DAILY REPORT: Tuesday 4th June 2013

The drop in the US ISM manufacturing confidence index in May to 49.0 (51.0 expected, 50.7 prior), close to a 4 year low in the data failed to have a prolonged impact on equity
markets. Perversely we are seeing weaker data lead to less fears of the Fed tapering which in turn is boosting equity markets, not seeing them retrace. In any case the contraction in the ISM data will not likely lay prelude to a new phase of economic weakness, just a stumbling block. Markets continue to await Central bank meetings and the US May jobs data at the end of the week for further direction but ahead of that volatility whether in equities, rates, commodities or FX markets, shows little sign of dissipating. USDJPY sold off significantly yesterday following the US ISM report, with the pair tumbling through key technical levels and dipping below 99.00 for the first time since May 9. During the New York afternoon a number of wire reports helped stabilize the pair. Most significantly, Dow Jones reported that Prime Minister Abe will present plans for special economic zones on Wednesday, representing the so called structural reform “third arrow” of his economic plan. Later, Reuters reported on plans for Japanese government sponsored pension plans to begin studying increased allocation to equities and foreign assets. Market participants will monitor equity market reaction to gauge scope for a USDJPY rebound, though the pair seems likely to trade heavy into Friday’s jobs report. According to BNP, 98.62 is now key support which needs to hold to maintain scope for a rapid recovery. Back in the US, Reuters relayed some comments from Fox Business where Atlanta Fed President Lockhart said the Fed will soon be able to consider reducing the pace of its bond-buying stimulus. "...that's not to say the
June meeting, but we are approaching a period in which it can be seriously considered based upon the momentum of the economy, which is not great but nonetheless is moving forward". Dow Jones later caught up with Lockhart who reiterated that the Fed is getting "closer" to a decision on tapering bond purchases, yet he feels right now is
not the right time. He said the decision may come over the coming months and said slowing bond purchases is not policy tightening. He later found a Bloomberg TV camera where he said maybe "August, September, or later in the year." Overnight gold struggled to breach $1400 during the European session, flirting above there on a few occasions but unable to sustain any prolonged move above there. The weak ISM manufacturing data provided the much needed fuel to push through this level. The poor figure had investors questioning the likelihood of a tapered QE from the Fed and boosted the yellow metals lustre. We hit a peak of $1416 and remained fairly well bid into the NY
afternoon rounding out the day +1.5% higher to close at $1412. The SPDR gold ETF showed no outflows for a third consecutive session, which may be a sign that the mass exodus seen since the beginning of the year could be grinding to a halt. This may have some spec shorts slightly concerned in the short-med term, given that liquidations across ETP's has played such an integral roll in gold's -15.7% fall this year and has capped rallies despite the huge influx of physical demand. Plat had a solid session overnight as headlines over unrest at Lonmin in South Africa, could see supply issues rearing their head again. The white metal rallied strongly through a number of key technical levels as a result and currently resides just above the 50 dma ($1489.70). Improved auto sales in the US to 15.24M units (15.10M expected, 14.88M prior) also helped support the PGM's. The market opened today and flows remained increasingly light. Gold seems to be forming a fairly standard pattern throughout the Asia day, trading sideways until the SGE, have a brief run higher on there open and then taper off into the afternoon as early European traders come in. Volume were noticeably down today with GCQ3 trading less than 10k lots in the first 7.5 hours, which is particularly low of late considering we have been averaging 15k-18k in a similar time frame. Platinum remained well bid throughout the day albeit in a tight range, but managing to hold above the 50 dma. Silver lost a little ground after seeing strong demand from Asia overnight
but was very quiet with limited flows. In terms of data the RBA rate decision was the only real thing of interest in Asia today. The Australian central bank decided to keep the benchmark rate on hold at 2.75%, with no material change to their easing bias. They said in the statement "the inflation outlook, as currently assessed, may provide
some scope for further easing should that be required to support demand". With regards to the AUD they said "...has depreciated since the previous board meeting, although, as the board noted for some time, it remains high considering the decline in export prices that has taken place over the past year and a half". AUD had a short sharp
up and down move, however settled unchanged. Gold started a slow descent as European session started. The precious metal found a little support at 1405 during
the morning. The Eurozone PPI MoM and YoY lowered both going in a more negative territory. Gold broke 1405 before lunch time on India Central Bank announce of restricting gold imports by government nominated agencies. The India Central Bank said all letters of credit for gold import will only be on 100% cash margin basis. The
Reserve Bank of India tightens thus norms for agencies importing gold on consignment allowing consignment only to meet export needs. The metal traded on the 1400 level until New York joined the session and market became nervous as the Trade Deficit in US widened 8.5% in April to 40.3 billion. The metal has been supported during the
fixing time by some ETF related gold buying but plunged to 1390ish later. Gold tried then to reach back 1400 until Globex close. Silver drifted slowly to 22.30 while trying to break the level several times. The grey metal ended its run in a 10¢ range above 22.40.
PGM’s have been pressured today by some profit taking. Palladium has been subject to ETF related selling on the fix. Later the white metals have been supported by an illegal strike at Impala Platinum in South Africa.

 

 

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 29th May 2013

Firmer US data in the way of Case Shiller and May Consumer Confidence (76.2 vs 71.2 expected, 68.1 prior) drove the market last night. The data provided the impetus to buy dollars across the board and pushed equities higher in the US (Dow +0.69%, S&P +0.63%), after some better performances in Europe as well (FTSE +1.62%, DAX +1.16%, CAC +1.39%). Commodities also benefited and the US Treasury yields surged with 10 years up to 2.17%, the highest rate since April 2012. In addition to the positive data in the US, the state of California reported that it is looking for a USD1.1 billion surplus in 2014 and there were also reports of Moody’s upgrading the US banking sector to stable from negative. As a result of the moves last night currencies are all opening at the bottom of their ranges and still look a little heavy with offers noted above current levels. On the data front today it is light in G10 with Japanese retail sales and secondary data in Australia. The continued US growth signals, stronger USD and higher US treasury yields continue to cap gold's rallies to the upside with $1400 proving very stubborn resistance. Heavy selling into the PM gold fix combined with the strong equity markets edged the yellow metal below $1380. Comex option expiry came and went out pinned underneath the $1380 strike. A solid rebound from there took us all the way back to $1400, where again spec sellers and systems sit on the offer. Trading volume was huge for yesterday with ~410 k lots of June gold turning over, the highest seen since we
hit the record on April 15. The rolling of contracts would have exacerbated this figure however. Elsewhere the physical market seems to be loosing a little steam with talk
of lower premiums in India and Hong Kong as physical supply finally is showing signs of increasing. In the US, the mint said it is resuming sales of its small American Eagle gold bullion coins. It is also lifting allocations to it's authorised dealers on the America the Beautiful five-ounce silver coins, effective Tues. This is a further sign that a
coin-buying frenzy has started to fade after investors took advantage of bargain prices following gold's historic two -day sell-off on April 12th and 15th. It continus to limit purchases of the American Eagle silver coins, a policy in place since Jan following a brief suspension earlier this year. Silver sat on the sideline overnight only having
~$0.40 range, while the PGM's moved higher palladium remaining the outperformer of the complex up +3.4% at it's peak ($760) and rounding out the day up +2.4% ($755).
It was a muted start to the day in Asia once more, gold opening at on Comex at 1381.00 (spot equivalent) and basically flat-lining until Tokyo came in. Tocom opened up and there were some Japanese banks sniffing out offers and paying the market up a few dollars. Similar to yesterday this was mostly a dollar play as the USDJPY quickly relinquished the 30 pip gains seen prior to the Tocom and Nikkei open. The dissociation between gold and the Nikkei/USDJPY continues to play out during Asian trade and will likely remain a theme going forward with the spotlight firmly on Japan. China was fairly neutral, some light physical bids absorbed by macro/bank offers up
towards the day’s highs. Later in the day early London traders started hitting bids and the gold moved $5 lower towards the days open - consistent with a firmer Nikkei and USDJPY. In other markets the AUDUSD broke down today crossing through major support at 0.9582 (2012 low) and currently sitting at 0.9530, with London on the
offer. The next major support in this cross cuts in at 0.9388 (2011 low pivot). US treasury yields continued to run higher in Asia today posting fresh highs with the 10y touching 2.235%, as opposed to 2.172% in late US trade - next resistance looks to be 2.30%. If these continue to rise we could see additional pressure on gold over the next few sessions. Gold continued to be subject to pressure coming from US Treasury during European morning. The metal has seen fresh bids after lunch time supported by a weaker US dollar. New York open offering the metal on Comex Open and the morning lows were revisited as the PM fix went trough. Gold has been supported back by future short needing to roll-over their positions as Ecomex options expiry was today. ECB said growth outlook was subject to considerable downside risks. We should not be expecting a major reactions to the US initial jobless claims tomorrow as FED's Rosengren suggested today improvement in labor markets was not yet enough to merit halting QE3. He repeated what we already heard concerning significant accommodation that remains appropriate adding that benefits of bond buys outweighed their costs and that even if FED reduces rate of asset purchases, it would still be adding accommodation. Silver has been supported by gold again and traded in line with the yellow metal. PGM’s have been under pressure suffering by little profit taking during the American session.

 

 

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 22nd May 2013

Dovish comments from US Federal Reserve officials in reference to the potential outlook for the Fed's bond-buying program saw equities continue their meteoric rise and also supported US Treasury bond prices overnight. Federal Reserve Bank of St. Louis President James Bullard, bucked the recent trend of Fed Speakers and argued that the central bank should in fact continue with its buying campaign, but should be willing to change its size depending on current economic conditions. He was quoted as saying that in his opinion the best course of action is to "continue with its present quantitative easing program, adjusting the rate of purchases appropriately in view of incoming data on both real and economic performance and inflation." New York Federal Reserve Bank President William Dudley was a little more circumspect on whether the Fed's next move should be to enlarge or shrink QE. Dudley commented on the uncertainty that surrounds the job market and the inflation outlook. He noted "I cannot be sure which way - up or down - the next change will be" in regards to the Fed's bond buying stimulus. "We might adjust the pace of purchases up or down" depending on current market conditions. Despite the uncertainty, Dudley suggested that, in his opinion, the next move by the Fed will be to slow its bond buying stating "At some point, I expect to see sufficient evidence to make me more confident about the prospect for substantial improvement in the labour market outlook" and when that occurs "it will be appropriate to reduce the pace" of the QE. Across the Atlantic, UK inflation data was weaker than expected in April, rising a meagre 0.20% m/m against market expectations of +0.40% m/m. The weak result was on the back of a fall in transport costs. The USD has drifted marginally lower so far this week. The key focus is Bernanke's semi annual testimony before the Joint Economic Committee on the US economic outlook released later tonight. In previous testimony's helicopter Ben has stressed the slow pace of the recovery and a labour market that is still struggling. Most economists aren't expecting any ground breaking announcements and that his testimony will be similar to the last. It is likely that the Fed will remain cautious in any tapering of the current $USD85 bn per month asset purchase program for the time being, and the minutes from the FOMC's May meeting will most likely reflect this. It is likely that he will stress that the recent economic improvement is insufficient to consider such a move, but he will leave the door ajar for changes later in the year. Most currency's consolidated overnight ahead of Bernanke and the release of the minutes tonight. GBP was by far and away the biggest mover, falling sharply following the weak inflation data mentioned above, whilst the antipodean currency's continue to trade heavily against the greenback. It was another roller-coaster ride in the precious metals yesterday. The Asian session finished on its highs with
1400 within sight. It proved too big of a level for the market not to test (1399.50 was the New York high on Monday night), and the yellow metal made its way up to the psychological level. 1401.40 was the high print, but once some light stop loss orders were filled, the market came crashing back down an ugly $40 just as a number of
pundits began to believe in the 'technical reversal' witnessed on Monday. Technically the gold must hold the April lows of 1325, as a close below this critical level could see the metal slide considerably lower. The market is well and truly in 'bear territory' and rally's are being looked upon as a selling opportunity. ETF outflows continue to be gold's worst enemy, and the SPDR, which was the second largest US listed ETF at the end of 2012, has slid to the fourth largest ETF due to the floodgates being opened, with not only hedge funds liquidating but the retail sector off-loading their holdings preferring high yielding assets. GLD shrank another 0.67% on Monday and 0.82% yesterday, whilst US equities continue to reach all time highs, despite a number of Federal Reserve members alluding to the fact that QE won't be around for ever, and could very well taper off shortly. Silver ETF's also ontinue to liquidate, as i-Shares saw an outflow of 0.53% and fell to its lowest holdings since January. With the 10% fall on Asia's Monday open, market participants are steering well clear of the commodity which many are
now calling 'The Beast'! Asia proved to be a quiet session today, with flows and ranges limited. Some initial supply seen on the futures exchange pressured the gold a few dollars lower, but a lack of any follow through supply and ongoing physical buying saw the market edge back up leading up to the Chinese open. As has been the case recently the Shanghai Gold Exchange premium (+$24 over spot), provided support to the precious metals, and XAU jumped a few dollars to the day highs, but the markets enthusiasm waned over the course of the afternoon and we found ourselves back towards 1376 which is where the market remained for the remainder of the session. In other precious news, there was a report on Bloomberg noting that sales of gold from exchange traded products in 2013 have now exceeded the combined inflows over the past two years, with investors cutting holdings at a record pace. European session started awaiting for Fed chairman Ben Bernanke's speech in front of the Congressional Joint Economic Committee on policy. Market traded mainly between 1380 and 1390 the entire morning. A bit before New York open speculation on the speech sent gold through 1390. the 1400 resistance has been tested twice, but gold retracted each time before 1399 and so after Comex open too. ECB’S Reinesch said that ‘’signs of economic
pick-up were still tentative’’. At the fix time Bernanke said premature tightening risks were slowing or ending recovery. Gold flew as he repeated that policy was to stay accommodative as long as needed and the monetary policy provided significant benefits. 2.7 mio ounces traded as we hit 1415 and stop loss orders were triggered.. The Fed chairman also said he sees inflation at or below fed's 2% goal next few years. But as he stated Fed will gradually reduce the flow of asset purchases if labor market improves in a real and sustainable way. Gold then saw a violent reversal and lost the 30$ it gained as fast as it went up. Bernanke said that exit strategy was being discussed further. He said `at some point we will end' asset purchase program, not necessarily while sell assets but they could just let maturities roll off. Gold then held 1370 until the close but pressure pursued as the close was weak. Later in the day, at the FOMC Minutes, many said more progress was needed before slowing QE, the theoretically bullish gold statement did not affect the market anymore. Silver traded quietly the morning session while consolidating above 22.00. The grey metal spiked at 23.30
following gold before decreasing also. We slowly went then to affirm that 22.20 was a good support area. No big difference with PGM’s except that the swing due to Bernanke speech was much lower in palladium compared to the other precious metals. Palladium also consolidated above 740.

 

 

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 3rd June 2013

The huge Chicago PMI print on Friday (58.7 vs 50.0 expected) and strong Uni of Michigan confidence figures (84.5 vs 83.7 expected) saw a continuation of the US-Rates- Higher-USD-Stronger tapering theme, but by NY close much of the move in Treasuries had been reversed, most likely on month end re-balancing action. Still, the data continues to print in the USD's favour and the broad theme of USD strength continues to play out. Weakness in equities and in other EM currencies on Friday – and surging measures of volatility across bonds, equities and currencies – all argue against being short USD. US data continues to be the main market driver, with tonight's ISM and Wednesday's ADP employment the major distractions before the main non-farm payrolls event on Friday. For today, the better-than -expected Chinese PMI on Saturday (50.8 vs 50.0 expected) provides some hope of support for the region; note, too, that
South Korean trade numbers were a little stronger. Still, the direction out of the blocks is likely to be for a stronger USD. On the back of the stronger PMI, the CNY fix will be important to a CNY/CNH market that was looking increasingly nervous on Friday afternoon. Plenty of data in the region today, with official and/or private PMIs in China,
Korea, Taiwan and Singapore scattered across the day. Australian retail sales will be closely watched, even if the lower AUD has likely taken a rate cut off the table at the
RBA's meeting tomorrow. On Friday, all precious metals pared back gains on month end flows as well as strength in the greenback. Gold tested $1422 in the Asian session but did not see any fresh follow through buying up there. Again solid selling on the AM and PM Fix in London was evident and provided the platform for the metal to test towards $1385. Physical support emerged there as it had done a number of times last week and propped the metal up into the close. All in all the gold managed to round out the week in positive territory at +0.1%, Looking at a longer time frame, over the month
of May gold dropped ~6% following April's decline of ~7%, with the primary protagonist being the liquidation of ETF holdings by funds. Holdings in the SPDR Gold Trust, remained relatively unchanged at 1,013.15 t on Thur and Fri, after rising for the first time in three weeks on Wed. We still remain at near four-year lows however, having lost nearly 337 t in 2013 so far. Despite all these momentum sellers bailing on ETFs, people who are interested in physical gold bars and coins remain active - particularly in China and India. Central banks also continue to purchase which is keeping the metal supported. CFTC : Specs increased their bullish bets in gold futures and options, trimmed net shorts in copper, while it added bullish bets in silver to turn the market into a small net last week - net long of 63 contracts. Specs raised their net long in gold by 12,410 contracts to 48,096 . The market opened today and some light demand was seen from the get go. Globex ran a few dollars higher in fairly thin conditions and volumes remained light. China were buyers on the lower cash prices, which saw the SGE arb move out to around $17 over spot. This was up about $5 from late last week, when cash gold was trading around $1420, but still remains short of the $20-25 dollars seen earlier last week and the week before. The market topped out around $1396.50 as the buying petered out and we settled in to trade sideways in a narrow $1393-95 band throughout the afternoon. There was a fair bit of data out in Asia today kicking off with Japanese capital spending which came in a little better than expected at -3.9% (-6.0% expected, -8.7% prior), this had little effect on the markets. Australian retail sales came in a touch lower than expected at +0.2% (+0.3% expected, -0.4% previous) which weighed a little on the AUD marching it 20 pips lower. Chinese non manufacturing PMI came in at 54.3 (54.5 prior) and the Chinese HSBC manufacturing PMI came in lower at 49.2 (49.6 expected, 50.4 prior), which was 0.4 below the flash PMI. The weaker data came primarily from a drop in total new orders which declined for the first time since last September. Demand from abroad also weakened over the month with new export orders falling for the second month in a row. AUD was weaker following the announcement and the metals were also a touch softer. The dollar was a touch softer over the course of the day and equities were mixed with the Nikkei -2.6%, Shanghai composite +0.3%, HangSeng +0.5% and ASX200 -0.5% at time of writing. Tomorrow we
have the RBA rate announcement with the BoE and ECB to follow later in the week. On Friday we have NFP's to round out the week. Morning session in Europe traded in a 10$ range while testing 1400 area. Gold bounced on the psychological level and drifted slowly back to the lows. Some British data were released. The UK Manufacturing PMI rose to 51.3 in May from upwardly revised 50.2 in April, it is the highest level in 14 months and the UK Manufacturing New Orders Index jumped from 51.4 to 53.7, the highest since March 2011. After New York joined the session, it was the turn to some American data to came out with the US Manufacturing sector final PMI for May at 52.3 versus 52.1 in April. But the most important had to come. At the fixing time gold jumped boosted by pretty bad ISM report. The US ISM Manufacturing Index in May fell to 49.0 from 50.7 in April. That was the weakest ISM since June 2009. On the move from 1396 to 1407, 1.3 million ounces traded. Market seems to be bearish rather than bullish unless gold could break the 1420’s. The USD suffered post ISM despite the US Manufacturing
Employment Index that rose from 50.2 in April to 50.1 in May. The EUR/USD hit 1.31 while USD/JPY hit stops and plunged to 98.84. Silver consolidated above 22.30 today supported by different actors but one should keep an eye on the 22.00 key level. PGM’s were supported by several factors today. At Lonmin in South Africa a Union Member had been shot dead. Later platinum took out the 50dma at $1495 after the ISM release and palladium reached 762 ahead of the US vehicle 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 purchaseor 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 28th May 2013

Very little to report overnight , as was expected given the Bank Holiday in the UK, the US memorial day holiday and the absence of any major data releases. There was limited
price action and flows were equally fairly muted. In Japan, hopes of a quiet start to the week were dashed as equities extended their downward slide and the JPY strengthened. Heightened volatility is frustrating policy maker’s efforts to contain the rise in Japanese bond yields at present. Although BoJ governor Kuroda noted that the country could cope with rising interest rates, higher yields could dampen growth at a
time when the economy is finally showing signs of life. Higher JGB yields have led to a narrowing in the US treasury yield advantage over JGB's, which in turn has helped the JPY appreciate against the greenback. Unless the BoJ succeeds in curtailing the rising yields, USDJPY is in danger of breaking below 100. European markets performed
somewhat better with the DAX up +0.94% CAC +0.97% and the EURUSD stable. Also, Chinese Premier Li Keqiang expressed his willingness to create a special bilateral
partnership with Berlin, bypassing the EU, and weakening the EU's trade commissioners’ war regarding unfair competition from Chinese solar and telecommunication products. http://www.ft.com/intl/cms/s/0/3feec642-c6dc- 11e2-8a36-00144feab7de.html#axzz2UYQsxU5U. It was an extremely uneventful night in the metals with a $5 range seen in gold, yet still managing to hold close to the $1400-10 resistance. Bullion is somewhat holding out here as few factors are balancing each other out at the moment - on one side you have continued ETF outflows (holdings in
GLD continue to fall last Fri to their lowest since mid- Feb09) and specs cutting bullish bets on COMEX, while the other hand the metal is finding some support from ongoing demand for coins and bars amongst retail investors and ongoing purchases by central banks, such as Russia, Turkey, Azerbaijan and Kazakhstan. Expiry of June COMEX options later today will continue to cement the market around $1400 for at least today. Decent open interest at the $1400 strike the culprit. There still seems to be solid spec and system selling around $1400 for now, but we do risk a topside pop due to the skewed downside positioning. I suspect we will continue to see spec selling up towards $1410-15 area, but above that we may find some stops and I would be wary of a sharp pop to $1430-40. Silver maintains its range bound action for now running into resistance above $23 and support around $22, with Chinese names on both sides. Palladium has been the star performer in the complex, holding in well above $725.
It was another uneventful open this morning, gold futures trading only a few hundred lots of June gold in the first hour. Some precious liquidation came in right on the Tocom open in line with a much higher Nikkei and stronger USD, the USDJPY running from 101.05 to 101.80 in speedy fashion and looking well bid throughout the day.
Gold pushed through $1390 quickly but did manage to find some Chinese bids lingering under that figure. The SGE opened up and there was some decent buying from the start, propelling spot sharply back through $1390. The rest of the afternoon the metals remained under pressure in line with the stronger dollar, with moderate volumes
moving through Comex. No data out today but BoJ board member Miyao hit the wires late in the afternoon with the following: *MIYAO: RELATIVELY MORE DOWNSIDE RISKS FOR JAPAN ECONOMY *MIYAO: PREMATURE TO DISCUSS EXIT STRATEGY *MIYAO: BOJ WILL MAKE POLICY ADJUSTMENTS AS NEEDED *MIYAO: JAPAN YIELDS WILL FACE DOWNWARD AND UPWARD PRESSURE *MIYAO: BOJ EASING TO PUT DOWNWARD PRESSURE ON YIELDS *MIYAO: BETTER ECONOMIC OUTLOOK COULD DRIVE YIELDS UP. Nothing new but it did force the USDJPY briefly above 102.00 and gold came off to it's low of the day. Nikkei is currently trading at +1.5%, while the Shanghai Composite and Hangseng are marginally higher +0.15%. Ahead today we have the US Richmond fed manufacturing numbers, consumer confidence and Dallas Fed figures. Gold started the European session trading quietly between 1385 and 1392. Offers appeared in the late morning which sent the yellow metal down to 1380. Around the same time headlines out of China made the round. China would plan to collect 20% luxury tax on luxury vehicles but the news was not verified and hence had little impact
on the European currency. As New York opened bids started to build but the US Consumer Confidence index that rose from 69 to 76.2 set some additional pressure on the metal. As the PM fix went through gold hit a new day low. The metal has been supported again thanks to Comex expiries and many agreed that the US figures should
have added more pressure to the metal. Moody’s upgrade US banking system outlook to stable from negative. After the afternoon fix however gold saw a quick rally to 1400 but the spot price drove lower to trade near 1380 until the end of the day. Silver followed gold the entire day. PGM’s unlike gold and silver have been supported by the US Consumer Confidence index. The good number implied stronger industrial demand as auto catalyst. The platinum lowered by 10$ from 1470 later while palladium remained at the highs as the supply of the white metal remains poor.

 

 

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 purchaseor 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 21st May 2013

With no major economic data releases overnight, the currency markets were reasonably subdued, but the precious metals were anything but subdued! The US Dollar gradually
made its way lower overnight, whilst equities reached an intra-day historical high but finished the session flat. The AUD is getting close to breaking out of a downward channel started at the beginning of May and a move above the break out point to the downside at 0.9830 could see the antipodean currency push back up towards parity once again. Grabbing most of the headlines overnight was a speech by US Federal
Reserve Committee member Charles Evans who suggested that the Fed should scale back the current pace of its asset purchase program, and that the central bank has the
appropriate level of monetary accommodation in place to let the economy reach "escape velocity" next year. He was quoted as saying "The odds are in favour, right now as I see it, of dialling this back a little bit or keeping it at its current pace...I'm in favour of dialling it back." He also said "We continue to face powerful headwinds in the fiscal situation and the global economy" however the economy "seems to be performing pretty well right now." Tomorrow night, Bernanke will deliver his semi annual testimony and the Minutes from the FOMC's latest meeting will be released. It is expected that the Fed will remain cautious in any tapering of the current $US85 billion per month asset purchase program given the current headwinds from fiscal drag on the US economy. The focal point for the metals over the last 24 hours has to be silver... what a move! After plunging 9% in early trade in Asia to $20.40 the white metal rebounded a whopping 13% to touch $23.05 in NYK. After stabilising above $21.00 in Asia news hit the wires in early NYK as follows:
***Moody’s Investors Service said U.S. policy makers must address debt woes to avoid a credit-rating downgrade this year*** which triggered some safehaven demand and got the momentum rolling higher. Asian physical support coupled with chunky macro and option related buying were the main driver in both gold and silver throughout the rest of the session. As the grey metal traversed $22.00, it began to take gold higher which triggered stops and squeezed out the fresh intra-day shorts in both. A decent amount of longer terms stops were also triggered alongside short gamma stops. The gold touched a high of $1399.50 reversing an impressive 2.5% since the Asian lows, an impressive rebound in it's own right. After such a gloomy Asian session the decent rebound may just be proof a near term bottom has been reached. COTR figures showed short positioning sits at all time highs so gold may still be susceptible to this sort of violent move up. GLD ETF outflows continue with GLD losing 0.67% of its holdings overnight - total holdings in the worlds largest gold ETF now stand at 33.163 million oz. The market opened this morning to some light selling pressure, which was to be expected considering we were ~$40 higher than where we finished up yesterday. This selling was compounded once the Japanese and Chinese entered the fray pushing spot gold lower through $1390. On the physical side demand still remained strong however, with SGE premiums around $21 / oz in early trade only ~$3 down from yesterday which is a good result. Decent demand was seen around $1385 and $22.50 spot, touching these a few times but holding well. It felt like the market is still short and the mornings $10 pullback was a good position to cover. The USD was under pressure
over the afternoon (with the exception of the USDJPY), helping the metals rebound quite strongly. Gold moved through $1400 late in the day and silver revisited it's opening high. Indian demand was still evident at these levels during the afternoon, which was a surprise and partly responsible for the higher prices. It is Comex option expiry today with $1450 and $1250 strikes having the largest open interest, which may suggest a gravitation towards the closer to the two $1450. With the market still positioned on the short side, if we see a clear break of $1400-05 we may see another round of short covering. As soon as the European session started, gold tested 1400 crossing it few seconds. The metal retracted then and slowly reached 1385. Bad British numbers set pressure on the Cable and on gold, but the metal found some support toward the 80’s. ETF selling kept on going with talk that "Profits from investments in ETFs that back their shares with physical holdings of precious metals faced taxes as high as 28 percent for investments held at least a year". The precious metal lowered again as New York walked in and remained under pressure until the Fix. Macro funds were also selling gold pre-fix, through market and via short term puts. Gold found support then on Bullard QE comments. He urged FED to continue with the current QE program. Tomorrow will see the FOMC minutes’ , we suspect market trade nervously before the meeting, especially with such high volatility. Silver remained stuck below 23 and slowly decreased to find some support around 22.15. Platinum erased yesterday's jump to 1495 to bounce at 1450 while palladium remained trading in a 20$ range. 750 – 755 area is the next target for palladium.

 

 

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 31st May 2013

Sentiment improved modestly overnight as the US and European equities shrugged off another tumultuous session for the Nikkei - which closed just above -5.0%. Given the
recent concern regarding early Fed tapering, higher than expected US jobless claims (354k vs 340k expected, 340k prior) and a slight downward revision of Q1 GDP (+2.4% vs
+2.5% expected) actually helped to stabilise the market mood. Looking forward, sentiment may stabilise even further as reports circulated that rules restricting Japanese pension funds investing in local equities could be relaxed. This would definitely help to sure up a base following the last few weeks correction in the index and yesterdays test of the 50 dma. Inflation data in Europe, which is expected to come in at around +1.4% according to Bloomberg, will still leave room for further easing into next week’s ECB meeting. Treasuries continued to stabilize o/n in the face of the stronger equities, some continued turmoil in currency markets ($ taking a bit of a drubbing again), and ongoing nervousness about Japanese market. Perhaps most importantly, Japanese Gov Bonds were fairly stable overnight and the MBS market was also fairly stable during the NY session, which, along with a very good 7yr auction, helped Treasuries trade better on the day. The move was not particularly strong, but given the taper-driven selloffs over the course of the last week, simply being unchanged feels like a positive. Stops were triggered in late Asia yesterday as a short squeeze through $1402 took shape, setting up the tone for the rest of the session. The gold managed to hit an intraday high of $1417.50 leading into the PM fix / NYK open and we the market managed to stabilise around there for the rest of session as week shorts sat on the bid looking to liquidate into the month end. The weaker dollar and retreating US Treasury yields also helped to keep the yellow metal supported throughout the session. The market remains as a whole remains short and I suspect there will be some pain out there on a clear break of $1420-30. Although our order book remains light through this area, banks have been suggesting there are some pretty sizeable stops accruing through there. A break of $1430 could see a sharp rise towards the next resistance of $1450. ETF's on Wednesday had their first inflows (albeit very small) in nearly 3 weeks, but yesterday was again outweighed by selling with 1.5 tonnes being liquidated across all products. What does seem to be a theme here is that the scope of the flows from ETP's is diminishing, which may suggest the huge bouts of liquidation (200,000+ oz) seen throughout April-early May could be at an end. Silver remains range bound but is currently sitting towards the top of that range, following gold more so than moving of
its own accord. Palladium remains well bid still hovering around $750 and platinum edged up around $20 yesterday to $1480. Buying was seen from the Globex opening this morning as some Asian names moved to square up some spec positioning before month end. Nikkei opened higher today, but it did not really affect the metals which was a little surprising considering the heavy dissociation between the index and gold this week. Instead gold climbed through the overnight high gathering steam into the SGE open. We breached $1420 and a narrow band of stops were triggered to hit a peak of $1421.70 before some spec selling capped any further advance. We tapered off into the
afternoon hovering just underneath $1420 on moderate two way volumes. The Nikkei had a relatively sedate session when compared with previous days this week, scooting around within a 200 point range. Silver and the PGM's was a little firmer and PGM's softened moderately over the day. Tonight we have Eurozone CPI and employment figures and in the US Uni of Michigan confidence figures and Chicago PMI. More importantly next week we have the BoE and ECB rate decisions as well as the Non Farm Payrolls out of the US. London session opened at the highs as gold was still trading near 1420. Slowly the metal started to go away from the key level. The Italian jobless rate that roses to 12% in April combined with ECB's Visco comments pressured
the euro currency as well as gold. Indeed he said that the ECB was ready to intervene again on rates considering all measures to maintain credit conditions consistent with monetary policy stance. Gold drove slowly to 1405 with more selling near 1410 ahead of New York open. US Consumer Spending Fell 0.2% in April and unchanged. Incomes supported the metal but were not enough to counter the effect of the coming positive data. The US May MNI Chicago Report Business Index came at 58.7 versus 49.0 combined to a much better Chicago PMI at 58.7 while the estimation was at 50, which set heavy pressure on the precious metal and hence an inevitable break of
1400. Gold bounced on the last 10day trend at 1390 but pressure did not diminish and we printed a low at 1385 before Ecomex close. Silver fell from 22.90 down to 22.20. The area has been tested the whole afternoon and seems to be a good support
as we saw bid appearing below that level last month. PGM’s have been initially driven down by the yellow metal but palladium found some support in the 745 area and
recovered to its initial level. Investec's Wrathall said South African labor issues were ‘extremely serious' as he sees `major shutdowns' of platinum mines.

 

 

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 27th May 2013

The Yen remained the benchmark to beat on Friday after Bank of Japan Governor Haruhiko Kuroda averred the vitality of maintaining stable Japanese Government Bond
markets, where a recent spurt in volatility sent the 10-year benchmark yields soaring to near 1-year highs. When asked what rising bond yields would have in store for Japan on
Sunday at an address to academics, Kuroda mentioned that Japan's financial institutions have sufficient buffers against losses they may incur from rises in bond yields, as long as the market moves are driven by prospects of an economic
recovery. He also mentioned the central bank will be vigilant to any signs of overheating of asset prices or excessive risk-taking by financial institutions, adding that there were no signs of that at present. "Japan's financial system as a whole seems to possess sufficient resilience against such shocks as a rise in interest rates and deterioration in economic conditions," he said. Estimates by the BOJ in April showed a rise in interest rates by around 1- 3 percentage points would not cause major concerns to Japan's financial system, as long as the rise is accompanied by improvements in the economy. That is because the economic recovery would lead to increased lending and help
improve banks' earnings, he said. But Japanese banks will take a hit if the rise in interest rates is not accompanied by improvements in the economy and is driven by heightened concern over Japan's fiscal state, Kuroda also called on the government to continue efforts to curb the country's massive debt. Last Friday the greenback and euro accrued favorably moves higher following corresponding better than expected reports on durable goods orders (+3.3% vs +1.5% expected) and German IFO business climate survey (105.7 vs 104.4 expected). The EUR climbed towards 1.3000 but ran into decent offering in the 1.2980-1.3000 range and closed around 1.2940. AUD remains heavy testing toward support at 0.9580 (2012 low pivot), but we are well in oversold territory now and I suspect a short term correction may be just around the corner. Gold exhibited limited movement last Friday ahead of today’s holidays in London and NYK. In the short term $1400 is proving a significant psychological barrier, with macro specs and systems happy to offer into bounces towards this area. This will likely remain the case if economic indicators out of the US and Europe continue to improve over the next quarter. Physical demand remains the thorn in spec sellers sides, with ongoing demand in
China and India leading the charge and buoying dips. Hugely inflated premiums across all gold products have not managed to abate this demand, with American eagles for example still trading close to 2x what they were in March this year, although they are down slightly from what they were in April. ETF outflows are still pronounced with
the world’s largest gold fund - SPDR - down 77k oz on Friday. For the week May 20th - May 24th SPDR liquidated a total of 715k oz (22.2 tonnes) of gold with total holdings now sitting beneath 32.7 million oz (-20.8% in the last year). Gold opened somberly in Asia trading minute volumes on Globex and edging a touch lower in early trade. With both London and NYK off today and little data of importance it seemed a number of traders were happy sitting back and taking a breather after a volatile week last week. Tocom were light sellers initially but it only pushed spot down a dollar or so, with some physical interest at $1385 supporting the metal. China took advantage of the dip on the open and had some moderate buying interest, regardless it was enough to push the market $8 higher to hit a peak of $1393.30, before settling around $1391-93. Comex option expiry tomorrow and good sized open interest at $1400 will likely see the market sticky around here for at least the next few sessions. Some BBG headlines flashed up during the am including: "DJ TURKEY'S GOLD RESERVES RISE 586,000 OZ IN APRIL - IMF", "DJ
RUSSIA BUYS 269,000 OZ OF GOLD IN APRIL - IMF", "DJ KAZAKHSTAN BUYS 85,000 OZ OF GOLD IN APRIL - IMF", "DJ AZERBAIJAN BUYS 32,000 OZ OF GOLD IN APRIL - IMF", which goes to show that central banks are still looking to pick up gold on dips. In FX land, attention was squarely focused on the JPY today, with USDJPY opening higher following Kuroda's comments over the weekend. The pair moved as high as
101.84 (50 pips above Friday's close), before tumbling back towards 101.00 which it oscillated either side of throughout most of the day. Today saw an almost lethargic session with London out for Bank holiday and New York for Memorial Day. The metal traded quietly in between 1392 and 1396 the entire day with few headlines out of Italy. Grillo said that Italy was to face a Public-finance emergency by November and was to push for a vote on the country's Euro membership within a year. the EFP moving back towards zero in the past few days on the June contracts suggest there is a bit of a squeeze with shorts rolling over their positions. Support on the yellow metal should continue tomorrow until Comex expiry. Pakistan proposed a cut in tax on gold imports of 25 Rupees tax per 10 grams that corresponds to approximately 79 cents per USD ounce (0.057% tax at current rates). Tomorrow we will have the Consumer Confidence and MBA Mortgage Applications. PGM’s have been more active. After printing a high the morning at 1464.00 Platinum fell below the Asian level. Palladium remained unchanged almost the entire day. It’s during the end of afternoon that the metal found little support and gained 10$.

 

 

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: Monday 20th May 2013

The US Dollar continued to appreciate on Friday night on the back of stronger than expected economic data. US Treasuries were sold off whilst equities continued their
ascent. It appears consumers' view of the US economy has turned a corner and most now have an optimistic outlook. The Thomson Reuters/University of Michigan early-May
consumer sentiment index rose to 83.70 (consensus 77.90) from 76.40 in April. This is the highest level since 2007. The current conditions index also rose impressively to 97.5
from 89.9 - this was also the highest reading since 2007! Over in Europe, there were a number of comments made from European Central Bank officials that suggest the risk to policy rates in the euro zone remains firmly on the downside. Yves Mersch noted that "all options are available" and that a negative ECB deposit rate is a real "possibility". His colleague Joerg Asmussen said that while the persistent historic lows in interest rates could lead to a misallocation of resources, it is essential that monetary policy will stay accommodative as long as it is necessary. The USD strength looks set to continue this week with a number of major currency pairs all closing much softer against the greenback on Friday. A number of market participants believe the Federal Reserve will soon signal a tapering of its asset purchases - the big question is when.... Federal Reserve chairman Bernanke's testimony before the the US Joint Economic Committee on the economic outlook and the April FOMC meeting minutes will both be released on Thursday, and are both being viewed as critical to the USD's near term direction. It is expected that Bernanke will dampen speculation the Fed will soon contemplate tapering
Quantitative Easing in the very near term, and it most likely won't occur until much later in the year. The currencies opened up to a wave of profit taking first thing this morning. The USD/JPY tumbled more than 100 pips in illiquid early morning trade after Japan's Akira Amarai said that the yen's excessive strength has largely been corrected, and any further weakness could be actually harmful to the economy. He was quoted as saying "if the yen extends losses a lot, people's lives will negatively affected. It's our job to minimise that." As a result the currency pair fell sharply to trade as low as 102.00, before bouncing just as impressively back up towards 103.00. Meanwhile, the EUR/USD has fallen to six week lows. Technically the move lower looks a little overdone and we believe a recovery is overdue. Gold opened a little higher initially before stalling above the $1365. The main reason for the stall was silver. In extremely thin conditions the grey metal was smashed lower from the start breaking the $22.00-22.15 support zone a triggering a wave of stops. With nothing but air below this level the metal plummeted to one of the largest
momentary losses on record, falling ~10% in the space of a few minutes. The spot low was around $20.40 with the low in Jul 13 Comex at $20.25. No doubt there would be pain out there following this! The rest of the complex followed suit with liquidation seen in gold and platinum from both Japanese and Chinese names. Palladium ever the stalwart remained fairly flat. The break of $22.00 in the silver presents significant technical weakness with a test on $20.00 likely in the coming days. Stochastics are not in hugely oversold territory and positioning still remains a little on the long side. I suspect this will be volatile for the first half of this week. Gold was also aggressively sold today, probing towards $1340 on two occasions but bouncing back fairly sharply with physical buying towards that level noticeable. The yellow metal now looms only $20 from the April 2013 lows at $1321.90 and one would suspect if we continue to see dollar strengthen, ETF outflows continue and general sentiment recede we will be testing this level sooner rather than later. No data of note out today so expect the market to be
driven by dollar moves. Gold kept trading at the lows during the European session. It’s a bit before lunch time that interest started to urge. The metal rose slowly to hit 1370 where stopped were hidden. The stops placed by early sellers on the Asian market triggered sending gold 30$ higher in seconds. About 25,000 contracts traded and we nearly touched 1400. Gold retracted for a moment and took a break around 1385 before retesting the 1400 level after Comex close. Silver which has been massively sold the early morning in Asia while forcing the CME Group to halt trading four times overnight because of `stop-logic events` recovered slowly up to 22.00. The upside break of April’s low was a catalyst and sent silver 1$ higher. 23.10 seems to be the next resistance.
Stops were placed in platinum above 1460. Once the level broken the metal traded 10$ higher until gold pushed the white metal another 20$ higher. Palladium on the other hand remained firm and climbed to reach 755.

 

 

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 30th May 2013

Market sentiment deteriorated overnight as equity markets in the US and Europe declined while commodity prices also dropped. US yields slipped which in turn undermined the USD. Growth downgrades from by the IMF and OECD did not help especially given the weaker growth trajectory for some emerging market countries. Meanwhile 2 central banks did not follow the now usual pattern of easing with the Bank
of Canada leaving policy on hold and Brazil's central bank actually hiking rates by 50 basis points.The Euro snapped back o/n (peaking at 1.2978) despite the dismal
developments coming out of the monetary union, but the EURUSD may continue range-bound prices ahead of the European Central Bank (ECB) interest rate decision
approaching next week as market participants weigh the outlook for ramped up monetary policy. Unemployment in Germany increased 21K in May amid forecasts for a 5K print, while the ECB said private sector lending contracted for the 12th consecutive month in April as the region remains mired in recession. As the Organisation for
Economic Cooperation and Development (OECD) now sees the euro-area contracting 0.6% in 2013, the group encouraged the central bank to 'supplement its recent cut in the refinancing rate by reducing the deposit rate to below zero' and said that 'more can be done through further nonconventional measures' as the governments operating under
the monetary union struggle to get their house in order. A strong 5y US Treasury auction saw the market claw back some lost ground overnight. 10yr yields hit a local high of
2.235% in Asia yesterday, before weaker equities/softer risk assets gave the Treasury market support into the NY open. The NY session was a very choppy one, with MBS
improving from weak overnight levels early, only to falter in the morning and widen back out before rallying again into the afternoon. In the background were weaker equities, weaker commodities and what felt like a positional rinse in long $ trades. In the metals gold was spurred higher in line with the weaker broadly weaker USD. Gold remains in a somewhat consolidative phase for the time being, with the range tightening daily, which usually indicates an impending violent break one way or another. For now the same factors for the metal remain in play - unwinding of ETF holdings and specs building there short bets on moves towards $1400 caps the topside, whilst continued physical
support from Asia persists on any prolonged dip. This physical demand in Asia is clearly emphasised by the huge premium for physical bars. In Singapore kilobar premiums are sitting at around $4-6 over loco London, while premiums in HK are $4-5 and the arb in Shanghai still sits just above $20 over spot. Volume was again fairly solid
yesterday but more a function of rolling over June to August futures contracts than any significant flows. Vols are lower across the curve as we cling to the tight range around $1390, 1m is currently 20.5 and 1y now is 18.0 and the skew continues to be heavily bid for puts. Elsewhere the World Gold Council said yesterday it predicts that 2Q demand for gold in Asia will be its highest ever, with consumers in the region taking a huge amount of the supply made available through liquidating ETF's. Silver continues to trade quietly sideways around $22.20-22.60 and the PGM's and most notably palladium remain fairly robust. The market followed the same formula it has in Asia for the majority of the week. Quiet and static opening on Globex, followed by directional play based on movements in the USDJPY at the Japanese open, demand from China on the SGE open forcing a sharp $3-5 move higher in spot, but we did move higher as London came in which was different to what was seen the rest of the week - pushing through $1400. Volumes were moderate with 13k lots of GCQ3 trading on the day it was Chinese on the bid for most of the session and offers around $1396 capping it for most of the day. As London came in a decent wave of short covering came in as the Nikkei gave way to plunge below -5.0% on the day (currently testing 50 dma) and USDJPY falling through 101.00. This squeezed gold above $1400 and propelled the market sharply higher to a peak of $1406.50 with some minor stops hit. Offers again appeared above $1405, but I suspect we may continue to squeeze higher based on current market positioning. In data today Australian building approvals were robust coming in at +9.1% (+4.0% expected, -5.5% previous) which helped the AUD tick back towards 0.9700. Ahead today we have Eurozone confidence figures, as well as US GDP, Jobless claims and pending home sales. Gold tested 1400 and went through the level as London came in. The European morning session traded between 1405 and 1410. During lunch time the stronger dollar pressured slightly the metal. Economy in US grew 2.4% in
1st QTR, Revised from 2.5% gain. However, US Initial Jobless Claims rose 10'000 TO 354,000 MAY 25 WEEK (CONSENSUS was 340,000) rising the US JOBLESS CLAIMS 4-WK AVG ROSE TO 347,250 MAY 25 WEEK FROM 340,500 PRIOR WEEK. The news sent the EUR currency to hit stops above 1.30 as well as above the 50% Fibonacci retracement of May high to low at 1.3020. The European currency traded the rest of the day above its 200dma. The weaker USD supported gold as the metal was trading back toward 1400. Next target is now 1420. An eventual break would take us at the next resistance in the 1440 - 1450 area. We had other figures today too, the GDP report showed a better composition of growth, with faster final sales (1.8% vs 1.5%) and inventories adding 0.6 rather than 1.0 pct pts. Also, French Job seekers hit a new record in April, rising 1.2 pct m/m to 3.264 mln. Silver tested 22.80 in the morning to then break the level as New York joined the game. The grey metal bounced at 23.10 to come back below 22.80. Decent selling appeared above that last level during the month. PGM’s continues to see firm bids. Platinum started to trade at 1460 to end above 1480 where it consolidated the night. Palladium bounced at the month high but remained supported by the lower mine production.

 

 

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 24th May 2013

Overnight, equities continued to trade poorly, and look as though they have reached a short term top considering the aggressive moves to the downside we have seen of late. As noted yesterday, the Nikkei had one of its heaviest falls on record, closing the day down a whopping 7%, which a number of pundits are calling an overdue correction seeing the market has appreciated 50% so far this year alone! Other major equity indices around the globe also finished in the red with the FTSE down 2.1%, Dax -2.10% and the Euro Stoxx -2.05%. The weaker than expected Chinese PMI figure seemed to be the straw that broke the camel’s back yesterday as growth concerns for the world’s second largest economy persist. Markets also continue to digest comments from US Federal Reserve Chairman Ben Bernanke on Wednesday night which suggested that the Fed's bong buying program could be coming to an end sooner rather than later, which has a number of investors concerned of the reliance of QE for the recent equity market rally, and what the future holds for the markets without the Federal Reserve's stimulus. There was more Fed chatter, this time St Louis Federal Reserve Bank President, James Bullard, spoke on monetary policy. He indicated that he wants to see
inflation close to the Fed's 2% target and inflation expectations higher before tapering of the their asset purchase program begins. As for data releases overnight, the US jobless claims number was better than expected. The figure fell from 363k to 340k, whilst the four week average was left unchanged at 340k, indicating that the labour market is continuing to consolidate with further improvement on the horizon. US new home
sales also rose by more than what was expected to an annualized pace of 454k in April. Over in Europe, the euro zone PMI stabilized this month (+47.8 vs 47.0 cons) which is a trend expected to continue in the near term after the consolidation seen in March and April. Despite the better than expected figures, the reading is still under the key 50 level, indicating the beleaguered region will experience no growth in 2013. Elsewhere, UK GDP rose 0.30% q/q in Q1 with household consumption and investment contributing to growth. Gold saw a good recovery yesterday to run up to $1398.50 after initially testing down to $1357 in early Asia. The market after generally unwinding in line with the crumbling Nikkei saw physical players step in at the lower levels. The better Jobless claims numbers (340k vs 345k expected) took some shine off the rally , with gold pulling back to $1385 but closed out the day around $1391. This was a warning shot to the shorts out there in the market as the hedge funds continue to add to their short position and ETF products continue to liquidate. In terms of positioning it seems a medium term short squeeze higher may become reality as the dips continue to run into stubborn physical buying. However, with Comex option expiry next Tuesday, and decent open interest at $1400 and $1450, I would not be surprised if we maintain a broad $1350-1400 until then. From a more technical perspective the downtrend in gold remains firmly in place and the challenge is that a stronger catalyst is needed to shift downward momentum. If we end up seeing a deeper correction in equities than what we have seen in the last few days for example, we may see investors looking for safer stores of wealth. The Fed continues to stay the course in terms of QE but has notably tempered its tone. Their actions in this sense will remain one of the metals biggest influences over the coming year or more. It was a fairly slow start to the day in Asia with some light liquidation, most likely intraday profit taking marching us a few dollars lower before the Asian futures markets opened. Tocom were fairly quiet initially eventually turning to small buying and pushing spot just above the opening levels. China took advantage of the elevated prices and liquidated on the SGE open but it was short and sharp revisiting the lows but then gradually edging up to the highs over the proceeding few hours. The Nikkei was looking fairly strong throughout the morning sitting at just under +3.00% for the day following yesterdays routing. It was almost Deja vu when the Index began to
collapse at the exact same point in the day as yesterday. The +3.0% gain quickly turned into a -5.0% loss in much the same fashion and dragged the USDJPY 120 pips lower to 101.09. The metals however remained largely unaffected, gold bobbing around $1395. The Nikkei did recover very well later in the afternoon, pushing back into positive territory and gold was sold as a result. Europe started on the offer as gold was testing the 1400 resistance level again. the metal remained heavy and continued to move lower until lunch time. Pre New York open bids pushed the market back up but the lack off interest left the yellow metal trading sideways of 1388 the rest of the day. Some light offers sent the metal back to the lows with some positive data. Ex transportation items, orders were stronger than expected, rising by 1.3% (consensus was 0.5%) after a decline of -1.7%. Orders for nondefense capital goods ex aircraft were also above expectations, rising by 1.2% (consensus was 0.5%) after a gain of 0.9% in March. Durable goods orders rebounded too by 3.3% in April (consensus was 1.5%) after a revised 5.9% decline in Mar (at -6.9%). Silver traded in a 30¢ while proving 22.35 to be a good support area.
PGM’s have been under pressure. Platinum traded sideways 1456 while palladium was most least performing pressure metal down by more than 2%.

 

 

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 17th May 2013

There were more headlines from Federal Reserve officials overnight in regards to QE tapering. This time it was San Francisco Fed President John Williams, who stated he is
open to cutting the central bank's bond buying program at some point over the next few months, provided the economy remains firm and continues to grow. Williams said "It's clear that the labour market has improved since September...It will take further gains to convince me that the 'substantial improvement' test for ending our asset purchases has been met," but if the economy continues to strengthen "we could reduce somewhat the pace of our securities purchases, perhaps as early as this summer," The US Dollar was able to erase some earlier losses that were seen against the EUR and JPY which came after the weaker than expected reports on US unemployment claims, housing and inflation. The softer than expected data weighed on equity markets and supported US Treasuries. The jobless claims in the US rose to 360,000 in the week ending 11 May from 328,000 the previous week. The Philadelphia Fed business outlook survey fell to -5.2 in May versus market expectations of a moderate rise. New orders fell to -7.9 from -1.0 and employment declined to - 8.7 from +6.8. The data confirms other manufacturing
indicators released recently that the sector is slowing compared to the first quarter 2013. Finally the US housing market data were mixed in April. Housing starts fell by 16.5% m/m to 853,000 (exp 970,000). The bullish dollar trend has gained traction this week, with a number of currency's such as the AUD, EUR, JPY, CHF all pushing considerably lower against the greenback, and it may take an accumulation of weak data releases to generate a significant USD reversal. Today is rather limited on the data front with only the Michigan consumer confidence, so Bernanke's speech this weekend will be watched closely and may prove decisive for the next USD leg. Across the Atlantic the trade surplus for the euro zone hit its highest level in March since the Euro bloc was formed. Exports of goods exceeded imports by EUR22.9 bln. The previous record high was EUR13.8 bln which was July 2012. The precious complex took another hit yesterday, before recovering some of the losses late in the New York session. London was aggressive offers across the board, and gold dropped an ugly $20 trading as low as 1370.70 before finding its feet. Although physical demand has supported the yellow metal since the rout witnessed in gold last month, it has been insufficient to hold up the market with the unrelenting ETF selling. GLD ETF outflow continued overnight with another -0.55% redeemed after a brief pause earlier in the week. According to 13F
filings, pension funds were liquidating the ETF's which is a major concern. The major support on the downside is the low reached in May, 1325, and it is critical for the market to hold this level if it has any chance of pushing higher in the second half of the year. Another concerning report overnight was the World Gold Council stating that world gold demand for Q1 was 963 tons, which is 13% lower y/y. Adding further pressure to the gold is of course the strengthening US Dollar, which can be best illustrated by the recent fall of the commodity currency AUD. Since the beginning of May, it has fallen from 1.04 to 0.9760 which is where we are trading today. Investment bank Goldman Sachs lowered their forecast for the antipodean currency to 0.97, 0.96 and 0.90 on a 3,6 and 12 month view. There are a number of reasons behind the downgrade such as the Fed tapering QE, poor domestic data flow, lower cash rate which in turn negates the appeal of 'yield opportunities' from offshore to name a few. With the absence of Hong Kong, liquidity in Asia was limited and some of the moves seen over the course of the day were exaggerated. E-comex opened around 1385 to little fanfare, but slowly started to push higher with a firm bid seen on the futures exchange. Tocom had little interest, but the lead up to the Chinese open was a lot more eventful as the market expected, as has been the case for the last couple of days, good demand on the Shanghai Gold Exchange. Spot gold as a result jumped higher, touching 1392.75 bid just prior to the fix, but the buying didn't eventuate, which left longs only one option, and that was to bail out. With the lack of liquidity as mentioned above, the market couldn't handle the tidal wave of selling, and swiftly moved lower, hitting stop after stop. The low trade was 1377.75. Pressure remained on the gold throughout the afternoon as the AUD continued to slide,
whilst silver is nearing the critical 22.00 support level. During the European session gold was stuck below the 61.80% Fibonacci retracement at 1385 despite a small
attempt to break it at the opening. The metal traded a little higher than yesterday’s low before some supported urged at lunch time. New York opened offering the metal and 1365.25 has been touched. Nearly 670k ounces traded on the fall before the metal bounced to trade back toward 1380. Pre fix sellers combined to a strong USD drove the market lower again and as the University of Michigan US consumer sentiment preliminary may index came much better at 83.7 (consensus 78.0) versus final April at 76.4 the PM fix saw another layer of selling. Gold printed later a low at 1360 and bounced to the 70’s. The metal kept trading in that range but 2 hours before Ecomex
gold broke 1360 with thin liquidity. Silver kept lowering the entire day and is now trading near the year low printed in April. PGM’s have been under pressure too. Platinum was trading above 1470 until Comex open, there pressure intensified and stops triggered below 1465 sending the white metal to print a low at 1450. Palladium traded in a choppy 10$ range. The metal has been shorted during the European morning session but New York came to support the metal back.

 

 

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