DAILY REPORT : Friday 15th November 2013

MACRO: Janet Yellen had her nomination hearing overnight and she pretty much stuck to a predictably dovish line of rhetoric. She said that there are dangers of ending QE
too early or too late, adding (perhaps for emphasis) that it is important not to end QE 'too soon'. Yellen said that she believes that QE has had a 'meaningful' impact on growth
and that she did not see any 'misalignment' of asset prices. When asked about the timing of tapering, she said that there is no set time for tapering and even though labour market progress has been made, she and the FOMC want to make sure that gains are sustainable before tapering. Senator Sherrod Brown asked her about Fed policies and 'trickle down economics' where QE and other programs help the wealthy and few others. Yellen basically said that a rising tide of employment will lift all incomes over time—so
getting people employed remains the Fed's numero uno objective. On Interest on Excess Reserves, Yellen said that the Fed could cut the Interest rate but noted that in prior Fed studies there were concerns that a cut too close to zero could impair the money markets. The Senate Banking Committee said this afternoon that a Yellen vote may come up next week. The dollar was broadly sold off against this backdrop, but recovered into the close as it was realised there was nothing really new added by Yellen. Elsewhere US Initial jobless claims fell by 2,000 to 339k. This is the third week
in a row of relatively 'clean' claims readings and they've averaged ~340k over the period—similar to where we werein June and July. The 4-week moving average coming in at 344k.


PRECIOUS: Yellen's Dovish address to the Senate banking committee gave gold another leg higher overnight pushing through $1290 to a peak of $1294.30. Offers were fairly heavy above $1290 with a number of spec/macro offers looking to either extend short positions or forge new one's. As the session ground to a close, these offers weighed on the market and we closed around $1287. The psychological $1300 level will now be the first resistance to the topside, followed by the $1305-06 weekly lows
from early November and finally the converging 50 & 100 day MA's at $1319 and $1323 respectively. The fact that gold managed to successively close above the $1270-71 uptrend earlier in the week will see this form decent support in the interim, and we could see sizeable profit taking there if we revisit this. Following that the next key level will be the Oct 15 low at $1251.80, with a close below this likely to get very ugly. SPDR gold ETF holdings remained flat overnight at 27.83 million oz (865.79 tonnes), following a week of decent outflows. From here gold may come under further pressure, with direction derived from moves in the FX market. I think a $1270-1300 range should hold into next week. The market will now look next weeks FOMC minutes for any further information into a tapering timeline, which of course will influence gold and silver. Platinum remains supported by developments in South Africa with news that the largest Union at Angloplats (The world's largest platinum producer) received permission to strike after a mediator failed to resolve the latest wage deadlock.


ASIA TODAY: Another quiet open for Asia with the yellow metal dipping slightly after Ecomex started trading bringing up the days lows. Light bids into the Tocom open emerged with some short covering the main theme from Asian retail and HF's. Volume of course, as it has been the whole week, was very light on. Just prior to the SGE open spot gold pushed through $1290, but as was the case in NYK scaled offers in December gold hindered any break higher. After some light two way flows around $1290 eventually the buyers were exhausted and we began a very slow (and quite dull) descent. Silver tracked gold for the session and the PGM's were firmer. The G10
remained slightly weaker to stable against the USD with the standout being the AUD up 0.3% on the day. Equities had a very positive session with Nikkei currently +1.80%, Shanghai composite +2.3%, Hang Seng +1.5% and the All ordinaries +0.8%.


EUROPE TODAY: The London session stared just above $1290 and offers continued to emerge. Gold drifted the whole morning until it reached a low of $1280.40 before lunch time. The yellow metal stabilized then around $1282 until the Comex open. Bids started to appear after New York joined the session and gold jumped in minutes to the morning opening level. Gold analysts are now bullish on Fed stimulus outlook as Janet Yellen got nominated to run the Federal Reserve. US November Empire States Factory Index came at -2.2 after 1.5. Later the industrial production in US fell 0.1% in October supporting gold too and US factory output rose 0.3% in October after 0.1% increase. In its rise gold found a resistance at $1290 and traded just below it the rest of the day. In China gold jewelry demand jumped as WGC restates 1,000-Ton as target while in India, gold imports slumped in third quarter to lowest since 2009. Overall gold demand fell 21% last quarter as investors sold ETP holdings. Silver fell during the morning session but found some support near $20.55. The grey metal recovered then slowly with a boost as the Comex opened. Silver traded then in a tiny range around $20.77 and so during the entire afternoon. Platinum drifted lower the entire day to erase all yesterday’s rise. The white metal printed a low at $1431 and ended the day at $1440. Palladium stabilized above $735 during the morning but as New York opened stops triggered and the metal fell by $15. On a spot basis the 50dma was at $726, the 100dma at $727 and the 200dma at $728 and palladium found its supports to reach $733 during the night.

 

 

Although the information in this report has been obtained from and is based upon sources 1StopGold believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute 1StopGold' judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of an investment. This report does not consider or take into account the investment objectives or financial situation of a particular party.

DAILY REPORT: Monday 11th November 2013

MACRO: Finally the market appears to be reacting more rationally to economic data. There was always a risk that strong US Data releases would would prompt renewed Fed tapering expectation and result in a sell off of risk as has been in the past. However the reaction to Friday's much stronger than expected US NFP's of +204k (+120k expected, +163k revised up prior) was what would normally be expected. US equities rallied (Dow +1.08%, S&P +1.34%) as did US yields (10y rallied 15 bps to 2.75%) and the USD rallied broadly across the board. While the data added further weight to the potential for Fed tapering earlier than expected, it was also recognised as evidence of a growing economy, and one that hardly flinched in the wake of October's government

Read more: DAILY REPORT: Monday 11th November 2013

DAILY REPORT: Tuesday 5th November 2013

MACRO: It was a fairly lacklustre night across most markets, as investors pause to weigh up outcomes of the ECB meeting and US employment data amongst other things this week. Equities were generally firmer with Dow +0.15%, S&P +0.36%, FTSE +0.43% and the DAX +0.33%, while US 10y Treasury yields retraced slightly around 10 basis points closing at 2.603%. In data overnight US Factory orders for Aug and Sept were released coming in slightly below expectations but still improving over the time frame -
Aug -0.1% (+0.3% expected, -2.4% prior), Sep +1.7% (+1.8% expected, -0.1% prior). A number of Fed speakers hit the wires too, including Dallas Fed President Fisher
(hawk, 2014 voter) speaking in Sydney saying, "I think at the earliest possible moment we need to focus on transitioning back to having an interest rate driven monetary policy." On the other hand, he also said, "I can envisage us holding the base rate low for a very long time until we see an acceleration in the economy." San Francisco Fed President

Read more: DAILY REPORT: Tuesday 5th November 2013

DAILY REPORT: Thursday 14th November 2013

MACRO: US equities hit another all time high as the S&P 500 closed a healthy 0.81% higher led by stronger than expected quarterly sales from Macy's. The major department store operator said promotions had increased sales significantly and business was improving leading into the holiday season. Shares in the company rose an eye watering 9.70% which dragged the S&P Consumer Discretionary Sector Index 1.1% higher. To

Read more: DAILY REPORT: Thursday 14th November 2013

DAILY REPORT : Friday 8th November 2013

MACRO: The ECB shocked the market overnight cutting their main re-financing interest rate to a record low of 0.25 percent. There was speculation earlier in the week of a rate
cut, but this cooled as the week went on. Trading in the Euro was volatile following the announcement with EURUSD tumbling to a low of 1.3295 (200+ points) before bids began to emerge around 1.3300. The move was in two steps, the first one right after the rate announcement and the second one when the retained easing bias was announced and high US GDP announced. However, a substantial part of the initial move was subsequently reversed as it became clear that Draghi showed little enthusiasm for negative rates. The refi cut in itself does not make the ECB policy stance significantly more expansionary for all the well-known reasons of a distorted transmission mechanism and the risk may thus be that the euro climbs higher once again. What would be needed would be a decisive move towards either additional liquidity injections and/or negative deposit rates. If such a move were to occur, the euro would suffer, especially if combined with an early Fed tapering. In his statement ECB President Mario Draghi noted the board’s decision was influenced by “further diminishing price pressures” and “currently low annual inflation rates of below 1%”. Draghi also commented that the “risks surrounding the economic outlook for the euro area continue to be on the downside” and that it expects the “key ECB interest rates to remain at present or lower levels for an extended period of time”. The other surprise overnight was the improvement in the headline US 3Q Annualised GDP which rose to +2.8%
(+2.0% expected, +2.5% prior). This forced the greenback higher particularly against the JPY and EUR. As investors poured over the numbers however the details were not as strong as the market was looking for. Consumer spending growth was the smallest increase in two years, and there's a big divide on what the consumer is buying.
Goods (cars, tvs etc) were very strong, but services (fin services, electricity, cable tv etc) was very soft, the smallest increase since the recession. Also Capex spending was weak, highlighting that business remains reluctant to spend. On the positive side State and Local spending, and residential investment were both strong and the trend
is positive for next year. Elsewhere, the BoE kept it's benchmark rate on hold at 0.5% and it's asset purchase program unchanged, US jobless claims came in as expected at +336k (+335k expected, +345k revised up prior) and German IP was weaker at -0.9% MoM (0.0% expected, +1.4% prior).


PRECIOUS: Gold finally showed some signs of life overnight in what was a fairly volatile session within a moderately extended range. The ECB's rate cut was initially supportive of the metal forcing it higher and breaking above the resistance highs of $1320-21, which have been tested multiple times over the last few days, to post a new weekly high of $1326.20. The much better than expected 3Q US GDP then violently reversed the move and sent gold below the weekly support (~$1305) to a low of $1297.80 and closing around $1307. Volumes were sizeable with around 30% more trades going through Comex than seen this past few weeks. Positioning still remains fairly light on both sides and it was no doubt a frustrating session for day traders. Chinese buying on the move lower was fairly subdued which was interesting and it was mainly short-med term traders covering shorts at the low end of the range. With these sort of moves last night I would say we can expect some volatility for tonight's NFP's. As for the PGM's, the platinum followed the majority of risk assets such as equities/EUR lower overnight, despite wage negociations in South Africa not yielding any sort of positive result. Palladium on the other hand did it's own thing and continues to knock up against long term weekly resistance at $765. A close above this  would be a bullish signal.


ASIA TODAY: After last nights fireworks, today was always going to be a fairly subdued session as traders gathered thoughts and prepared for tonight's Oct NFP's. Gold opened where we left off yesterday with slightly more volume going through Ecomex than previous sessions this week. Prices remained fairly stable moving between $1307-1309.50 in the lead up to the SGE open. In what has become a bit of a theme this week, selling took hold in the lead up to Shanghai commencing and we dropped a few dollars to the days lows. Buying followed shortly after the futures open and we maintained the before mentioned range for the rest of the session, with light Asian physical buying matching off with mild spec selling interest. Most of the interest was in the currencies today. This was kicked off with the Australian 'Statement of Monetary Policy' being released. The statement was incrementally more dovish, having not changed their inflation forecasts meaningfully, yet revising growth forecasts in a notable way. Growth through 2014 was revised 50bps lower over the year, driven by (1) weaker
CAPEX expectations particularly in the mining sector and (2) the higher A$. The RBA is also increasingly articulating weakness of public demand growth (important as public demand 20% of GDP). Bottom line - a rate cut could still potentially be on the horizon. In China trade data was released and continued on the recent run of positive data. The trade surplus grew to 31.10 Billion (24.8 billion expected, 15.21 billion prior), imports rose to +7.6% (+7.4% expected, +7.4% prior) and exports were higher than expected at +5.6% (+1.7% expected, -0.3% prior). The AUD after dropping 35 pips following the SoMP, regained all the losses following the Chinese data. The EUR was surprisingly subdued given last nights volatility, with EURUSD consolidating in a 20 pip range
1.3405-1.2425, and the USDJPY saw good retail demand throughout the session.


EUROPE TODAY: London started the day at $1310 and traded in a $5 range awaiting for the Non Farm Payrolls. Meanwhile the precious metal remained weak as investors weighted US growth. During the morning Standard & Poor’s lowered France sovereign credit rating to AA from AA+. Later SNB’s Jordan said interest rates will remain low in Switzerland and that SNB will respond to property risks if needed. Ahead of the Comex open market jumped to $1314. Soon the release of the NFP pressured gold market. The Non Farm Payrolls came at 204k much better than the 120k expected or previous 148k with a jobless rate in line with expectations pulling gold trough $1305. Market stabilized around $1292 for a brief moment. The metal drifted again lower and printed a low at
$1281 before stabilizing around $1285. Today we also had the US Nov. Michigan Consumer Sentiment Index at 72.00 consensuses was at 74.50 versus final Oct. at 73.20. Silver jumped to $21.90 ahead of the US data and fell to $21.40 as the numbers were released. The grey metal pursued its drop to $21.26 but managed to recover just below $21.50 during the evening. Platinum followed the other two metals and fell from the morning $1460 area to $1437 while palladium drifted lower from the beginning of the day to finally trade in a $4 range around $756.

 

 

Although the information in this report has been obtained from and is based upon sources 1StopGold believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute 1StopGold' judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of an investment. This report does not consider or take into account the investment objectives or financial situation of a particular party.

DAILY REPORT: Monday 4th November 2013

MACRO: Over the weekend China Services PMI came in firmer than expected rising to the year high of 56.3 (55.4 expected) as signs of a rebound continue.This also follows
Friday’s better Manufacturing PMI. Despite the better headline it is worth noting that the Services PMI displayed a similar drop in new orders and export orders to Fridays
Manufacturing PMI. Risk sentiment remains more to the positive side at this stage (Dow +0.45%, S&P +0.29%, although there will be a test of the market's optimism this week with a heavy load of data releases and Central bank policy meetings. A Japanese holiday today will start the week off on a quiter note but central bank decisions from the

Read more: DAILY REPORT: Monday 4th November 2013

DAILY REPORT: Wednesday 13th November 2013

MACRO: Risk assets saw some consolidation yesterday as contrasting statements from various Fed speakers did little to clarify the uncertainty surrounding Fed tapering after the much stronger than expected jobs report last Friday. Atlanta Fed President Lockhart said that a tapering announcement "could very well take place" next month. He also mentioned that employment and inflation remain below the Fed's targets, and that "confidence" in the economy is "key" to any tapering decision. Later Minneapolis Fed President Kocherlakota said that tapering asset purchases "soon would be a drag on the economy" and that the labor market remains "disturbingly weak." Focus going forward today will shift to the UK as the BoE is set to release it's quarterly inflation report,

Read more: DAILY REPORT: Wednesday 13th November 2013

DAILY REPORT: Thursday 7th November 2013

MACRO: A mixed performance for the Dollar overnight with the greenback giving back some of yesterday’s gains vs the G10 but pushing a bit higher vs Emerging market
currencies. Equities had a fairly strong performance with risk still in favour with investors, the Dow closed +0.82% and S&P +0.43%, while European bourses were also flat to slightly firmer - FTSE flat, DAX +0.35%, CAC +0.79%. Looking ahead Central banks will now set the tone ahead of tomorrow's important US employment report, with both the ECB and BoE scheduled to deliver their policy decisions today. Neither is expected to change policy although there is an expectation that the ECB could open the

Read more: DAILY REPORT: Thursday 7th November 2013

DAILY REPORT: Friday 1st November 2013

MACRO: The EUR dominated price action overnight, under pressure over the 24 hour range but notably after the inflation rate in the region unexpectedly cooled to +0.8%
core yoy (+1.0% expected, +1.0% prior), fuelling speculation the ECB could cut interest rates. Preliminary Eurozone CPI significantly undershot forecasts in October (0.7% y/y vs. 1.1% y/y) with the pace of inflation falling to the slowest pace since November 2009. This prompted some economists to bring forward a rate cut to as early as December. Given that the market has under-priced this risk, some think that there is substantial scope for EUR to weaken in the next few weeks, especially considering it's overbought

Read more: DAILY REPORT: Friday 1st November 2013

DAILY REPORT : Tuesday 12th November 2013

MACRO: A very quiet session overnight due to various holidays (including US Veterans Day) around the globe, which resulted in low volumes and little movement, however risk appetite remains buoyant as the US and European equities continued to push higher (Dow +0.14%, Dax +0.30%, UK FTSE +0.30%), whilst the VIX fear index moved lower. The EUR squeezed broadly higher against most currency pairs overnight. The Euro's recovery from the recent lows likely reflect profit taking on shorts as well as reaction to reports in the press last week suggesting a sizable bloc on the governing council objected to last week's easing and would most likely lobby against further easing measures. European Central Bank speakers Weidman and Asmussen will be on the wires later today with a great deal of focus on their rhetoric in regards to the unexpected
interest rate cut last week which they were reportedly opposed to. There is a lack of top tier data releases today. CPI inflation data out of Germany and the UK are the pick of the bunch as well as the US NFIB small business optimism index. The market consensus is expecting the UK CPI inflation to be marginally lower in October from 2.7% yoy to 2.4% y/y. Core inflation is expected to fall below 2%, which would be the first time in four years. It appears that most of the markets attention is firmly on various Fed and ECB speakers
to try and gain an understanding of any further policy changes that may lie ahead.


PRECIOUS METALS: An extremely quiet night in the precious metals as gold witnessed a $7 range whilst silver had a meagre $0.16 cent range. After the initial sell off in Europe, a short covering rally saw gold jump up to 1287.80, but the demand was only short-lived and the market settled between 1282 -1284 for the rest of the session
in lackluster trading. The PGM's continue to garner a lot of attention due to the unrest in South Africa. Anglo American Platinum said a two day underground strike by 2,300 workers at its Dishaba mine protesting the suspension of a labour official ended last night. The Johannesburg based company released a statement saying "No production has been lost as this was a make-safe shift.....Employees will return to work for night shift tonight." As a result the white metal accelerated lower after earlier in the session trading just shy of 1450, ending the session at 1430. In other precious news there was a report doing the rounds that China's central bank may have secretly bought 300
tonnes of gold this year. China's official gold reserves are 1,054 tonnes, but this number hasn't been updated in four years. As the second largest economy in the world seeks to diversify their assets, there are numerous stories in the press, with some even estimating their total holding's are closer to 6,000 tonnes. Gold makes up only a little over 1% of the country's $3.6 trillion in reserves. The full report can be found at the following address:
http://www.mining.com/chinas-central-bank-may-have-secretly-bought-300t-of-gold-this-year-10585/

ASIA TODAY: Globex opened first thing this morning with a small bid, but only to the tune of a couple of hundred lots, and once the days highs were reached at 1283, the market retreated lower with traders happy to sell into strength. The Japanese were marginal offers whilst the Chinese didn't seem to have any interest at all today. Late in the PM session, gold was hovering just above the New York lows at 1280, and once this level was 'given', stops were triggered in December gold pushing the metal a further $3.50 lower before the market found its feet. The rest of the session was reasonably quiet, with a little physical demand propping up the market but iceberg offers on the futures capped any attempt to move higher. Not a great deal to report in terms of data today. The National Australia Bank business survey was a mixed bag, and likely not enough to change anyone's big picture view, including the RBA's. Activity indicators were still soft.
Business Conditions -4, unch, still near cycle lows. Only standout move was improvement in Exporter's Sales, to 2 (from -6), likely delayed reaction to lower AUD. Despite fall in Business Confidence (to 5 from 12), still well above long-run average.


EUROPE TODAY:Gold traded in a $5 range around $1281 this morning. The yellow metal printed the high of the day ahead of the Comex open. The New York session opened on the offer as the dollar gained while treasuries dropped with stocks. Gold managed to hold above $1279 during the morning until Lockhart said tapering `could
very well take place' next month. The precious lost $6 on that news and found a support at $1274. Gold couldn’t recover and the support broke before the close and gold lost another $13. Silver traded between $21.10 and $21.30 during the morning. As Lockhart spoke stops in silver triggered below $21.05. The grey metal stabilized around $20.90 but fell to $20.55 following gold after the close. Platinum drifted slowly lower as London opened but found some support as Johnson Matthey sees platinum's shortage biggest in 14 years. Indeed platinum shortfall would widen 78% to 605,000 ounces this year. The white metal hit $1443 but has been stopped in its rise as gold started its fall. Platinum fell also after the close but found some support at $1430. Palladium started the day with a small drop and pursued its fall as New York opened. During the afternoon the metal lost more than $10.

 

 

Although the information in this report has been obtained from and is based upon sources 1StopGold believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute 1StopGold' judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of an investment. This report does not consider or take into account the investment objectives or financial situation of a particular party.

DAILY REPORT: Wednesday 6th November 2013

MACRO: It was another fairly slow session overnight with a fairly subdued sentiment, as equities were slightly softer (Dow -0.13%, S&P -0.28%, FTSE -0.25%, DAX -0.31%)
 and US 10 y yields rose around 5 bps (2.67%) touching a peak of 2.673%. EURUSD continued to trade heavily approaching Mondays lows at 1.3449, as the the ECB meeting tomorrow looms as well as US 3Q GDP and US payrolls on Friday. The pressure remains on the pair as talks of easing measures continue amid a (albeit slight) downward revision of growth by the European commission which also shows a trajectory of declining inflation over the next 2 years. Elsewhere, we had more Fed

Read more: DAILY REPORT: Wednesday 6th November 2013

DAILY REPORT: Thursday 31th October 2013

MACRO: The FOMC made no changes to policy at this meeting overnight, maintaining the $85 billion per month ($40 billion MBS, $45 billion treasuries) asset purchase
pace until the Fed sees a "substantial improvement in the labor market". Forward guidance around interest rates was also unchanged with the Fed still likely to keep rates at 0- 0.25% into 2014. The Fed noted some concerns in slowing housing data and tight fiscal policy, but still maintained that risks to the outlook, on net, have improved since the fall. It seemed the market was expecting a more dovish assessment of post-shutdown risks, and as a result 10y bond yields jumped sharply after the statement from 2.48% to 2.54%. In the end, the statement was fairly neutral, though not quite as

Read more: DAILY REPORT: Thursday 31th October 2013