

 

-13.0B 

   

 

 

AUD

 

 

Interest Rate Decision 

3.50%

 

3.50% 

 

3.50% 

 

 

 

 

AUD

 

 

RBA Rate Statement 

 

 

 

 

 

 

 

 

 

CHF

 

 

GDP (QoQ) 

-0.1%

 

0.2% 

 

0.5% 

   

 

 

EUR

 

 

Spanish Unemployment Change 

38.20K

 

 

 

-27.80K 

 

 

 

 

USD

 

 

ISM Manufacturing Index 

49.6 

 

50.0 

 

49.8 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event

Forecast

Previous

Sep. 05

08:15

CHF

CPI (MoM) 

0.1% 

-0.5% 

 

09:30

GBP

Services PMI 

51.5 

51.0 

 

10:00

EUR

Retail Sales (MoM) 

-0.2% 

0.1% 

 

13:30

USD

Nonfarm Productivity (QoQ) 

1.8% 

1.6% 

 

13:30

USD

Unit Labor Costs (QoQ) 

1.5% 

1.7% 

 Sep. 06

10:00

EUR

GDP (QoQ) 

-0.2% 

-0.2% 

 

11:00

EUR

German Factory Orders (MoM) 

0.2% 

-1.7% 

 

12:00

GBP

Interest Rate Decision 

0.50% 

0.50% 

 

12:00

GBP

BOE QE Total 

375B 

375B 

 

12:45

EUR

Interest Rate Decision 

0.75% 

0.75% 

 

13:15

USD

ADP Nonfarm Employment Change 

140K 

163K 

 

13:30

USD

Initial Jobless Claims 

370K 

374K 

 

13:30

USD

Continuing Jobless Claims 

3315K 

3316K 

 

15:00

USD

ISM Non-Manufacturing Index 

52.5 

52.6 

Sep. 07

00:01

GBP

RICS House Price Balance 

-24% 

-24% 

 

09:30

GBP

Industrial Production (MoM) 

1.5% 

-2.5% 

 

09:30

GBP

Manufacturing Production (MoM) 

2.0% 

-2.9% 

 

09:30

GBP

PPI Input (MoM) 

1.7% 

1.3% 

 

09:30

GBP

PPI Input (YoY) 

1.2% 

-2.4% 

 

09:30

GBP

Industrial Production (YoY) 

-2.8% 

-4.3% 

 

11:00

EUR

German Industrial Production (MoM) 

0.2% 

-0.9% 

 

13:30

USD

Average Hourly Earnings (MoM) 

0.2% 

0.1% 

 

13:30

USD

Nonfarm Payrolls 

124K 

163K 

 

13:30

USD

Average Weekly Hours 

34.5 

34.5 

 

13:30

USD

Private Nonfarm Payrolls 

142K 

172K 

Government Bond Auction

 Date    Time   Country 

Sep 05 09:10 Sweden Nominal bond auction

Sep 05  09:30  Germany  Eur 5.0bn Sep 2022 Bund auction

Sep 05  09:30  UK  4.5% 2042 Gilt auction

Sep 06  00:30  Japan  Auctions 30Y JGBs

Sep 06  08:30  Spain  Bono auction

Sep 06  08:50  France  OAT auction

Sep 06  09:10  Sweden  I/L bond auction

Sep 06  15:00  US  Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07  15:30  Italy

Commodities Continue to Soar on Hopes of Stimulus

With the US and Canadian markets closed for the Labor Day End of Summer Holiday, expectations for a quiet low volume day, were anything but. Commodities continue to soar, even with the COMEX and the NYMEX closed and US traders on holiday.

Gold rose to its highest level in more than 5-months, as lackluster manufacturing data from around the globe fanned speculation of imminent easing measures from central banks. Gold is trading this morning at 1693.65 and continuing to climb

Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, increased to 1,289.52 tons, as on August 28. Silver holdings of iShares silver trust, the largest ETF backed by the metal, declined to 9,721.33 tons, as on August 30.

Moody’s Investors Service changed the outlook on its Aaa rating for the European Union to negative, warning it might downgrade the bloc if it decides to cut the ratings on the EU’s four biggest budget backers: Germany, France, Britain and the Netherlands. Although, the ECB’s President Mario Draghi told European lawmakers on Monday that purchases of short term sovereign bonds by the European Central bank would not breach European Union rules, The Euro strengthened against global currencies, after ECB president Draghi told European lawmakers, that he is open to the central bank buying government bonds on the secondary market. The German Constitutional Court will issue a ruling on the legality of the EFSF and the ESM on September 12, 2012.

The ICE dollar index, which measures the US unit against a basket of six major rivals, slipped to 81.172 from 81.242 in North American trade on late Friday. With US markets closed for the labor day holiday the DX moved on global sentiment and the outlook and interpretation of Mr. Bernanke’s speech.

Copper futures rose to a one-week high on Monday as weak factory data from China, worries over US jobs growth and Europe’s debt crisis strengthened expectations, that central banks and policy makers in the three regions will take action to boost economic growth.

Copper futures for Sept. delivery closed slightly lower at $3.4405 per pound on the COMEX of the New York Mercantile Exchange. LME lead stocks have dropped by almost a third over the past 2-weeks, and this could trigger a spike in short-term prices in September.

Lead stocks have slumped by around 92,000 tons or 32 percent, since Aug. 13 and half of those draw downs are due for delivery out of Singapore.

Crude oil futures closed on positive on Monday, as investors focused on the possibility of more stimulus measures and other moves to try to revive economic growth while traders ignored Chinese data, which showed a deepening slowdown in the world’s biggest energy consumer. Japan reported that for the first month, it did not import any crude oil from Iran. Crude oil dipped a bit on profit taking but recovered quickly, trading more on hope and dreams of monetary stimulus from China, the US and the ECB. Crude is trading this morning at 97.14 as rumors of strategic reserves once again begin to make the news. Last week Spain and Italy both stated that they were against any release of reserves.

The big event this week will be the much awaited announcements from Mr. Draghi due on the 6th. Markets are anticipating a big show, but Draghi and the EU have been known to oversell and then disappoint markets, which would see commodities tumble.

Silver Forecast September 4, 2012, Technical Analysis

The silver markets continued to look impressive on Monday, even as the volume shrank during the US Labor Day holiday. We have broken out above the $30 level, and it does look in fact like we are making a move towards $35.00 in the short term. However, we believe that the silver market has much further to go than that, and are willing to hang onto trades for the longer-term.

We have a core position already, and are looking to add to this position every time the silver market pulls back to a relatively supportive area. At this point in time, the $31 level looks pretty supportive, and we would buy any pullbacks to that area. Silver tends to run rather quickly, so we may or may not get an optimal entry. Nonetheless we are long of this market, and you plan on adding.

Silver Forecast September 4, 2012, Technical Analysis
Silver Forecast September 4, 2012, Technical Analysis

Silver Fundamental Analysis September 4, 2012 Forecast

Analysis and Recommendations:

Silver ended a quiet day at 31.888 adding a few pips. There was little positive news today, starting with a disappointing Chinese PMI and continuing on to eurozone PMI, which was pretty awful also.

The US and Canadian markets are closed for a holiday so there was very low volume. Precious metals continued to trade strongly on the hopes of central bank intervention. Markets are now predicting that the PBoC and the ECB will offer up some sort of stimulus this month.

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 up to the data analysis and information in our weekly reports. 

Actual versus Forecast Economic Releases. US and CAD markets are closed for a holiday

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sep. 03

 

KRW

 

 

South Korean CPI (YoY) 

1.2%

 

1.4% 

 

1.5% 

 

 

 

 

KRW

 

 

South Korean CPI (MoM) 

0.4%

 

0.5% 

 

-0.2% 

 

 

 

 

JPY

 

 

Capital Spending 

7.70%

 

8.90% 

 

3.30% 

 

 

 

 

AUD

 

 

Company Gross Operating Profits (QoQ) 

-0.7%

 

1.0% 

 

-3.7% 

   

 

 

AUD

 

 

Retail Sales (MoM) 

-0.8%

 

0.2% 

 

1.2% 

   

 

 

CNY

 

 

Chinese HSBC Manufacturing PMI 

47.60

 

 

 

47.80 

 

 

 

 

INR

 

 

Indian Trade Balance 

-15.5B

 

-8.8B 

 

-10.3B 

 

 

 

 

CHF

 

 

SNB Chairman Thomas Jordan speaks 

 

 

 

 

 

 

 

 

 

TRY

 

 

Turkish CPI (MoM) 

0.56%

 

0.25% 

 

-0.23% 

 

 

 

 

CHF

 

 

Retail Sales (YoY) 

3.2%

 

4.3% 

 

3.3% 

   

 

 

CHF

 

 

SVME PMI 

46.7

 

49.0 

 

48.6 

 

 

 

 

EUR

 

 

Italian Manufacturing PMI 

43.60

 

45.00 

 

44.30 

 

 

 

 

EUR

 

 

French Manufacturing PMI 

46.0

 

46.2 

 

46.2 

 

 

 

 

EUR

 

 

German Manufacturing PMI 

44.7

 

45.1 

 

45.1 

 

 

 

 

EUR

 

 

Manufacturing PMI 

45.1

 

45.3 

 

45.3 

 

 

 

 

GBP

 

 

Manufacturing PMI 

49.5

 

46.2 

 

45.2 

   

 

Economic Highlights for the upcoming week… Tiers 3 keep your eyes on these

Date

Time

Currency

Event

Forecast

 

Previous

 

 

Sep. 04

05:30

AUD

Interest Rate Decision 

3.50% 

 

3.50% 

 

 

 

15:00

USD

ISM Manufacturing Index 

50.0 

 

49.8 

 

 

Sep. 05

02:30

AUD

GDP (QoQ) 

0.8% 

 

1.3% 

 

 

 

14:00

CAD

Interest Rate Decision 

1.00% 

 

1.00% 

 

 

Sep. 06

02:30

AUD

Employment Change 

5.0K 

 

14.0K 

 

 

 

02:30

AUD

Unemployment Rate 

5.3% 

 

5.2% 

 

 

 

12:00

GBP

Interest Rate Decision 

0.50% 

 

0.50% 

 

 

 

12:45

EUR

Interest Rate Decision 

0.75% 

 

0.75% 

 

 

Sep. 07

15:00

CAD

Ivey PMI 

58.0 

 

62.8 

   

 

Government Bond Auction

Date  Time  Country 

Sep 04  00:30  Japan  Auctions 10Y JGBs

Sep 04  09:15  Austria  Bond auction

Sep 04  09:30  Belgium  Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills

Sep 04  14:30  UK  Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep

Sep 05  09:10  Sweden  Nominal bond auction

Sep 05  09:30  Germany  Eur 5.0bn Sep 2022 Bund auction

Sep 05  09:30  UK  4.5% 2042 Gilt auction

Sep 06  00:30  Japan  Auctions 30Y JGBs

Sep 06  08:30  Spain  Bono auction

Sep 06  08:50  France  OAT auction

Sep 06  09:10  Sweden  I/L bond auction

Sep 06  15:00  US  Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07  15:30  Italy

Labor Day, Merkel and Metals

On the first day of a new week and month, base metals are trading up by 0.2 to 0.72 percent at LME electronic platform supported by hopes of easing. US markets are closed today for the long Labor Day holiday weekend, so volume and prices are expected to be light.

The Asian equities are also mostly positive on similar anticipation coupled with optimism regarding the eurozone as traders now anticipate Mr. Draghi’s actions for the ECB coming on September 6th. Early today the Chinese HSBC manufacturing PMI dropped to near nine months low on fall in industrial new orders.

Lackluster eurozone and slowing global growth numbers are likely to weaken the export demand for Chinese goods and may heighten hopes of easing from the second-largest economy. China is about to witness a change in leadership this year and the Premier might continue to fine tune monetary policy to boost economic activity to fetch growth targets. Markets are expecting the PBoC to offer up some form of stimulus shortly, but without demand in the eurozone and the US improving, stimulus will meet deaf ears.

Equities including metals pack at London Metal Exchange are trading slightly positive on similar anticipation of easing from US and China.

In the Zone, the leaders have increased efforts to control the three-year long crisis and the ECB has also provided its support and may continue to instill optimism among investors. The ECB’s rate decision will be highly anticipated this week and markets are likely to brace the European developments and remain in the positive territory in today’s session.  Rumors are that Angela Merkel is traveling between Spain and Italy asking leaders to hold off on their requests for aid until new programs and court challenges are completed. Spain is against the wall with its regions requesting bailouts and Bankia needing additional funds. Greece is just about out of money and Italy, is about to hit the wall running as Monti continues to deny the need funding although economists that a bailout is inevitable.

The PMI numbers are due from Germany and UK, which may improve slightly after bottoming in the summer months and may support gains in metals. Japanese vehicle sales may also improve slightly and may continue to restrict downside. Today, the US markets are closed due to Labor Day and hence the session is likely to remain subdued due to lack of cues from the World’s largest economy.

After surging to the 22-weeks high, stirred by the Fed Chairman, gold future for December delivery are expect to maintain the momentum rally by gaining over $4 already this morning.

Australian retail sales declined unexpectedly by the most in almost two years. The AUD weakened to a five week low which would have created some pressure on the metal (weak iron ore prices due to lower demand in China) as we have seen gold has gains relatively less than silver. Expect gold to maintain the rally as traders are betting a price rise. From the Speculative traders, long positions have increased by 158491 contracts which took the net long position increased by 7%. For long term fundamentals, gold grades are declining at 8% CAGR, while cash cost are rising at 14%CAGR.

Silver as well is seen continuing Friday’s rally at the early Globex by over a percent despite contraction in

Chinese manufacturing and a deteriorated Australian retail sales. Market would have been eyeing the ECB meet on September 6 at which anticipation on Draghi is quite high after he boldly pledged to save Euro.  Silver traders have also betting on a price rise as CFTC data released on Friday showed speculative long positions have outnumbered the shorts by 28,638 contracts, the highest since March 6. Net-long position improved by 0.35% from a week earlier. Stimulus from any of the major economies, the US, the EU or China, would be a positive for silver as metal demand will increase. With the odds in favor of stimulus in the US, silver prices are likely to remain strong.

Silver Forecast September 3, 2012, Technical Analysis

The silver markets had an absolutely outstanding day on Friday as the Federal Reserve Chairman Ben Bernanke suggested that the central bank could engage in more U.S. Treasury purchases. This is essentially a form of quantitative easing, and as the ECB is going to be forced into doing the same it makes sense that the precious metals got a bit. After all, the Bank of Japan is aggressively easing its monetary policy, and there are several other banks around the world doing the same.

This is a market that has broken out now that it is above the $30 level. There is absolutely no interest on our part to sell silver at this point in time. In fact, we plan on buying this market every time it dips.

Silver Forecast September 3, 2012, Technical Analysis
Silver Forecast September 3, 2012, Technical Analysis

Silver Forecast for the week of September 3, 2012, Technical Analysis

The silver market broke a significant downtrend line over the last week in order to close just above the 31.50 level. This area is significant as it shows a down trending channel has been broken. Over time, we fully expect silver to try and recapture the highs from April of 2011, but it should be a volatile and bumpy ride up to that level.

We see the $35 level as the next target, and certainly would not sell silver now that it has broken out. Depending on how you were playing this market, you could simply buy spots over and let this market will run until it reaches its climax, or could possibly by physical silver as an investment. It does look like we are continuing the massive uptrend, and as such we are very bullish of silver right now. As for selling, we wouldn’t do it unless we somehow break down below the $25 level.

Silver Forecast for the week of September 3, 2012, Technical Analysis
Silver Forecast for the week of September 3, 2012, Technical Analysis

Silver Weekly Fundamental Analysis September 3-7, 2012, Forecast

Introduction: Silver futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of silver (eg. 30000 grams) at a predetermined price on a future delivery date.

Some Facts about Silver

Silver is a soft, shiny and heavy metallic element with a brilliant white luster. A very ductile and malleable metal, its thermal and electrical conductivity is the highest of all known metals.

Besides being used as a store of value, other main uses of silver include applications in areas such as electronics, photography and as antiseptics.

Consumers and producers of silver can manage silver price risk by purchasing and selling silver futures. Silver producers can employ a short hedge to lock in a selling price for the silver they produce while businesses that require silver can utilize a long hedge to secure a purchase price for the commodity they need.

Silver futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable silver price movement. Speculators buy silver futures when they believe that silver prices will go up. Conversely, they will sell silver futures when they think that silver prices will fall.

Weekly Analysis and Recommendations:

Silver ended the week at 31.767 gaining for the week, as precious metals were strong in the current environment. The more traders’ sentiment leaned toward the Mr. Bernanke announcing or support QE the most metals were able to gain.  Silver futures prices on Friday rallied sharply, hit a fresh five-month high and are now well into the 30.00 price level The precious metals markets took flight late Friday morning following the much-anticipated remarks by Federal Reserve Chairman Ben Bernanke at a Fed symposium in Jackson Hole, Wyoming. The Fed chief strongly hinted fresh, unconventional U.S. monetary policy stimulus will be implemented at some point. Indeed, he left the door wide open for a fresh quantitative easing initiative to be unveiled at the September FOMC meeting, or at some point in the not-too-distant future.

Date

Last

Open

High

Low

Change %

Aug 31, 2012

31.767

30.447

31.818

30.310

4.34%

Aug 30, 2012

30.445

30.755

30.965

30.270

-1.02%

Aug 29, 2012

30.758

30.898

31.025

30.615

-0.44%

Aug 28, 2012

30.895

30.820

31.048

30.578

0.24%

Aug 27, 2012

30.822

30.953

31.310

30.688

-0.40%

The thought of the Feds supporting QE gave more belief that the ECB would do the same this coming week and possibly the PBoC, which would be very positive for industrial metals.

There was more weak economic data coming out of the European Union. The EU unemployment rate rose to 11.3% in July, while inflation checked in at 2.6% in August, on an annualized rate, which was higher than expected. There were also rumors and rumblings in the market place that a German finance official was going to resign, which led to further speculation that European Union monetary policy will soon be eased further. We’ll find out more next Thursday when the monthly meeting of the European Central Bank occurs, including a highly awaited press conference from ECB head Mario Draghi. The market place does expect the ECB to announce a fresh monetary stimulus package soon.

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.

Tier 1 and 2 Economic Releases for August 27-31, 2012

Date

Currency

Event

Actual

 

Forecast

Previous

Aug. 27

SEK

Swedish Retail Sales (MoM) 

0.30%

 

0.20% 

-0.30% 

 

EUR

German Ifo Business Climate Index 

102.3

 

102.6 

103.2 

 

EUR

German Current Assessment 

111.2

 

110.8 

111.5 

 

EUR

German Business Expectations 

94.2

 

95.0 

95.5 

Aug. 28

AUD

HIA New Home Sales (MoM) 

-5.6%

 

 

2.8% 

 

EUR

GfK German Consumer Climate 

5.9

 

5.9 

5.9 

 

USD

CB Consumer Confidence 

60.6

 

66.0 

65.4 

Aug. 29

AUD

Construction Work Done (QoQ) 

-0.2%

 

1.0% 

7.8% 

 

CHF

KOF Leading Indicators 

1.57

 

1.50 

1.41 

 

EUR

German CPI (MoM) 

0.3%

 

0.2% 

0.4% 

 

USD

GDP (QoQ) 

1.7%

 

1.7% 

1.5% 

 

USD

Pending Home Sales (MoM) 

2.4%

 

1.0% 

-1.4% 

 

USD

Beige Book 

 

 

 

 

 

NZD

Building Consents (MoM) 

2.0%

 

3.0% 

5.7% 

Aug. 30

JPY

Retail Sales (YoY) 

-0.8%

 

-0.2% 

0.2% 

 

AUD

Building Approvals (MoM) 

-17.3%

 

-5.0% 

-1.0% 

 

AUD

Private New Capital Expenditure (QoQ) 

3.4%

 

2.4% 

7.7% 

 

EUR

German Unemployment Change 

9K

 

8K 

9K 

 

USD

Core PCE Price Index (MoM) 

0.0%

 

0.1% 

0.2% 

 

CAD

Current Account 

-16.0B

 

-15.0B 

-10.2B 

 

USD

Personal Spending (MoM) 

0.4%

 

0.4% 

0.0% 

 

USD

Initial Jobless Claims 

374K

 

370K 

374K 

 

USD

Continuing Jobless Claims 

3316K

 

3307K 

3321K 

Aug. 31

KRW

South Korean Industrial Production (YoY) 

0.3%

 

0.5% 

1.4% 

 

JPY

Unemployment Rate 

4.3%

 

4.3% 

4.3% 

 

JPY

Tokyo Core CPI (YoY) 

-0.5%

 

-0.6% 

-0.6% 

 

JPY

Industrial Production (MoM) 

-1.2%

 

1.7% 

0.4% 

 

GBP

Nationwide HPI (MoM) 

1.3%

 

0.1% 

-0.8% 

 

EUR

CPI (YoY) 

2.6%

 

2.5% 

2.4% 

 

EUR

Unemployment Rate 

11.3%

 

11.3% 

11.3% 

 

CAD

GDP (MoM) 

0.2%

 

0.1% 

0.1% 

 

USD

Chicago PMI 

53.0

 

53.5 

53.7 

 

USD

Michigan Consumer Sentiment 

74.3

 

73.6 

73.6 

Historical: From 2010 to present

Highest: 49.813 on Apr 25, 2011

Average: 28.468 over this period.

Lowest: 14.655 on Feb 05, 2010

 

Economic Highlights for the upcoming week… Tiers 3 keep your eyes on these

Date

Time

Currency

Event

Forecast

 

Previous

 

 

Sep. 04

05:30

AUD

Interest Rate Decision 

3.50% 

 

3.50% 

 

 

 

15:00

USD

ISM Manufacturing Index 

50.0 

 

49.8 

 

 

Sep. 05

02:30

AUD

GDP (QoQ) 

0.8% 

 

1.3% 

 

 

 

14:00

CAD

Interest Rate Decision 

1.00% 

 

1.00% 

 

 

Sep. 06

02:30

AUD

Employment Change 

5.0K 

 

14.0K 

 

 

 

02:30

AUD

Unemployment Rate 

5.3% 

 

5.2% 

 

 

 

12:00

GBP

Interest Rate Decision 

0.50% 

 

0.50% 

 

 

 

12:45

EUR

Interest Rate Decision 

0.75% 

 

0.75% 

 

 

Sep. 07

15:00

CAD

Ivey PMI 

58.0 

 

62.8 

   

Government Bond Auction

Date  Time  Country 

Sep 03  09:10  Norway  Bond auction

Sep 03  10:00  Belgium  OLO auction

Sep 04  00:30  Japan  Auctions 10Y JGBs

Sep 04  09:15  Austria  Bond auction

Sep 04  09:30  Belgium  Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills

Sep 04  14:30  UK  Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep

Sep 05  09:10  Sweden  Nominal bond auction

Sep 05  09:30  Germany  Eur 5.0bn Sep 2022 Bund auction

Sep 05  09:30  UK  4.5% 2042 Gilt auction

Sep 06  00:30  Japan  Auctions 30Y JGBs

Sep 06  08:30  Spain  Bono auction

Sep 06  08:50  France  OAT auction

Sep 06  09:10  Sweden  I/L bond auction

Sep 06  15:00  US  Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07  15:30  Italy

Silver Fundamental Analysis September 3, 2012, Forecast

Analysis and Recommendations:

Silver gained today and held on to gains after Mr. Bernanke’s address, which was non committal. Precious metals will most likely continue to hold on to gains until the September 13th FOMC. The metals pack along with precious metals was strong today, on the back of central bank easing.

Mr. Bernanke endorsed a program of QE and stimulus and monetary easing, which will help the economy and boost jobs. It is the timing of the programs that Mr. Bernanke, avoided, offering no guarantees, which means that the next two weeks will be very sensitive to eco data.

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 up to the data analysis and information in our weekly reports.

 

Economic Data August 31, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 31

 

KRW

 

 

South Korean Industrial Production (YoY) 

0.3%

 

0.5% 

 

1.4% 

   

 

 

JPY

 

 

Unemployment Rate 

4.3%

 

4.3% 

 

4.3% 

 

 

 

 

JPY

 

 

Tokyo Core CPI (YoY) 

-0.5%

 

-0.6% 

 

-0.6% 

 

 

 

 

JPY

 

 

Industrial Production (MoM) 

-1.2%

 

1.7% 

 

0.4% 

 

 

 

 

INR

 

 

Indian GDP (YoY) 

5.5%

 

5.3% 

 

5.3% 

 

 

 

 

GBP

 

 

Nationwide HPI (MoM) 

1.3%

 

0.1% 

 

-0.8% 

   

 

 

NOK

 

 

Norwegian Core Retail Sales (MoM) 

0.20%

 

0.50% 

 

-1.40% 

 

 

 

 

EUR

 

 

CPI (YoY) 

2.6%

 

2.5% 

 

2.4% 

 

 

 

 

EUR

 

 

Unemployment Rate 

11.3%

 

11.3% 

 

11.3% 

   

 

 

CAD

 

 

GDP (MoM) 

0.2%

 

0.1% 

 

0.1% 

 

 

 

 

USD

 

 

Chicago PMI 

53.0 

 

53.5 

 

53.7 

 

 

 

 

USD

 

 

Michigan Consumer Sentiment 

74.3 

 

73.6 

 

73.6 

 

 

 

 

USD

 

 

Fed Chairman Bernanke Speaks 

 

 

 

 

 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and US ( no CAD events)

Date

Time

 

Currency

 

 

Event

 

 

Previous

 

 

Sep 03 

08:15

 

CHF

 

 

Retail Sales (YoY) 

 

 

3.7% 

 

 

 

08:30

 

CHF

 

 

SVME PMI 

 

 

48.6 

 

 

Government Bond Auction

Date  Time  Country 

Sep 03  09:10  Norway  Bond auction

Sep 03  10:00  Belgium  OLO auction

Sep 04  00:30  Japan  Auctions 10Y JGBs

Sep 04  09:15  Austria  Bond auction

Sep 04  09:30  Belgium  Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills

Sep 04  14:30  UK  Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep

Sep 05  09:10  Sweden  Nominal bond auction

Sep 05  09:30  Germany  Eur 5.0bn Sep 2022 Bund auction

Sep 05  09:30  UK  4.5% 2042 Gilt auction

Sep 06  00:30  Japan  Auctions 30Y JGBs

Sep 06  08:30  Spain  Bono auction

Sep 06  08:50  France  OAT auction

Sep 06  09:10  Sweden  I/L bond auction

Sep 06  15:00  US  Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07  15:30  Italy

Silver Forecast August 31, 2012, Technical Analysis

The silver markets fell slightly during the session on Thursday, but stayed above the vital $30 level which was the scene of our breakout. Because of this, we are still bullish of this market, and would buy supportive candles all the way down to the $28 level. It isn’t until we get down below the $28 level that we think that this market can’t be bought. We believe that eventually monetary easing by several central banks around the world should continue to push precious metals prices higher, and silver of course will be no exception. We are buying supportive candles, and will not consider selling until we are below the $25 level.

 

Silver Forecast August 31, 2012, Technical Analysis
Silver Forecast August 31, 2012, Technical Analysis

Bernanke Freezes Gold & Silver

This morning markets are more or less frozen ahead of Mr. Bernanke’s address later today, base metals are trading mixed with Aluminum and Zinc slightly down while other metals are marginally up at LME The Asian markets are trading down after eco data released in Japan showed industrial production of remained weak along with vehicle production and may likely continue to pair in gains in base metals.

Presently, markets are likely to focus on the Fed Chairman’s Jackson Hole symposium and any comments from the Central chief may turn the metals pack. Fundamentally, downstream demand has remained weak along with trader participation and may likely continue to support downside in today’s session.

From the economic data front, the German retail sales and US factory orders are the only two supportive data for today’s session while the other indicators are likely to support downside. The Euro-zone unemployment is likely to increase due to prolonged slowdown in the member nations and may pressurize the shared currency extending weakness to base metals. Expect base metals to remain slightly sluggish during the day and may decline as the Fed may hint no QE – 3 and may continue with near zero interest rate till 2015. This may strengthen the dollar against a basket of currencies and may diminish returns to other country buyers.

Optimism of the Fed introducing easing enabled a market rally last week but gradually the confidence faded after US economic releases came in better than estimated.  As soon as Mr. Bernanke is complete regardless of the outcome, traders will turn their focus to Spain and Greece, and will pressure the euro, which will weigh on gold.

Gold as well remains on a mild corrective mode in early electronic trading while Asian equities slipped led by the Japanese bourses after the regional industrial production dropped unexpectedly. At present although the euro is showing little firmness, probably eyeing the improved German retail sales, expect the shared currency to pare the gains throughout the day. Because the Spanish Prime Minister delays in seeking bailout for Spain while its regions are continuously urging for aids, this is rapid turning sentiment against the euro and the EU.

Silver futures prices have hardly seen in any change at all.  Moreover, Japanese retail sales fell unexpectedly which may also create pressure on the metal. All eyes will be on the Jackson Hole Symposium wherein we expect no announcement of easing.

Expect precious metals to fall after Mr. Bernanke’s address and the euro to decline rapidly against the USD.

Silver Fundamental Analysis August 31, 2012, Forecast

Analysis and Recommendations:

Silver is trading at 30.91 holding steady in today’s session. The metals packs and precious metals more or less spent the day frozen ahead of the Jackson Hole speech by Federal Reserve Chairman Bernanke.

Silver holdings of iShares silver trust, the largest ETF backed by the metal, declined to 9,763.53 tons, as on August 28

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 up to the data analysis and information in our weekly reports. 

Economic Data August 30, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 30

 

JPY

 

 

Retail Sales (YoY) 

-0.8%

 

-0.2% 

 

0.2% 

 

 

 

 

AUD

 

 

Building Approvals (MoM) 

-17.3%

 

-5.0% 

 

-1.0% 

   

 

 

AUD

 

 

Private New Capital Expenditure (QoQ) 

3.4%

 

2.4% 

 

7.7% 

   

 

 

DKK

 

 

Danish Unemployment Rate 

4.70%

 

4.70% 

 

4.60% 

 

 

 

 

EUR

 

 

German Unemployment Rate 

6.8%

 

6.8% 

 

6.8% 

 

 

 

 

EUR

 

 

German Unemployment Change 

9K

 

8K 

 

9K 

   

 

 

EUR

 

 

Italian 10-Year BTP Auction 

5.82%

 

 

 

5.96% 

 

 

 

 

USD

 

 

Core PCE Price Index (MoM) 

0.0%

 

0.1% 

 

0.2% 

 

 

 

 

CAD

 

 

Current Account 

-16.0B

 

-15.0B 

 

-10.2B 

   

 

 

USD

 

 

Personal Spending (MoM) 

0.4%

 

0.4% 

 

0.0% 

 

 

 

 

USD

 

 

Initial Jobless Claims 

374K

 

370K 

 

374K 

   

 

 

USD

 

 

Continuing Jobless Claims 

3316K

 

3307K 

 

3321K 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event

Forecast

Previous

Aug.31 

07:00

GBP

Nationwide HPI (MoM) 

0.1% 

-0.7% 

 

10:00

EUR

CPI (YoY) 

2.5% 

2.4% 

 

14:45

USD

Chicago PMI 

53.5 

53.7 

 

14:55

USD

Michigan Consumer Sentiment 

73.6 

73.6 

Government Bond Auctions

Aug 31  14:30  UK  Publication of the Q4 Gilt operations calendar

Sep 03  09:10  Norway  Bond auction

Sep 03  10:00  Belgium  OLO auction

Sep 04  00:30  Japan  Auctions 10Y JGBs

Sep 04  09:15  Austria  Bond auction

Sep 04  09:30  Belgium  Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills

Sep 04  14:30  UK  Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep

Sep 05  09:10  Sweden  Nominal bond auction

Sep 05  09:30  Germany  Eur 5.0bn Sep 2022 Bund auction

Sep 05  09:30  UK  4.5% 2042 Gilt auction

Sep 06  00:30  Japan  Auctions 30Y JGBs

Sep 06  08:30  Spain  Bono auction

Sep 06  08:50  France  OAT auction

Sep 06  09:10  Sweden  I/L bond auction

Sep 06  15:00  US  Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07  15:30  Italy

Prepare For Fireworks In The Gold And Silver Sector

The Jackson Hole meeting is now upon us, a gathering of the worlds central bankers who will put their collective brain power to work in an attempt to resolve the economic woes that most sovereign states are now struggling to remedy.

As investors in gold and silver these meetings are important to us as they may provide us with clues as to what policy changes are are about to be unleashed upon us as they attempt to steer the world away from a global depression. The Federal Reserve is also charged with keeping unemployment low and so it needs to implement strategies that will hopefully boost the American economy.

We have experienced those actions through the process of quantitative easing. Now there are those investors who are interested in the precious metals sector who are of the opinion that without further monetary policy easing, which is a form of currency debasement, gold prices will tumble. We agree that the implementation of QE3 would drive gold prices much higher, however, we disagree that this is the one and only factor that will determine the future price of gold.

For instance take a look at the the chart below:

Prepare For Fireworks In The Gold And Silver Sector
Prepare For Fireworks In The Gold And Silver Sector

The chart depicts the 12 month rolling return percentage change in standard deviation terms, suggests that now is a good time to invest gold. We are also of the opinion that gold has been in a consolidation period for over a year, building a good base from which it can spring board to higher levels. Some of the central banks are now purchasers of gold whereas in the past they were sellers of the so called barbarous relic. The sentiment towards gold is negative, just ask any of your friends or colleagues what percentage of gold makes up their portfolio and generally they will answer zero percent. True this is only anecdotal evidence but we get the impression that the general public are oblivious to gold. Their participation in this bull market will probably not be felt until gold establishes a new all time high, but once they do take an active interest gold prices will well and truly rocket.

Back to politics. The Federal Reserve is not only player when it comes to monetary easing, the month of September is going to be a huge month for the Europeans. Mario Draghi, President of the European Central Bank has stated that he will do everything in his power to keep prices stable in the eurozone. This will require further bond purchases by the ECB in order to suppress rates to a level that the troubled member states can afford to pay. Germany has of course reservations about such policies, but they to have a lot to gain by keeping the eurozone intact, as it is a large market for Germany’s exports.

Then we have the Chinese, who have recently announced that a total of 8 trillion yuan will be spent in order to boost their own economy.

We can only conclude that although all eyes are focused on the Federal Reserve there are other factors in play that will drive gold prices higher and we are quietly confident that a new all time high of around $2000.00/oz will be achieved by New Years Eve. That is a move of some $350.00/oz, or 20% in a time period of four months. Ambitious you say; not for the quality performer that is gold.

We are now going to review our holdings with the view to ensuring that we are well positioned to take full advantage of this rise in both gold and silver prices and we very politely suggest that you conduct a similar review while the current price levels are still available to you.

Sleep tight.

Bob Kirtley

URL: www.skoptionstrading.com 

URL: www.gold-prices.biz

Email:bob@gold-prices.biz

Disclaimer: www.gold-prices.net or www.skoptionstrading.com makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents our views and replicates trades that we are making but nothing more than that. Always consult your registered adviser to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this letter. Options contain a high level or risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. Past performance is not a guide nor guarantee of future success. 

Metals and Energy Ignore Eco Data

Yesterday, markets were fairly quiet, with low volume and little activity. Traders seemed to be totally fixated on Friday’s address by Mr. Bernanke and the upcoming ECB meeting. Almost every news article fundamental and technical analysis report was focused on Jackson Hole and central banks. The upwardly revised US GDP or the skyrocketing housing data had little effect on the currency markets. This morning, Japanese retail sales tumbled, printing well below forecast and still no response.

Yesterday gold futures declined, as upwardly revised figures for US economic growth triggered profit booking in the precious metal after its recent rally above $1,675 per ounce, on speculation of new stimulus from the Federal Reserve. Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, increased to 1,289.52 tons, as on August 28. Silver holdings of iShares silver trust, the largest ETF backed by the metal, declined to 9,763.53 tons, as on August 28.

The ICE dollar index, which tracks the greenback against a basket of six major currencies, rose to 81.551, compared to 81.334…

Copper fell to a one-week low in heavy volume on Wednesday, pressured by signs of economic slowing in metals demand from China and nervousness ahead of central bankers meeting later this week.

Copper consumption in China, the world’s biggest user, is expected to expand this year at the slowest rate since 1997 as economic growth cools; according to Beijing Antaike Information Development Co. Copper usage may increase 5% to about 7.7mn tons supported by demand from the power industry.

Japan’s nickel imports from Indonesia rose 85% from a year ago to 190,445 tons in July, as per customs-cleared data.

Crude and Brent oil prices declined after US crude stockpiles unexpectedly gained and Hurricane Isaac made landfall, reducing the threat to offshore platforms and rigs in the Gulf of Mexico.  Still WTI crude oil only dipped 1.00 to trade at 95.00.

Japanese crude oil imports from Iran fell sharply in July from a year ago, but imports continued despite a halt in loadings by Japanese buyers to avoid running afoul of a European Union ban on insuring cargoes from the Middle East nation. Japans July crude imports from Iran totaled 126,726 barrels per day last month (624,585 kilolitres), down 52.5% from the same month a year ago.

Crude stocks, excluding oil held in the Strategic Petroleum Reserve, rose by 3.78mn barrels to 364.52mn barrels, gasoline inventories fell 1.51mn barrels last week to 201.23mn barrels and distillates, which include diesel and heating oil, rose 873,000 barrels to 126.08mn barrels, as per EIA.

Natural gas rallied nearly 1%, on news that Hurricane Isaac has prompted more production to go offline and on fears that flooding from the storm could damage the region’s natural-gas infrastructure.

Silver Forecast August 30, 2012, Technical Analysis

The silver markets had a slightly negative session on Wednesday, as it looks like the market is about to pullback and retest the $30 level for support. This would make sense, as it was so resistive previously, and large numbers like 30 tend to attract a lot of traders. With this being said, we think the silver market has broken out, and we are going to look for supportive candles right around the $30 handle in order to buy the market from. As for selling, we think there is no way we can do this unless we get below the $28 level, which of course is the point from which we broke out at. In other words, we would have to negate the entire move.

Silver Forecast August 30, 2012, Technical Analysis
Silver Forecast August 30, 2012, Technical Analysis

Silver Fundamental Analysis August 30, 2012, Forecast

Analysis and Recommendations:

Silver is trading at 30.962 as it hardly moved in today’s session, taking clues from the metals group and gold, markets were basically frozen ahead of Friday’s Bernanke Speech at Jackson Hole.

Silver holdings of iShares silver trust, the largest ETF backed by the metal, declined to 9,763.53 tons, as on August 28.

Global assets seemed to stand in place today, with light volume and little activity and little eco data. The big event today was the US GDP revision which revised US GDP upwards but was ignored by markets.

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 up to the data analysis and information in our weekly reports.

Economic Data August 30, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

Aug. 29

 

AUD

 

 

Construction Work Done (QoQ) 

-0.2%

 

1.0%

 

7.8%

 

 

CHF

 

 

KOF Leading Indicators 

1.57

 

1.50

 

1.41

 

 

EUR

 

 

German CPI (MoM) 

0.3%

 

0.2%

 

0.4%

 

 

EUR

 

 

German CPI (YoY) 

2.0%

 

1.8%

 

1.7%

 

 

USD

 

 

GDP (QoQ) 

1.7%

 

1.7%

 

1.5%

 

 

USD

 

 

Pending Home Sales (MoM) 

2.4%

 

1.0%

 

-1.4%

 

 

USD

 

 

Beige Book 

 

 

 

 

 

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

 

Currency

 

 

Event

Forecast

 

Previous

 

 

Aug. 30

08:00

 

DKK

 

 

Danish Unemployment Rate 

4.70% 

 

4.60% 

 

 

 

08:55

 

EUR

 

 

German Unemployment Rate 

6.8% 

 

6.8% 

 

 

 

08:55

 

EUR

 

 

German Unemployment Change 

8K 

 

7K 

 

 

 

13:30

 

USD

 

 

Core PCE Price Index (MoM) 

0.1% 

 

0.2% 

 

 

 

13:30

 

CAD

 

 

Current Account 

-15.0B 

 

-10.3B 

 

 

 

13:30

 

USD

 

 

Personal Spending (MoM) 

0.4% 

 

0.0% 

 

 

 

13:30

 

USD

 

 

Initial Jobless Claims 

370K 

 

372K 

 

 

 

13:30

 

USD

 

 

Continuing Jobless Claims 

3307K 

 

3317K 

   

Government Bond Auctions

Date Time Country 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US