DAILY REPORT : Tuesday 5 Jun 2018

MACRO: U.S. factory orders contracted during April, sliding -0.8% MoM (exp: -0.5%) to follow an upwardly revised +1.7% gain in March (prev: +1.6%). Durable goods orders in the U.S. sunk -1.6% MoM during April to follow two consecutive monthly increases. Transportation equipment fell -6.0% to drive the headline figure, with durable goods ex-transportation adding +0.9%. Core capital goods orders (non-defence ex-air) increased by +1.0%, while shipments or core capital goods improved +0.9%. Equities in the U.S. added to recent gains on Monday, buoyed by Friday's jobs report and a calming of political concerns in Europe. The Nasdaq Composite spiked +0.69% to 7,606.459 points, a fresh record closing level for the bourse. The DJIA jumped +0.72% to 24,813.69 points, while continued strong performances to technology stocks (+0.79%) amid soft trade among energy stocks (-0.92%) helped support the S&P 500 +0.45% higher to 2,746.87 points. The greenback softened overnight, however bounced late in the session to pair the majority of declines. The DXY index ended the session -0.17% down after trading as much as -0.55% lower late in Europe. The AUD was the stand-out yesterday, gaining +1.07% against the dollar. U.S. treasury yields edged marginally higher overnight on a cooling of global tensions. The two year yield inched 3.8bps higher to 2.51% and the 10-year gained 4.4bps to 2.939%. Oil futures saw further weakness on Monday, as concerns over OPEC supply weighed upon benchmarks. WTI slipped -1.6% to a near 8-week (front-month) low of USD $64.75, while Brent crude sunk -2% to USD $75.29. European equities continued to benefit from a calmer political environment on Monday, as the majority of bourse's booked solid gains. The Stoxx Europe 600 ended +031% higher at 388.11 points, the German Dax tacked on +0.37% to 12,770.75 points and the Spanish IBEX 35 (+1.22%) out-performed following the change of power in Madrid.

PRECIOUS: Gold saw mixed price action on Monday, pushing toward USD $1,300 during European hours before paring gains in New York. Asian trade was generally heavy on Monday, however interest toward USD $1,290 restricted any test below Friday's New York low, with mild interest out of China helping to keep pricing buoyant. Sentiment picked up once Europe opened, supported by strength across currency majors against the dollar, in particular the euro (moving above 1.17) and the Australian dollar. A modest turn higher to the greenback and bid U.S. equities weighed upon the metal in New York, seeing bullion pull back from a USD $1,298.15 session high and closing around USD $1.50 lower on the session. Palladium saw lending interest in New York to slip back underneath USD $1,000, sliding around -1.5% from early European pricing. Platinum held a narrow range and kept the USD $900 support intact. Silver once again failed to capture USD $16.50, succumbing to offers around the figure to close flat on the session.

Another muted session for gold during Asian trade on Tuesday, held within a narrow range with a modest skew lower. Early session offers saw bullion toward USD $1,291, however mild interest out of China (premium holding around USD $6) helped to restrict any further extension lower and saw the metal back above opening levels as USD/China traded toward the lower end of the previous session range. In a mirror image to Monday's price action, gold turned lower during the Chinese lunch break to briefly test underneath USD $1,290, however once again resting interest provided an underlying level of support and the yellow metal was able to track higher into European hours. We should see broad support toward USD $1,289 - $1,291 (now looking more vulnerable), however it is currently difficult to see a catalyst for a retest of USD $1,300 (strong rejection on Monday) and the recent top and 200 DMA at USD $1,307.80. Both white metals tracked lower today, with palladium failing to recover from Monday's break underneath USD $1,000, while platinum slipped below the recent USD $900 support level. Data today includes Markit services / composite PMI prints from Italy, France, Germany, the Eurozone, the U.K. and the U.S. We also see Eurozone retail sales, ISM U.S. non-manufacturing composite PMI and the U.S. JOLTS report.

 

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 : Wed 30 May 2018

MACRO: A politically driven risk off session on Tuesday as developments out of Italy dictated flows. Equity markets in the U.S. traded heavily as the DJIA plummeted close to 400 points, shedding -1.58% to end the session at 24,361.45 points and in the process erase 2018 gains. Heavy trade across nine of 11 S&P 500 components led by financials (-3.37%) sent the bourse -1.16% lower to 2,689.86 points, while the Nasdaq Composite declined -0.50% to 7,396.594 points. With the ongoing political turmoil in Italy, the country looks headed for a fresh general election in August/September, with uncertainty over the country’s position in the European Union going forward weighing upon regional equity markets. The Italian FTSE MIB Index continued to tank on Tuesday, falling -2.65% to mark the fifth consecutive session in the red, while the broad Stoxx Europe 600 declined -1.37% and the German Dax dropped -1.53%. U.K. equities saw contagion from European weakness, taking the FTSE 100 -1.26% lower to mark the sharpest single-session decline since mid-March. U.S. treasury yields fell sharply as investors flocked to bonds, seeing the 10-year 16bps lower to 2.772%, while the two-year sunk 16.1bps to 2.319% to mark the largest one-day fall since March 2010. Italian bond yields soared to see the two-year a staggering 183bps higher to 2.54%, while the 10-year surged 50bps higher to 3.16%. Peripheral bonds in countries such as Greece and Portugal spiked, however the safe-haven German bund was favoured to see the 10-year yield 9bps lower to 0.253%. The greenback continued to strengthen on Tuesday as participants abandoned the euro. The DXY index gained +0.5% as the pair fell -0.8%, while the safe-haven yen strengthen against the dollar to temper gains somewhat.

PRECIOUS: Gold reversed an early bid tone to end Asian trade lower on Wednesday, as selling out of China outweighed the geopolitical risks continuing to develop in Europe. An early session attempt to consolidate above USD $1,300 was abruptly reversed once Shanghai opened, with China opening on the offer to swiftly drag the metal back underneath the figure. Afternoon flows saw continued bullion weakness even amid a softer dollar, testing briefly underneath USD $1,297 as European names filtered in.The yellow metal continues to search for directional cues from the developing issues out of Italy and to a lesser extent (currently) Spain, however as yet any attempts to consolidate through USD $1,300 and more importantly the 200 DMA at USD $1,307.80 have been met with resounding resistance. Expectations are that European developments and the continued softening of U.S. yields will underpin the metal, however currently the downtrend needs to be respected, with interest to play on the long side developing should the metal consolidate above USD $1,300. Data today includes French GDP, German Unemployment, German CPI, U.S. ADP employment, U.S. GDP and U.S. core PCE.

 

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 : Thursday 24 May 2018

MACRO: Minutes from the FOMC May meeting confirmed the Fed is not likely to raise interest rates too aggressively in the near term. Among the more dovish sentiments was the comment that "it was premature to conclude that inflation would remain at levels around 2%, especially after several years in which inflation had persistently run below the Fed's 2% objective". The probability of three further rate hikes in 2018 was reduced significantly, the markets are pricing in less than a 40% of a fourth rate hike this year. US equities were higher on release of the minutes, the Dow added 52.4 points, or 0.21%, to 24,886.81, the S&P 500 rose 8.85 points, or 0.32% to 2,733.29, while the Nasdaq gained 47.50 points, or 0.64%, to 7,425.956. There were wins for utilities (+0.90%) and REITs (+0.81%), while financials (-0.60%) led the laggards. European equities were lower, the EuroSTOXX lost 4.36 points, or 1.10%, to 392.58, the German DAX dropped 193.08 points, or 1.47%, to 12,976.84, and the London FTSE 100 fell 89.01 points, or 1.13%, to 7,788.44. The FOMC minutes did not have a profound effect on currencies markets, the US dollar index rose 0.37% to 93.952 but for the most part this move occurred prior to the announcement. The EUR dipped below 1.17 for the first time since November last year, and USD/JPY traded down to 109.56 before rallying back above 110. US treasury yields were lower, the 2 year yield eased 3.98 bps to 2.5282% and the 10 year yield fell 6.62 bps to 2.9935%. Oil prices were mixed, Brent added 0.18% to $79.71 while WTI declined 0.51% to $71.83. Base metals were broadly lower, with copper (-1.6%) leading the losses. In US economic data, the IHS Markit manufacturing PMI flash reading crept up to 56.6 in May from 56.5 in April, reaching the highest level since September 2014. The services flash reading rose to 55.7 in May from 54.6 in April. The Commerce Department reported that new home sales fell 1.5% to a seasonally adjusted annualised rate of 662k. In Asia today, as I write the Nikkei is at -1.32%, the Shanghai composite is at -0.05%, the Hang Seng is at +0.07%, and the ASX S&P 200 is at -0.05%. Tonight we have weekly jobless claims and existing home sales out of the US; an consumer confidence (flash and ECB monetary policy meeting accounts out of the Eurozone.

PRECIOUS: Some volatility creeping back in to the precious complex despite gold closing all but unchanged on the day.Gold opened at $1291 in Asia, traded quickly up to $1295, then eased back toward the opening levels as investors were caught in two minds with both EUR/USD and USD/JPY being sold. The SGE premium was around still hovering around $8-9, though not enough stem Asian selling as the EUR came off further. The market dipped to $1289 in late Asian hours but London were on the bid immediately and the yellow metal rallied to a week-high $1297. Conversely, NY were sellers from the opening bell as the EUR dropped below 1.17, dumping gold to the session low $1288. Trading was whippy through the remainder of NY hours and gold did receive a boost from the FOMC minutes. The metal wound up finishing the day all but flat at $1293. Silver was dumped to a low of $16.32 in early NY trading, before clawing back some of the losses through the afternoon. Palladium tumbled back down to test the recent lows at $966. The Philadelphia gold and silver index rose 1.21%. In Asia today, gold opened at $1293.90 and has remained within $1293-96. We have seen selling out of China with the SGE premium easing to $6-7, but USD/JPY falling below 110 has helped support the market. The yellow metal is at the high of $1295.80 as I write. Silver is flat at $16.45. In the PGMs, palladium remains unchanged while platinum has firmed to $907. Gold is still stuck within the recent range but there are some encouraging signs as the metal is trading near the top of the band despite the USD being bid. The topside target remains at $1300, a break above here would be a positive signal for the market. Support-wise there have been a lot of buyers under $1290, with the $1282 2018 low a key support level.

 

 

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 4 Jun 2018

MACRO: The May nonfarm payroll print outpaced expectations to increase 223k (exp: 190k), following a modestly downwardly revised 159k in April (prev: 164k). The U.S. unemployment rate declined to 3.8% from 3.9% to mark the lowest print since April 2000 and the participation rate eased to 62.7% from 62.8%. The broader 'U-6' measure of unemployment and underemployment, which includes those who have stopped looking and those in part-time jobs who want full-time positions eased to 7.6% from 7.8% previously. Average hourly earnings ticked up +0.3% MoM during April (exp: +0.2%) to see the annualised figure to +2.7% YoY from +2.6% previously, while average hours worked per week held at 34.5. The U.S. ISM manufacturing PMI rebounded during May, increasing to 58.7 (exp: 58.2) from 57.3 the month prior. Of the 18 manufacturing industries, 16 reported growth, while new orders, production and employment components all improved. Equities in the U.S. jumped on Friday following the stronger than expected jobs data. The DJIA added +0.90% to 24,635.21 points, strength across technology (+1.97%) helped the S&P 500 to a +1.08% gain and a close at 2,734.62 points, while the Nasdaq Composite ripped +1.51% higher and finished the session at 7,554.332 points. Over the week the DJIA sunk -0.5%, the S&P 500 booked a +0.5% gain and the Nasdaq Composite outperformed to add +1.6%. The greenback firmed modestly on Friday to see the DXY index +0.2% higher, making notable gains against the euro and pushing back above 109.00 relative to the yen. Following the U.S. payrolls data the market is now factoring in a 90% chance that interest rates will firm in the U.S. at next weeks FOMC meeting. U.S. treasury yields edged higher on Friday following the jobs print. The 10-year gained around 6bps to 2.90% and the two-year added 5bps to 2.472%. Spanish Prime Minister Mariano Rajoy lost a vote of no-confidence in parliament on Friday. The vote was called for by the main opposition Socialist party, whose leader Pedro Sanchez will become the new Prime Minister. European markets posted gains on Friday following the easing of political tensions in Italy. The Stoxx Europe 600 jumped +1.01% to 386.91 points and the German Dax gained +0.95% to 12,724.27. In London the FTSE 100 gained +0.31% after finding support from positive performances across Europe. Oil futures settled lower on Friday on concerns over higher production levels from Saudi Arabia and Russia. WTI sunk -1.8% to USD $65.81 per barrel to mark the lowest close since April 10, while Brent crude declined -1% to USD $76.79 per barrel.

PRECIOUS: Gold disappointed on Friday to consolidate underneath USD $1,300 following the strong jobs print in the U.S. Interest out of Asia kept price action buoyant around USD $1,300, however the metal lacked the follow through buying required to consolidate above the figure and drifted lower on dollar strength in Europe. Gold held a narrow range into New York hours as the euro failed to capture 1.1700 and participants sat on the sidelines awaiting the jobs data release. The headline U.S. jobs print and fall to the unemployment rate further strengthened the case for an interest rate increase in June to weigh upon the yellow metal in New York. A sharp sweep lower saw the session low of USD $1,289.50 printed, however underlying support was evident around USD $1,292 and the metal held this level throughout the remainder of the session. ETF's have been relatively resilient in recent weeks as gold trades around USD $1,300, however it is worth noting that outflows on Friday totalled close to 300k ounces. Silver saw whippy price action in New York and failed to claim the USD $16.50 pivot point, while Palladium ripped +1.6% higher to close above USD $1,000 and platinum traded resiliently to hold support at USD $900.

A range-bound but generally soft session for gold in Asia on Monday, unable to benefit from a modestly softer greenback to test toward Friday's New York support level in afternoon pricing. Much like Friday, interest around USD $1,292 kept price action buoyant throughout the majority of the session, however a break through the support triggered a stop loss run to the session low of USD $1,290.80. We should see broad support toward USD $1,289 - $1,291, however it is currently difficult to see a catalyst for a retest of USD $1,300 and the recent top and 200 DMA at USD $1,307.80. Political issues in Italy and Spain have eased for now, however there are still simmering trade tensions between the U.S. and a number of parties that may play a supportive role over the near-term to more so restrict declines rather than see a test higher. Silver continues to respect the recent range and looks to USD $16.50 as a pivot point, while platinum and palladium are holding the respective supports at USD $900 and USD $1,000. Data today includes U.S. factory orders and U.S. durable goods orders / capital goods orders.

 

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 : Tuesday 29 May 2018

MACRO: Quiet night in the markets with NY and London out for holidays. Heavy losses in Italian stocks weighed on the European markets as the probability of an early election increased after the populist Five Star and League parties failed to form government. The EuroSTOXX lost 1.26 points, or 0.32%, to 389.82, the German DAX dropped 74.55 points, or 0.58%, to 12,863.46. The EUR was hammered amid the turmoil in Italy as government bonds were sharply sold, falling to a 6.5 month low of 1.1608. USD/JPY traded down to 109.26. Oil prices continued to slide on fears several major producers will reverse production cuts that have been in place for over a year. Brent fell 1.49% to $75.30 while WTI gave up 2.08% to $66.47. The LME was closed for the holiday but MAY 18 CX copper slipped 0.33% to $3.057/lb. In Asia today, as I write the Nikkei is at -0.55%, the Shanghai composite is at -0.47%, the Hang Seng is at -0.87%, and the ASX S&P 200 is at +0.16%. Tonight we have loan growth and M3 money supply data out of the Eurozone.

PRECIOUS: Muted trading in the precious complex on Monday with the US and London holidays. Gold gapped lower $1 on the Asian open to $1299 and traded around $1297-99 for most of the day. The SGE premium was at $7 over loco London. Gold printed the session low $1295 in the PM session as the EUR, which climbed through 1.17 earlier in the day, reached it's peak. The sell-off in EUR began on the news out of Italy and gold made a grind higher. The yellow metal tested the all important $1300 level as NY came in for their shortened session, and closed a little lower at $1297 in light trade. Trade in silver was very quiet, the grey metal remained within a tight 5c range throughout the session. Very light trading in PGMs also. The Philadelphia gold and silver index lost 1.07%. In Asia today, gold was once again testing $1300 as the US dollar was sold against the yen. The SGE premium eased to $4-5 prompting some selling action out of China. Silver is under pressure late in the day, the grey metal is sitting around the lows at $16.35. Palladium experiencing a late sell-off also, currently right at the low of $977. There appears to be buyers for gold at $1295, and we should see further support at the recent low of $1281. On the upside, a consolidation above the key $1300 level will be the first step in any move higher.

 

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 : Wed 23 May 2018

MARKETS/MACRO: Markets traded within fairly tight ranges overnight, with a light data calendar and a more cautious tone following President Trump's comments that there was a 'substantial chance' the N Korea summit won't work out. U.S. equities closed lower on the day, with major indices turning decisively negative in afternoon trading and ending near their lows of the day as uncertainty over trade policy and other geopolitical issues remained high. The Dow Jones Industrial Average dropped -178.88 points, or -0.72%, to 24,834.41, the S&P500 liquidated some -8.57 points, or -0.31%, to 2,724.44 and the NASDAQ Composite slumped -15.58 points, or -0.21%, to 7,378.46. The best performing sector on the day were Financials (+0.59%), while Energy (-1.28%) struggled. European stocks moved higher, with Italy remaining in focus as the country’s president considered the candidate put forward to lead their coalition government. The EuroFirst 300 index crept up +4.46 points, or +0.29% to 1,557.00 and the Euro Stoxx 600 advanced +1.07 points, or +0.27% to 396.94. U.S Treasury yields continue to hover around the ~3.05% level, remaining largely unchanged, while the dollar took a bit of a step back, the DXY remaining firm around the mid 93 mark. Crude oil prices were mixed on the day, Brent edging higher, while WTI eased modestly - with issues in Venezuela still capturing market attention. Geopolitical factors also kept investors on their toes with U.S Secretary of State Pompeo demanding Iran halt all uranium enrichment and allow nuclear inspectors access across the country, which as expected, did not go down too well, Iran officials immediately rejecting it.

Trade tensions continued to thaw with China announcing a reduction in automotive tariffs and the U.S working towards a deal to overturn the ZTE (China tech firm) ban. For car imports, the 25% tariff levied on 135 items and the 20% duty on four items will both be reduced to 15%. Import tariffs for 79 auto parts will be reduced to a standardised 6%, down 46% on average. After the move, the average tariff rate on vehicles will stand at 13.8%, while auto parts will be 6%. China imports around USD80bn worth of vehicles and parts annually. Separately, WSJ reported that the US and China will settle the ZTE ban. The details are still being ironed out, but they are expected to involve changes to management and board seats and a significant fine. However, President Trump told CNBC that there was no deal on ZTE and that the fine could be around USD1.3bn. Elsewhere, Trump suggested that his historic meeting with the North Korean leader, Kim Jong Un, could be delayed and that President Xi Jinping of China might be responsible for a breakdown in the pre-summit talks. Tensions between Iran and the U.S also continue to remain high, with the White House saying any new nuclear deal with the U.S. would require Iran to stop enriching uranium and to pull its support for militant groups in the Middle East.

PRECIOUS: Gold managed to hold onto gains overnight, pushing back through $1295 on a few occasions, although ultimately running into some solid supply above there. The yellow metal opened yesterday around $1292 and after trading sideways for the first few hours eventually began to ease lower. SGE, of which the premiums have been unimpressive following the move through $1300 (Spot), were light sellers, which saw the metal ever so slowly recede down towards $1290. The USD had paused throughout the Asia day after NY's sell-off, which failed to really steer the precious complex in either direction. Late in Asia gold touched the intra-day lows of $1288.20, before bouncing back strongly to $1296 as the USD sell-off resumed. Comments by Trump on the status of the North Korea summit also helped the metal stay lofty. There were noticeable and sizeable offers above the market however and as a result we slowly ground our way lower over the duration of the NYK day to ultimately settle around $1291. Gold's performance was a little disappointing given silver managed to rise to $16.67, palladium $1003 and platinum $909.50. Regardless, flows were very light across the entire complex with traders happy to take some respite from volatility over the past few days. For now we see stubborn resistance at $1298-1300, with thick offers from producers, real money and leveraged sellers alike prevalent on runs higher. To the downside resistance sits at the previous low and 61.8% Fibonacci retracement levels between $1282-86. We think the gold will be in for a period of consolidation in the short term and are monitoring moves in ETF holdings - which have surprisingly held rather steadily given the move through $1300 support. The SPDR's holdings have only shed around 4.13 tonnes (~133,000 oz) since the May 15 collapse.

USDTRY was the main mover this morning jumping some +3.1% on the gold open from 4.6720 to 4.8175, on the back of a headline saying 'Turkey threatens 267 million in tariff against US', as well as the Turkish President looking to take control of monetary policy (old headline). The huge move caused a bit of unease and there was a little bit of safe-haven gold buying going through early on. The yellow metal rose steadily throughout the morning opening at $1291 and pushed up towards the highs right around the TOCOM open ($1295.70). As was the case yesterday there was solid supply above $1295 and we did not trade there for long, sliding back to $1293 by the Shanghai open. Not a lot to report on the SGE, similar to yesterday it was primarily small offers that appeared due to the soft premium (USD$5.50-6.50 over spot). This put a bit of a drag on the spot gold trading back towards $1292 then trading sideways through the SGE lunch break. Once the SGE opened and early European traders began to man their desks the USD started to rally, particularly against AUD (-0.47% currently), CAD(-0.35%) and GBP (-0.25%). This exerted downward pressure on the precious metals gold and silver at time of writing trading on their lows. On the data calendar today, look out for a host of Markit PMI's from France, Germany, Eurozone and the U.S, as well as UK CPI and PPI, U.S FOMC minutes and new home sales and finally Eurozone consumer confidence.

 

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 : Friday 01 Jun 2018

MARKETS/MACRO: U.S. stocks finished broadly lower Thursday, with the U.S. decision to impose tariffs on steel and aluminium imports from the European Union, Canada and Mexico sparking promises of retaliation by trade partners and reigniting fears of a global trade war. The Dow Jones Industrial Average retreated -251.94 points, or -1.02%, to 24,415.84, the S&P500 gave back -18.74 points, or -0.69%, to 2,705.27 and the NASDAQ Composite fell -20.337 points, or -0.27%, to 7,442.117. The best performing sector was Utilities (+0.11%), while the worst performing sector was Consumer Staples (-1.61%). European equity indices also sagged, led by sell-offs in Germany and Spain as the new U.S tariffs imposed on the EU soured sentiment. The EuroFirst 300 Index gave up -10.19 points, or -0.68% to 1,498.60 and the EuroStoxx 600 sank -2.43 points, or -0.63% to 383.06. Regionally the DAX cratered -1.40%, FTSE100 dipped -0.15% and the CAC40 relinquished -0.53%. Crude oil prices were mixed, with Brent prices holding steady (+0.12% to $77.59) while WTI come under pressure (-1.6% to $67.10). A drop in inventories in the U.S was overshadowed by U.S output which jumped to a record high level. Inventories fell by -3.62m barrels to 434.5m barrels, while rising U.S output, which rose 44k b/d to 10.769 million b/d. With the markets still concerned about supply-side issues in OPEC, the Brent-WTI spread has blown out to nearly USD11/bbl, the highest level for some three years. Elsewhere, short-end U.S Treasury yields were up a touch, although the benchmark 10 yield was essentially unchanged (2.427%). Italian yields fell sharply (2-year down 58bp) with the political uncertainty present over the past month seeming to come to an end.

Italy’s Prime Minister-designate Giuseppe Conte on Thursday presented his cabinet list to President Sergio Mattarella, who will swear in the government today at 4 p.m. (local time) in Rome. The agreement ends three months of political deadlock that began with an inconclusive election on March 4. After being sworn in, the government will face confidence votes in both houses of parliament, where the coalition allies — the far-right League and the anti-establishment 5-Star Movement — have clear majorities.

The United States on Thursday said it was moving ahead with tariffs on aluminium and steel imports from Canada, Mexico and the European Union, ending a two month exemption and potentially setting the stage for a trade war with some of America's top allies. U.S Commerce Secretary Wilbur Ross told reporters on a telephone briefing that a 25% tariff on steel imports and a 10% tariff on aluminium imports from the EU, Canada and Mexico would go into effect at midnight tonight. The move prompted swift retaliatory measures from its three major allies as: i) the EU will impose tariffs on $3bln of U.S imports from June 20, ii) Canada - tariffs on $13bln worth of U.S imports from 1 July and iii) Mexico – proportional tariffs on U.S farm and industrial products.

On the data front, it was somewhat of a busy day. In the U.S, Initial jobless claims declined by -13k to 221,000 in the week ended May 26, less than the polled 228,000 reading and; continuing claims dropped by -16k to 1.726 million (Bloomberg consensus 1.733 million). U.S consumer spending increased more than expected in April, a further sign that economic growth was regaining momentum early in the second quarter, while inflation continued to rise steadily. The Commerce Department said on Thursday that consumer spending, which accounts for more than two-thirds of U.S economic activity, jumped +0.6% last month, the biggest gain in five months. Data for March was revised up to show spending rising +0.5% instead of the previously reported +0.4% increase. Across the Atlantic, Euro-zone inflation indicators flexed some muscle in May, boosting the EUR on Wednesday. Eurostat is projecting a surge this month, with CPI Flash Estimate rising to +1.9%, its highest level since April 2017. Core CPI Flash Estimate improved to +1.1%, marking an 8-month high. Inflation levels are being closely watched by the ECB, which is scheduled to wind up its stimulus program in September. The ECB reduced its stimulus in January, from EUR 60 billion to 30 billion each month. Still, inflation remains well below the ECB target of around 2.0%.

PRECIOUS: Gold remains caught in a range at present, trying for a fourth time in the last week to push through the $1305-1308 region, yet again failing overnight. The yellow metal opened around $1302 in Asia yesterday and it appeared that the market was perhaps a little short, with some light spec buying seen throughout the early hours, pushing us a few dollars higher. It seemed some stops went through prior to China open, the thin conditions precipitating a sharp move to $1305 before dipping back off into the Shanghai open. USDCNY had been heavy throughout the day which diminished the selling pressure out of China and gold ticked higher slowly over the morning. During the China PM session some stops were hit again on the break of $1305 and it quickly spat up to the days high before consolidating around $1304. We tried a couple more times above $1305, yet every time we pushed into this region the market was met with some solid producer supply. Into the NY session the metal sold off sharply below $1300 although quickly recovered back towards $1305, where more producer and real money sellers were waiting. Ultimately the metal rounded out the day close to the lows and back beneath $1300. Gold remains choppy at this juncture and lacking any technical direction at present, although we do believe a short term base has likely formed around $1280-90.

Not a great deal of price action today for the metals, gold remaining contained to a tight $2 range so far between $1298.50-1300.50. China have so far remained fairly neutral, with the premium for onshore traders still hovering around $4.50-5.50 over the loco London price. China were net sellers although they certainly weren't doing so in any size which kept the market fairly flat. We did see some light retail buying below $1300 although again it was nothing of notable size. It was a typical pre-NFP session, with traders and investors happy to relax and await the data to reassess direction next week. Equities at time of writing are mostly lower, in line with the U.S and Europe, the Shanghai Composite at time of writing -0.4%, Hang Seng -0.1% and ASX200 -0.4%. The Nikkei is the outlier which is a touch higher on the day so far, up +0.3%. Currencies are mostly quiet, the G10 generally a little softer vs. the USD, USDJPY currently up through 109 at 109.18 and GBP off -0.25% at 1.3260. Crude is a touch softer WTI -$0.20 at $66.90 and Brent down -$0.05 at $77.50. As mentioned earlier U.S employment data will be the main focus this evening, although we also have a number of European Manufacturing PMI's and aswell as U.S construction spending and ISM manufacturing data.

 

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 28 May 2018

MACRO: It looks as though the U.S. – North Korea summit scheduled for June 12 is back on again following a meeting between Kim Jong-un and South Korean President Moon Jae-in on Saturday. The respective leaders met unannounced in the village of Panmunjom, in which according to President Moon, North Korean leader Kim Jong-un again made it clear his commitment to a complete denuclearisation of the Korean peninsula. President Trump responded to the news via twitter, announcing a United States team had arrived in North Korea to make arrangements for the upcoming summit. Durable goods orders in the U.S. declined -1.7% MoM during April (exp: -1.3%) to follow an upwardly revised +2.7% during March (prev: +2.6%). The main drag on the headline print was a -29% fall to civilian aircraft orders, while orders ex-transportation pushed +0.9% MoM higher over the period (exp: +0.5%). The closely watched proxy for business spending plans, core capital goods orders (non-defence excluding air) added +1.0% (exp: +0.7%) to reverse a -0.9% fall the month prior, while core capital goods shipments increased +0.8% MoM (exp: +0.4%). Equity markets in the U.S. ended mostly lower on Friday as weaker crude prices weighed upon energy stocks. The DJIA ended the session -0.24% lower at 24,753.09 points, however was able to cling onto a +0.2% gain on the week. The S&P 500 saw weakness across energy (-2.61%) to see the bourse -0.24% lower to 2,721.33 points, however was also able to end the week in positive territory, returning +0.3%. Declines to crude futures were one of the main talking points on Friday, weighed upon heavily by news that OPEC and Russia may raise production by as much as 1 million barrels per day to offset shortfalls from Iran and Venezuela. WTI settled around -4% lower at USD $67.88 per barrel, while Brent crude fell -3% to USD $76.44 per barrel. The greenback returned to strength on Friday following an easing of geopolitical tensions to see the DXY index end around +0.5% higher.

PRECIOUS: A generally soft start to the week for bullion during Asian trade on Monday, seeing a modest risk-on tone weigh upon the metal following the developments on the Korean peninsula over the weekend. After a test of USD $1,300 in New York on Friday, the yellow metal opened below the figure and continued to slide in thin early session flows. Interest toward USD $1,296 kept the metal buoyant following the early declines to see price action back toward USD $1,300, however the bid tone was short-lived once Shanghai opened, dragging the metal lower once again as China traded at a premium toward USD $5. Afternoon trade saw a move back toward USD $1,300 as the euro pushed back above 1.1700 relative to the greenback, however resting offers once again thwarted a move back above the figure. With the U.K. and the U.S. both on leave today we expect price action to remain within a relatively tight range, seeing support broadly toward USD $1,290 - $1,295, while resistance cuts in at USD $1,300 and the 200 DMA at USD $1,307.75.

 

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 : Tuesday 22 May 2018

MACRO: Minneapolis Fed President Neel Kashkari voiced concerns on Monday that the Federal Reserve may overdo interest rate hikes and potentially push the economy into a recession. Kashkari noted that the low wage growth is suggesting of continued slack in the labor market and indicated it may be prudent to react once wages pick up. The Chicago Fed national activity index inched higher during April, buoyed by strong performances across factories and jobs that offset a softer contribution from housing. The index improved to 0.34 (exp: 0.30) from an upwardly revised 0.32 in March (prev: 0.10), while the three-month moving average ticked up to 0.23 from 0.11 in March. Production related indicators contributed 0.27 to the index from 0.19 in March, employment related indicators were responsible for 0.10, while personal consumption and housing contributed -0.05 in April. The easing of trade tensions between the U.S. and China buoyed equity markets on Monday, seeing the DJIA back above 25,000 points to mark the highest close since mid-March. The bourse ended the session +1.21% higher at 25,013.29 points, while the S&P 500 added +0.74% to 2,733.01 points as all 11 sectors led by industrials (+1.53%) closed higher. The greenback pared early session gains on Monday, after strong demand in Asia reversed in London and New York to see the buck finish around -0.20% down on the session. The dollar lost ground against the euro, however was able to inch higher against the yen to break above 111.00. U.S. treasury yields meanwhile were little changed on Monday, holding toward the top of the recent range, however unable to find the impetus for a fresh move higher as ‘trade war’ tensions subside. The 10-year held around 3.065% and the two-year inched 2bps higher to 2.570%. Oil futures in the U.S. notched a fresh more than three-year high on Monday as fears over fresh sanctions on Venezuela stoked supply concerns. WTI spiked over +1.3% to end the session at USD $72.40 per barrel, while Brent crude reversed early session weakness to end +0.8% higher at USD $79.40 per barrel.

PRECIOUS: A volatile session for gold on Monday, pressured to a USD $1,281.90 session low on the back of dollar strength in late Asian hours, before ripping higher as the greenback reversed. Modest early Chinese buying did little to stem Asian offers, as gold traded underneath USD $1,290 with little supportive pricing. China's afternoon session saw further weakness as the dollar continued to push higher, taking the yellow metal sharply below USD $1,285 on a stop loss run amid Comex interest, before finally seeing supportive pricing underneath the level to restrict any further declines. A period of consolidation gave way to a reversal of the Asian session declines In London, with the metal benefitting from a softer greenback and extending to a session high of USD $1,293 in late New York. Notably ETF's recorded outflows on Monday of approximately 140k ounces. Platinum and palladium were the main movers during the session, with palladium notably seeing volatile top-side moves to book a +2.5% gain on the session, while platinum gained +1.4%.

Asian trade today saw participants taking profits following the previous session's move above USD $1,290, however demand toward the figure was evident on Comex and acted to restrict any further weakness. It is also worth noting we observed heightened interest out of Asia, particularly evident within the physical space following Monday's reversal. Interest underneath USD $1,290 should remain and we expect this level to broadly act as a pivot point, with a possible extension as low as USD $1,286 and support at USD $1,275 below this. Layered top-side offers continued to crowd the path toward USD $1,300 and it's difficult to see the metal running away through this resistance level. Silver remains resilient and we look to USD $16.50 as a directional pivot point, while platinum and palladium have thus far been unable to consolidate above USD $900 and USD $1,000 respectively. Data releases today include the U.S. Richmond Fed manufacturing index.

 

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 : Thursday 31 May 2018

MACRO: A softening of political tensions in Italy on Wednesday after the 5 Star Movement and the League commenced talks to again attempt to form a coalition government. There were conflicting reports out of Italy however, with Bloomberg reporting League leader Matteo Salvini had dismissed 5 Star's offer to revive coalition talks. A risk-on tone and rebounding oil prices propelled U.S. equities higher overnight. The DJIA jumped +1.26% to 24,667.78 points to erase the majority of the previous session declines, while a +3.11% gain to energy stocks led the S&P 500 +1.27% higher to 2,724.01 points. U.S. economic growth slowed marginally relative to previous estimates during Q1, with GDP printing +2.2% annualised (exp: +2.3%) from +2.3% estimated previously. U.S. consumer spending increased +1.0% during Q1 (exp: +1.2%) from a +1.1% estimate previously, the slowest pace since Q2 2013. ADP employment in the U.S. increased by 178,000 during May (exp: 190,000) to follow a downwardly revised 163,000 the month prior. Small sized firms (1-49 employees) added 38,000 payrolls, midsized (50-499) gained 84,000 and large size (500+) posted a 56,000 gain. European stocks rebounded on Wednesday on the Italian news, seeing the Stoxx Europe 600 +0.27% higher, while the German Dax jumped +0.93% as CPI spiked +2.2% YoY (exp: +1.9%) from a +1.6% read previously. In the U.K. the FTSE 100 jumped +0.75% to 7,689.57 points in whippy trade, finding support from energy stocks on the back of higher oil prices. The greenback returned previous session gains overnight as the euro ripped higher and the yen held firm. Oil futures rallied on Wednesday following reports OPEC will keep production restrictions in place for the time being. WTI surged +1.8% to end at USD $68.20 per barrel, while Brent crude spiked +2.7% to USD $77.40 per barrel.

PRECIOUS: A general positive session for gold on Wednesday, consolidating above USD $1,300, however holding a relatively tight range throughout. Chinese selling in Asia saw the session low of USD $1,296.15 printed, while producer selling, notably in AUD denominated gold kept price action heavy. Dollar declines driven by a resurgent euro supported the metal in European trade, while the U.S. GDP miss underpinned further positive price action to have bullion test toward the top of the recent range (USD $1,304.25 high) in New York. Silver held recent support toward USD $16.30 and was able to move above the USD $16.50 pivot point in New York. Platinum continues to build a base above USD $900, while palladium once again saw supportive price action around USD $975 and was able to close on the session high to book a +1% gain.

Early session price action during Asian trade on Thursday saw a sharp test of the New York high print, however offers toward USD $1,305 restricted any further top-side moves. China was once again a seller as the Shanghai exchange continued to trade around USD $4 premium, seeing bullion retrace earlier gains to print the session low of USD $1,301.20, whereby resting bids restricted any further declines. Notably USD/China came under pressure later in the pre-lunch Chinese session to further support bullion off the lows of the day. Pricing remained buoyant throughout the afternoon as currency majors clawed back ground against the dollar, however the metal is still likely to trade reactive to headlines and will need to consolidate above USD $1,300 to instill confidence in the market for a test through the 200 DMA at USD $1,308. Silver continued to remain robust above the USD $16.50 pivot level and should target a move through USD $16.80 should gold track higher. Ahead today we see U.K. house prices, France CPI, Eurozone CPI, Italian CPI, U.S. personal income / spending, U.S. initial jobless claims, Chicago PMI, Bloomberg U.S. consumer sentiment and U.S. pending home sales.

 

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 : Friday 25 May 2018

MACRO: President Trump has cancelled the scheduled June 12th meeting with North Korea in Singapore, citing Pyongyang’s “open hostility” and noting in a letter to Kim Jong-un that he felt it was “inappropriate, at this time, to have this long planned meeting”. Earlier on Thursday, North Korea once again threatened to pull out of the summit and warned that it was prepared for a nuclear showdown with Washington if necessary. Existing home sales in the U.S. declined -2.5% during April (exp: -0.9%) to follow a +1.1% gain in March, while on an annualised basis sales declined -1.4%. Initial jobless claims in the U.S. ticked 11,000 higher during the week ended May 19 to 234,000, seeing the four-week moving average 6,250 higher to 219,750. Continuing claims meanwhile gained 29,000 to 1.74 million during the week ended May 12. Equity markets in the U.S. traded heavily on Thursday, led lower by energy stocks and a risk-off theme following the cancelled U.S. – North Korea summit. The DJIA eased -0.30% to end the session at 24,811.76 points, while the S&P 500 pulled back -0.20% to 2,727.76 points as energy (-1.67%) led the declines. The greenback slipped lower on Thursday on the back of renewed geopolitical risk, notably losing ground against the safe-haven yen to see the DXY -0.2% lower.

PRECIOUS: A surprisingly muted session for gold during Asian hours today considering the overnight price action, held within a narrow range amid a recovering buck. A mixture of greenback strength and profit taking following the move above USD $1,300 had the yellow metal skewed marginally to the down-side in early session flows, running into dollar headwinds to as the DXY added around +0.2% to weigh upon the metal. Interest toward the psychological USD $1,300 restricted any further declines and we look to the key level as a pivot point for near-term price action. Top-side focus turns to the 200 DMA currently sitting at USD $1,307.70, a level that capped gains in New York on Thursday, however we should see interest re-emerge on a consolidated break above the figure as confidence in the metal builds. Silver importantly captured the USD $16.50 handle on Thursday and has held the level during Asian trade today, while platinum has consolidated above USD $900 and palladium has held a narrow range following the overnight swings. Data today includes German IFO survey results, U.K. GDP, U.S. durable goods and the University of Michigan consumer sentiment print.

 

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 21 May 2018

MACRO: Trade headlines out of the U.S. over the weekend indicate the U.S. and China have agreed to set up a framework for addressing current trade imbalances, putting their ‘trade war’ on hold for the time being. The two parties said on Saturday that they would continue discussions regarding the current USD $335 billion trade deficit the U.S. has with China, with measures likely to focus on increasing China’s appetite for energy and agricultural commodities. Equity markets in the U.S. were generally lower on Friday as investor’s awaited the weekend trade discussions between the U.S. and China. The DJIA ended the session just 1.11 points higher at 24,715.09 points, while weakness across financial (-0.91%) and technology (-0.81%) stocks saw the S&P 500 finish -0.26% lower at 2,712.97 points. Over the week both the DJIA and the S&P 500 declined -0.5%, the third weekly fall in 4 weeks for the pair. The greenback continued to strengthen on Friday to see the DXY index +0.2% higher, making notable gains against the euro as the pair sunk to a 1.1750 session low.

PRECIOUS: Bullion pared late Friday gains during early Asian trade on Monday, offered leading into the Chinese open as the euro declined below 1.1750 following a bearish close underneath its 55 week moving average last week. The yellow metal was once again subject to dollar flows, seeing uninspiring trade throughout the session as the DXY index spiked +0.25%, while interest out of China provided modest underlying support to the price action, however acted just to restrict a further extension of the early session weakness. Dollar demand was evident in the latest CFTC foreign exchange positioning data (as of Tuesday 15th May), showing specs purchased just under USD $2.5 billion of USD contracts and decreased short positioning to USD $11.3 billion. We saw modest demand for the metal around USD $1,288 during the Chinese lunch break, however the bids soon evaporated once the far East returned, while early offers out of London took the metal to a test of the recent USD $1,285 low print. We continue to see layered offers extending toward USD $1,300 and this is likely to cap any top-side movement while the dollar remains buoyant and recent price action suggests we may see an extension toward USD $1,250. Silver pricing softened amid the stronger dollar and the metal is closing in on the recent USD $16.06 - $16.15 support level, while platinum has extended recent declines today and is within sight of the December 2017 low of USD $873. Data today includes the Chicago Fed activity index.

 

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.