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.

 

 

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 13th May 2013

The US Dollar continued its impressive rally on Friday night, which saw a number of major currency pairs break key technical levels. The Australian Dollar fell below parity
against the greenback for the first time since mid 2012 whilst the USD/JPY surged higher, sitting comfortably above the all important 100 level (last 101.80). Finance
ministers of the G7 met over the weekend. European Central Bank President, Draghi, said the ECB was considering buying asset-backed securities as one of many possible
options to support the euro zone. Draghi told reporters that an "extensive discussion on banking regulation" which also included talks about how to close banks. He also noted that the officials had a "clear sense that the different legislation's should converge as much as we can on this point". George Osborne, the Chancellor of the Exchequer was quoted as saying "Finance ministers and central bankers reaffirmed their February commitment to 'not target exchange rates'. Meanwhile Bank of Japan Governor Haruhiko Kuroda (who many believe should have have been under heavy criticism for BOJ's aggressive monetary easing) used the G7 conference to reiterate that the doubling of monthly bond purchases is aimed at meeting the BOJ's 2 percent inflation target by 2015, and explicitly made the point it was not a means of assisting the countries struggling exporters. Whilst the criticism from other G7 members never eventuated, and
there was a general acceptance of the yens decline through 100 per US Dollar for the first time in years, the G7 policy makers said they examined Japan's strategy and that they will continue to monitor its impact on other currency's. German Finance Minister Wolfgang Schaeble was quoted as saying "We had a very intense discussion about Japan with our Japanese colleagues." whilst Canadian Finance Minister Jim Flaherty said that there were "expressions of concern" over exchange rates although "all the countries in the G7 consider themselves to be free trading." It seems the message is that they will tolerate the falling Japanese yen for the time being, but will be 'monitoring' the impact on other currency's. As for data releases on Friday, the UK trade deficit narrowed modestly in March. Exports rose 4.9% m/m and imports increased 3.2% m/o, whilst Italian industrial production declined by 0.8% m/m in March. In a speech focused on the vulnerabilities in the financial system, Federal Reserve Chairman, Ben Bernanke, said the central bank had identified the search for yield, the threat of a run on money market funds and the distinct possibility that short term wholesale markets could dry up in a crisis. He noted "In light of current low interest rate environment, we are watching particularly closely for instances of 'reaching for for yield" and other forms of excessive risk taking, which may affect asset prices and their relationships with fundamentals." He didn't mention which asset classes concern him, he did however refer to the legacy from the Global Financial Crisis four years ago remains, with the economy still not regaining jobs at the rate he would like and with the financial system still struggling to deal with the legal, economic and reputational consequences. He also left the door open that more needs to be done even after the implementation of Dodd-Frank and Basel III rules are fully integrated into the financial system. For the precious metals, the broad USD strength seemed to be the straw the broke the camels back on Friday. The yellow metal finished the week on an extremely soft note, trading as low as 1421, with GLD ETF selling continuing, concerns about tapering QE in the US and a the rallying USD all weighing heavily on the market. The market finished the week 2% in the red as the US Dollar Index is on the years highs. A number of economists are downgrading their 2013 gold forecasts, and risk is certainly skewed to the downside. Adding further downward
pressure to the gold was a report doing the rounds that in light of the the recent weakness in the Japanese Yen, retail investors are turning their back on gold and preferring to invest their money in high yielding equity stocks on the Nikkei. Despite all of the negativity surrounding gold, there is still huge physical demand, predominantly out
of the worlds largest and second largest consumers, India and China. Asia traded in a heavy fashion, following on from Friday's carnage. The precious metals all opened around the day’s highs, but selling from the outset on Globex pressure gold and silver lower leading up to the Asia open. The Japanese provided little guidance as to how the day may unfold, but once the Shanghai Gold exchange fixed, heavy supply hit the market, with stop loss selling accentuating the move. The gold traded as low as 1427.00
before any kind of support was seen. Physical demand was seen throughout the afternoon, which prevented the market retesting the lows seen on Friday, but with the unrelenting selling by the ETF's, we get the feeling this may only be a matter of time. There has been good put buying in the option space, of 1400 and 1350 strikes for the June contract on Comex. The main data release for the day was the Chinese April Industrial Output numbers which rose 9.30% vs est. 9.40%, and the Chinese retail sales figures, which rose 12.80% (vs est. 12.8%). The European session started on the bid and 1440 area has been reached quickly. Unlike Friday the level was that time a wall and continuing pressure from the USD strength holding sent the metal slowly to the Asian lows. The first support is now at 1424.50 the 38.20% Fibonacci retracement since April fall. During New York session gold traded above 1430 but in a little 5$ range with ETF continuing liquidation. Physical gold exports to India has been in concern as RBI informed nominated banks and agencies that gold imports on consignment basis will be restricted to exporters of gold jewellery only as per immediate effect. The restrictions applies to banks only and as the majority of the Gold on consignment that is imported from India is taken by the non-bank agencies the immediate impact has been lighter than initially expected. Some US data were also released: retail sales rose 0.1%
in Apr (consensus was -0.3%) and Sales Ex Autos & Gas were up a solid 0.6% while pressuring slightly gold. Concerning the Euro currency: ECB may cut deposit rate to negative territory if the economy needs further help said ECB's Visco. Schaeuble said complete bank union requires treaty change but Eurogroup's head Dijsselbloem
said issue of EU treaty change for banking union can be addressed later. The Euro currency traded at 1.2440 against Swissy, a level we haven’t seen from January.
Platinum traded lower since Friday but did not reach the end of week’s low at 1470 as it found some bids around 1480. Palladium has been the only metal to trades upside today. The metal took more than 10$ and according to Johnson Matthey Plc’s platinum market is on posts biggest shortage since 2002.

 

 

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: Thursday 16th May 2013

Most currency's are trading this morning where we saw them 24 hours ago with the exception of the EUR, which was weaker on the back of soft Eurozone GDP and weaker
German growth figures. The EUR/USD traded as low as 1.2843 and has made a small recovery since, although it is still trading below yesterday’s opening levels. The US
Dollar's recent strength has been driven by the US economies cyclical out performance relative to the other G7 economies, and rising US yields brought on by increasing
expectations that the Federal Reserve will look to taper its asset purchasing program sometime in the near future. Equities were a little firmer overnight continuing on their
impressive run to the topside, however commodities, and most notably the precious metals, were the big movers, as gold dropped an ugly $33 to touch a low of $1391 whilst silver traded as low as $22.56 before finding a base. The data out of the US was mixed for the most part as the Empire Fed Manufacturing eased in May. The fall in the
expected new orders suggests the easing in momentum will continue over the near term. However, whilst the fiscal spending cuts initiated by the Federal Government will
weigh on growth in the near term, the housing sector in the US continues to perform admirably. The NAHB survey of home builders surprised on the upside in May, with the
expectations series rising to a post GFC high. NAHB Chief Economist David Crowe was quoted "While industry supply chains will take time to re-establish themselves following
recession related cutbacks, builders' views of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force". Also in the US, reports from the Budget Office stated that they are now expecting a 4.0% of GDP deficit (previously 5.3%) - in dollar figures, $USD642 bio, down from $USD845 bio as per previous expectations, and this figure was over $USD1 trillion last year! Across the Atlantic, there were a number of negative reports doing the rounds in regards to the EU's economic recovery. The Financial Times reported on Wednesday that the recession affecting the 17 nation bloc has become "the longest since the single currency was born at the turn of the century." This came on the back of unemployment
figures hitting 12.10%, its highest level on record. France also fell back into recession, output in Italy continues to contract, and even the strongest, largest economy in Europe, Germany, only just managed a swing back to growth. Despite the negative rhetoric hovering over the EU, Bank of England Governor, Sir Mervyn King, said recovery was finally in sight....let's hope he's right! As touched on above, the precious metals succumbed to heavy selling pressure overnight, and closed the New York session under the critical 1400 level. It was reported that heavyweight fund manager George Soros joined Northern Trust Corp. and Blackrock Inc. in cutting their exposure to exchange traded products backed by gold (ie. SPDR ETF) before the crash witnessed last month, whilst fellow heavyweight John Paulson maintained his belief in the yellow metal despite racking up a loss of approximately $USD165 million in the first quarter. Soros Fund Management decreased their investment in SPDR, by 12% in Q1 to a net holding of 530,900 shares, whilst Paulson, the largest investor in SPDR, held 21.8 million shares. The ugly move lower witnessed last month has now wiped out $42 billion from the value of ETF assets according to data compiled by Bloomberg. After gold has witnessed the longest rally in close to 90 years, the metal is now headed for its first decline since 2000. Asia trade was reasonably subdued, considering the carnage witnessed overnight. The market opened on e-comex around the 1395 area with little fanfare, and traded within a two dollar range for the first two hours of trade leading
up to the Tocom open. The Japanese seemed happy to offer the metal, and it looked like the rest of the market positioned itself on the short side ahead of the Shanghai Gold Exchange open in anticipation of Chinese selling. The gold pushed through the New York lows of 1391.50, where light stops were triggered, trading as low of
1387.50 just prior to the SGE fix. The anticipated selling never eventuated and the market scrambled to cover shorts, coupled with bargain hunters entering the fray and physical demand, saw the gold jump close to $10 before settling between 1393-96 for the remainder of the afternoon. It's the first time gold has traded sub 1400 since the
huge sell off witnessed last month, and the market seems to be positioning itself on the short side once again with a large amount of put buying being reported. Gold vols are up 3.5 to 24.5 in 1 month and the option space is pointing to a lower spot price over the coming days/weeks. Pressure on gold did not end during the European session. The morning session saw continuous offers and metal dropped quickly. The 61.80% Fibonacci retracement at 1385 did not hold and gold printed a low at 1370 before lunch time. The metal has been slowly supported back by bad US figures. The CPI fell 0.4% while housing starts fell 16.5% in April to 853'000. Initial jobless claims came much higher than expected with 360K claims versus 328K expected. It is the highest since end of March. Later it is the Philadelphia FED that came really poor, -5.2 were expectation were at 2.0 and previous at 1.3. The metal ended the session just above the 61.80% Fibonacci retracement. Silver lost initially near 3% but managed to recover and ended the session almost where it started. The announcement of AMplats labour leader that said workers will stop at all shafts from Thursday night over proposed job cuts supported PGM’s and palladium was again the only metal trading one way while printing new highs.

 

 

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 10th May 2013

There were huge moves in the currency markets overnight. A decrease in the US jobless claims (+323k vs +335k expected) seemed to be the trigger for a USD rally which continued for the rest of the session. The main movers were the AUD/USD and the USD/JPY. The Aussie is sitting just above parity whilst the USD/JPY is sitting comfortably above the critical 100.00 level, for the first time in four years.. Jobless claims for the first week of May were 323,000, which was a little lower than market consensus of 335,000. The four week moving average declined at the same time to 337,000 (which is the lowest level since November 2007!). This impressive figure, combined with the better than expected JOLTS job openings data released earlier in the week provided further evidence that the US labour market is well on the way to a sustained recovery.
Across the pond, UK industrial production was also better than expected in March, rising by 0.70% m/m. It was reported that manufacturing production was the driving force behind the impressive data, rising by 1.1%. Further, as expected the Bank of England left rates unchanged. Meanwhile, Weidmann, the Bundesbank President, was quoted as saying that the European Central Bank "can still take further (policy) action" as they see fit which gave the EUR a boost. Global equities finished mixed overnight, with the DAX and FTSE 100 finishing in the black whilst the US market finished marginally lower (Dow -22 pts) as market chatter persisted that the recent improvement in the
employment numbers may prompt the Federal Reserve to start tapering Quantitative Easing (as reported in the Wall Street Journal). The gold pulled back overnight in the wake of the drop in US jobless claims and comments from Philadelphia Fed
President Prosser that he favours the scaling back of the central banks stimulus program. The resurgent dollar also weighed down on other commodities like crude and copper. Despite the negative headlines for gold we remain within the broad $1440-1480 range, largely due to ongoing physical support. Demand for physical remains
elevated especially in China and India (ahead of expected legislation changes announced for early June). Hopes are high this will continue, after net gold inflows from HK hit a record in March. Premiums too remain high around the globe with the strong demand - which looks like continuing into the end of the financial year. Elsewhere, ETF's
had their first inflows seen in some weeks yesterday to the tune of +87k oz - a little to early to say we have turned any corners but positive nonetheless. Silver continues to struggle above $24.00 with Chinese names continuing to bombard the topside with offers. PGMs rose on buying ahead of major wage talks between South Africa's major
mining unions and PGM producers and a plan by Amplats to reveal a revised restructuring plan. XPD rose +2% and XPT +0.7%. Gold opened this morning as the dollar picked up steam against the major currencies. Initially this put pressure on
the yellow metal and we probed towards the low seen late in the NYK electronic session of $1454.00. With the USDJPY nearly two big figures higher from where it was yesterday in Asia, Tocom did not provide any material support but it was not a net seller either. We touched the overnight low twice but saw decent bids emerge around $1453.50-4.50 which were enough to halt a test lower through $1450. China proved to be solid buyers -
particularly on the physical side - with the SGE arb out at $18 / oz over spot from the beginning. Spot gold quickly snapped back following this open to the tune of $5 ($1458) then edged through $1460 shortly after. The yellow metal remained well bid despite continued USD strength. USDJPY hit fresh 4 year highs at 101.20 and AUD remained close to an 11 month low. Throughout the afternoon demand dried up yet we hovered just above $1460 throughout. There was no real data of note today and volumes were slightly above average at around 17,000 lots (GCM3). Gold traded downside the entire morning in Europe pressured by a USD still strengthening. Before lunch time, the
metal has been exchanged near 1448.90 the 23.60% Fibonacci retracement of the April rally before pressure increased. Lower physical demand combined to macro selling sent gold through stops and the metal crossed 1440, next support was now 1425 the 38.2% Fib retracement. Gold remained weak as New York came in and ETF were
sellers on the fix. After the fix 1425 has been tested and could not hold. 1mio ounces traded on the break of the support but the metal bounced at 1420. Short covering started there and gold managed to recover through 1440. Until Ecomex close gold even managed to flirt with the 23.60% Fibonacci retracement again. Bernanke did not
comment on outlook for monetary policy but Schaeuble said g7 will discuss foreign exchange rates. Silver remains stuck below 24.00 and has been driven by gold today. Some stops triggered below 23.60 but after printing a low at 23.20 the grey metal managed to recover from today’s drop and ended the day above the morning level.
Profit taking in platinum combined to the gold pressure pulled the white metal 40$ lower while palladium remained strong. XPD traded above 700 almost the entire day. We heard some news from miner Anglo American Platinum. It said it may cut 6,000 jobs and aims to cut production by 250,000 oz per year.

 

 

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 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: Wednesday 15th May 2013

Overnight trade saw markets continuing their recent theme, as confidence in the economy grows which was reflected by small business optimism numbers released in the US. The surging US Dollar continued its ascent, new all time highs in equities were reached, and global bond yields drifted higher. The S&P500 rose 0.80%, whilst US 10 year yields increased a further 6 bps to 1.98% as money and asset allocation continues to favor equities. The positive sentiment overnight was slightly dented as the German ZEW printed lower than expected and as a result the EUR succumbed to heavy selling pressure touching a low of 1.2912. The AUD/USD was pressured to a low of 0.9877, as the Australian budget was released which highlighted a blow out of the expected $10.9 bio deficit to $22bio! What is also a major concern for the Australian economy is that a number of economists have downgraded their growth forecasts to 2.75% in the coming
financial year, which is well below the long term average of 3.25%. Unemployment is also tipped to rise from 5.5% to 5.75%. Ratings agency S&P were quick to settle the market fears about a slowing economy, stating that Australia's rating's are unaffected by the weak budget and that there is no immediate threat to the AAA rating. The Government forecasts a gradual return to surplus by 2015/16. Adding further pressure on the AUD was a report on Bloomberg overnight stating that the worlds two largest
mining companies, BHP and Rio Tinto have both indicated that they will be cutting capital expenditure by approximately 20% in the 2014 fiscal year. Rio is on track to
cut $2 billion in costs across its mining and corporate offices. Chief executive Sam Walsh was quoted saying "We are targeting significant cash proceeds from divestments this year, and are looking at further disposals of potential non-core assets, in addition to those we've already announced," adding that the company has already generated $14
billion over the past five years by selling some of its assets. This is in conjunction with new chief executive of BHP Andrew Mackenzie, pledging to put the brakes on profligate investment over the next few years, following mediocre returns from a number of big projects such as shale gas which has drawn a huge amount of criticism from shareholders. Just days after officially taking over as chief executive Mackenzie said one of his main goals was to deliver substantial free cash from operations including oil and gas fields in the US, iron ore deposits in Western Australia and copper mines in Chile and that each of BHP's divisions must 'stand alone', producing cash flow, and will have to vie against other operations for future investments. Mackenzie was quoted "If a project, geography or commodity doesn't offer the right returns we will redirect our capital elsewhere or we simply won't invest. That will obviously create an opportunity to have more capital returned to shareholders and that is the balance that I'm very concerned to get right." Rio finished around 3% lower and BHP around 2% in the red on the Australian stock exchange today. Overnight, there was further talk from the Fed in regards to tapering QE. This time it was Federal Reserve Bank of Philadelphia President Charles Plosser, who noted that he wants the central bank to begin cutting back on its bond buying as soon as its next policy meeting. He was quoted "Labour market conditions warrant scaling back the pace of purchases as soon as our next meeting,", he added "unless we see a significant reversal in current trends that
jeopardises my forecast of near 7% unemployment rate by the end of this year... anticipate that we could end the program before year-end." Plosser also noted "Were the FOMC to refrain from reducing the pace of its purchases in the face of this evidence of improving labor market, it would undermine the credibility of the Committee's
statement that the pace of purchases will respond to economic conditions."
Moving on to the precious metals, as the gold traded heavily overnight on the back of the USD strength and the rallying equities. The key level on the downside, 1420, was tested once again but held firm and the after reaching the low, the market staged an impressive short covering rally back up to 1439.00. Gold is now 3.30% lower this
month already, and trading volumes remain on the high side. The first major level of resistance on the topside comes in at 1448.30, which was the high witnessed earlier in the week, and above that, 1461.20 (last Fridays high) remains an important level to keep an eye out for above the market. ETF's continue to weigh on the market. Overnight, Deutsche Bank commented on the continual outflow seen in the ETP markets, and they are expecting another 2-4 million ounces to be sold into the market. Adding to negative sentiment surrounding the yellow metal was news that the Reserve Bank of India will allow gold import consignment only to meet genuine demand. Despite all of the doom and gloom surrounding the precious, one must keep in mind the unprecedented physical buying seen, in particular in Asia. The physical market is on target for the best year on record, as premiums and metal shortages are still at elevated levels - this is reflected in Shanghai Gold Exchange as it is still trading at a high premium over spot.
Asia traded in a relatively tight range today, with both gold and silver pushing lower over the course of the morning. Volumes were on the light side, but the lead up to the Chinese open, the market found itself caught a little long and squeezed lower from 1430 to 1424, but once the SGE fixed, the selling didn't gain any momentum, and it seemed the NY lows, and key support 1420 were going to hold once more. The market feels as though it wants to test under 1420 as there is market chatter that large stops are accumulating, and more again at 1400. Putting further pressure on the already vulnerable market, are ongoing reports from investment banks downgrading
their gold targets for the year. Goldman Sachs analysts released a report stating i)expectations for reacceleration in US growth later this year is likely to weigh on gold prices going forward; and i) continued large fall in ETF's likely to continue to weigh on market. There is nothing new there, but with the continual pessimistic views being bandied around, any longs out there must be ultra precautious as momentum can quickly gain traction, just like we saw last month with the gold dropping the most it has fallen over a 24 hour period in history !!! In other precious news, the PGM's continue to be the shining light for the complex, mainly due to the unrest in South Africa, and the ongoing supply issues. It was reported today that workers at Lonmin's South African
operations held a wildcat strike which closed the Marikana mine and triggered worries about fresh violence at the same site of protests that resulted in the deaths of 34 people last year. The workers at Lonmin will be striking once again today. Platinum is still trading either side of 1500, and palladium 722 despite the weakness seen in gold and
silver. Once London session started, gold took out 1424 level which is the 38.2% Fib retracement of the April rally on a stronger greenback after some rather disappointing German and French figures. The yellow metal traded above 1405, the 50% Fib retracement of the April rally, until Comex open. The complex has been slightly supported as New York came in and data were released. The US April Producer Prices dropped by 0.7%, Core rate rose by 0.1% and the U.S. May Empire State Factory Index came at -1.4 after 3.1. Later the U.S. April Industrial Production decreased by 0.5%. On the fix pressure showed up with ETF offering the metal again. Soon an attack to
break 1405 succeeded and stops went through while crossing 1400. Market printed a low at 1391.50 before the Comex close and even over took it before Ecomex closed. The first support lays now at 1385.48 the 61.8% Fibonacci retracement and should be strong with RSI and Stochastics so heavily oversold. Silver pursued its dramatic fall after breaking the 50% Fibonacci retracement during the Asian session. The grey metal did not see the 61.80% and 76% Fibonacci retracement on its way down. Stops triggered below 22.85 sending the metal 35¢ lower. Silver is now 40¢ away from the year low.
Platinum has been pulled by gold and fell from 1500 area to 1470 but managed to recover 20$. Palladium lowered the morning session and recovered slowly without being affected by the others metal fall. Striking South African Union told Lonmin that workers will return to their posts from Wednesday night shift. The news had no negative
impact on the PGM’s.

 

 

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 9th May 2013

German industrial production was stronger than market expectations for a second consecutive month giving the EUR a boost to almost trade through the psychological
1.3200 barrier. The German numbers were coupled with news that Germany's cabinet has approved the EU plans to place all system-relevant banks under the supervision of the ECB. The ECB also signalled that they have a plan to purchase asset backed securities to help encourage bank lending to households and businesses. After the positive trade data out of China yesterday, equity bourse's in Europe and the US found support which saw a number of markets reach record highs once again. The Dax was at a new record high and in the US positive earnings saw the Dow rise and close around the 15,100 area. Commodities also traded with a firm bid with crude, copper and gold all higher and finally the 10 year US Treasury yields fell, albeit only one basis point to 1.77. The AUD once again tested the key support 1.0150 after poking its head above 1.0200 in early London but lacked any downside follow through and now awaits the
employment figures released later today. In other news overnight, Mexico's credit rating was upgraded by Fitch and the 12.00 level broke (strongest level since August 2011)
without much of a stir. The main data release today was the Australian employment figures which beat most expectations sending the AUD close to 100 pips higher! Employment rose by a sharp 50,100 m/m in April. far above the +11,000 expected. The
unemployment rate also improved marginally, retracting 0.10% to 5.50%. The much better than expected figures reduces the chances of another rate cut any time soon by the RBA giving the AUD/USD a significant boost. Job gains were strongest in the full time category (+34.5k full time jobs) and a rise of 15.6k in part time jobs. The Australian labour market continues to compare favourably with most other advanced economies. The US unemployment rate, although on the way down, is still at lofty levels (7.50%) and the UK a little higher at 7.90%, whilst the eurozone labour market remains extremely weak and vulnerable, with an unemployment rate of 12.10% (Germany 6.90%, France 11.00%, Italy 11.50% and Spain/Greece >25%!). The other key economic data release today was the Chinese inflation figures. The consumer price index rose 2.4% y/y in April, rebounding from 2.1% in March. The rise was on the back of an increase in the
cost of food, in particular vegetables, after an unusually cold start to spring. However it was worth noting that nonfood elements in China's CPI increased by just 1.60% y/y in April. Producer prices fell further into deflationary territory, falling 2.6% y/y which is a 6 month low. Precious metals experienced significant gains overnight, with gold advancing more than $25 (+1.5%), the largest upside move in two weeks. Gold ETF's, and in particular the SPDR fund continue to gain a lot of attention at the sheer pace and size of the redemptions being witnessed by the market. ETP holdings dropped further to 2,239.64 metric tons, after a record fall in April. Given the performance of high yielding equities across the globe of late, the record reaching indices, reduction of tail risk in Europe, rising labour market in the US, and anemic inflation rates, people are preferring to put their money back into the stock markets, whilst reducing their exposure to
commodities. Despite the ETF reduction in length, imports into China from Hong Kong more than doubled to an all time high in March, Hong Kong government data showed yesterday. India's purchases are also off the richter scale, topping 100 metric tons for the second consecutive month as touched on yesterday. Mainland China purchased 223,519 kg of gold in March, compared to 97,106 kg in February. Asia traded in a similar fashion to yesterday, with some early supply seeing the gold push a little lower, only to see better than expected economic data released, putting risk back on the table, and gold benefiting. The yellow metal traded sub 1470, touching 1469 briefly, but once the employment figures out of Australia were released, the market gapped higher, trading as high as 1476.25/75 before settling either side of 1474.00. There is market chatter
that physical shortages are driving the short term lease rates up by 5bp and that could well be one of the reasons gold squeezed higher yesterday, stopping shorts on the break of 1470, even with equity markets continuing touch all time highs. Silver benefited from gold's ascent, but still seems to be lagging the other precious metals, currently
trading just north of 24.00. Morning session in Europe was quiet as gold traded in a little 5$ range. ETF liquidation from a London listed product completed it selling with relative ease. Some data from England were released today, UK industrial production (March) came at 0.7% m/m well above market expectations of 0.2%. Mfg output was better than
expected at 1.1% instead of 0.3%. BoE decision came as expected with no change. Pressure on the yellow metal strengthens before New York came in and gold swiped from 1470 to 1465. Pressure continued as US initial jobless claims fell 4'000 last week to 323'000. Gold bounced at 1460 on pre fix buying and recovered slowly to 1470.
Wholesale inventories in US increased 0.4% as sales slump. Evans said unemployment was too high, inflation low and that FED should continue to push policy as hard as it can. After Comex closed and as we were trading around 1470, pressure came sending quickly gold to the lows of last three weeks range. Silver traded the morning session near 24.10 but tested several time the 24.00 key level. New York started the session on the offer and pulled the grey metal 20¢ lower. Silver could not cross back the 24 level and fell to 23.60 following gold move.
President Joseph Mathunjwa said in Johannesburg, Association of Mineworkers and Construction Union will negotiate wage increases with mines individually rather than via traditional central bargaining system. Anglo American's platinum arm, under pressure from South Africa's government, could announce a restructuring plan as early as Thursday that will sharply scale back job losses as it tries to balance out cost cuts and the threat of labor unrest (Reuters). Platinum traded up side with stops triggering above 1505. The white metal reached 1516 later but lost after the close the 10$ it gained from 1505. Palladium traded sideways 700 before stops triggered around 705. The metal managed to remain above that level. Year to year South African PGM output climbed 1.8% in March.

 

 

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: Tuesday 14th May 2013

Overnight proved to be a very quiet session. Tight ranges were seen across most asset classes with better than expected US retail sales data triggering only a modest reaction in currency markets and US Treasuries. The USD continues to trade well bid against most currencies with the USD/JPY flirting once again with the 102 handle whilst the
EUR sat comfortably sub 1.3000. The AUD/USD also continued to trade heavily with any rally towards parity being looked as a selling opportunity by the market. US retail sales data for April printed stronger than expected and also included upward revisions for previous months. The headline sales figure rose 0.10% (vs consensus -0.30%). Control sales, which is retail sales excluding gas/automobiles/building materials rose 0.50% m/m (mkt +0.30%m/m). Core retail sales were also upwardly revised in March and February. The stronger than expected data suggest that the January payroll tax hikes have not dented consumer spending significantly as many predicted, with only a modest decline in household spending growth expected for Q2. Looking ahead, expectations are low for US industrial production (Wednesday) and US CPI (Thursday), and if there is an upward surprise, as there has been with a number of recent releases, there is a good chance for the USD to continue its impressive ascent. Despite the USD surging ahead over the past few weeks, there was an interesting article in the Financial Times in
regards to US hedge funds turning bullish on the euro. Here is a snippet from the article: " Park Avenue, Manhattan, is half a world away from Kaiserstrasse, Frankfurt, and the corridors of the European Central Bank. The closest that the hedge funds of New York have come to austerity is cutting back on helicopter trips to the Hamptons. Yet with
distance also comes the ability to reflect and the confidence to act. So while investor sentiment in Europe remains wary, the US smart money is looking for opportunity in the belief that disaster has been averted. Over the past two years US investors have raised money for opportunities in Europe without actually finding much to do, but this is
starting to change, says Mr Nolte. For instance, “European banks remain wary of Greek businesses that still need access to capital markets, and some hedge funds are starting to fill that role”, he says. Meanwhile, former bears on Europe’s single currency have been converted. The head of one large hedge fund says he no longer sees a break-up as likely following the actions of the ECB last year, which launched a bond-buying program designed to save the euro: “They have done enough, we don’t see a collapse as a likely scenario in the near term anymore.” Other US based investors who last year piled into sovereign debt of southern European countries and have since moved on to Europe’s healing banks, talk in the language of optionality: Europe has not fixed all of its problems, but moves to recapitalize financial institutions and support governments have bought time, which has significant value, even if the precise nature of mechanisms such as a banking union are yet to be laid down.” The entire article can be found on the following website: http://www.ft.com/intl/cms/s/0/a1b50b64-bba8-11e2-82df- 00144feab7de.html#axzz2TDfbiQkM Despite the narrow ranges seen overnight in the precious metals complex, a lot of attention is being paid to the dwindling platinum output (lowest in 11 years) in South Africa due to the ongoing large scale labor unrest.
Platinum shipments by South African producers fell by 16% in 2012 to 4.1m ounces, reducing global supply by 13% to 5.6m ounces - the lowest level in twelve years. The platinum shortage was 375,000 ounces and Johnson Matthey was quoted as saying that a "slight deficit" is possible for this year as well. Meanwhile, the world’s largest
producer of the metal, Anglo American Platinum Ltd, stated that they plan to cut platinum output by 250,000 ounces this year as part of the plan to return to profitability due to higher costs and lower demand. Taking into account that Platinum traded as high as $1740 (17 month high) earlier this year, and the aforementioned supply concerns, there is good scope for the metal to push higher over the coming weeks/months (there was also a report out late today that Lonmin says its mine workers haven't gone underground, and AMCU members at Lonmon start strike after an official died). It is worth noting that Palladium also moved into deficit of 1.1m ounces in 2012 from
a surplus 1.2m ounces. Demand increased 16% to 9.9m ounces due to more cars being sold in China, Japan and the US. Asia trade was a reverse of yesterday's as good buying interest was seen from outset by the Japanese on Tocom and Chinese on the Shanghai Gold Exchange. The market opened on the day’s lows on Globex, with little activity initially noted, but with the lead up to the Tocom open, the market pushed a few dollars higher to trade just shy of 1435.00. Once Tocom fixed, good buying interest pushed the yellow metal through 1435 where sizable offers were seen on the futures exchange, and an hour later when China opened, the positive momentum continued seeing the gold punch through 1440, which was the New York high, triggering stop loss orders and a wave of buying on the e -comex exchange sending the market screaming higher reaching a top of 1445.50 before profit taking emerged. Good sized offers seemed to continue throughout the day on the electronic exchange, but physical buying was unrelenting and the market finished the day only a couple of dollars from the highs, with early London buying already noted. European session started and slowly erased the entire Asian move. Before lunch time stops triggered below 1435 and sent gold toward 30’s. Pressure coming from the stronger USD continued along the day and gold printed the low at 1421.40 as New York session has started. Situation reversed as prefix buying supported back the metal and market even went to test the 40’s level after the fix. Gold failed to overtake the level and fell back to the lows. The precious metal remains stuck in the 1420 – 1480 range for the fourth consecutive week but that range tightened this week to trade between 1420 and 1450. Silver has been under pressure during the morning session. Market saw more offers coming once New York opened and silver printed a low at 23.13. The grey metal followed gold on the prefix move before lowering again and ending the day near 23.10. PGM’s were a bit more nervous today. Platinum traded in a choppy 25$ range. The level of 1485 has been tested several times and showed to be a good support. If 1500 could not hold the morning session it did afternoon. Palladium is still benefiting from the shortage production and combined to strike at Lonmin, the metal printed a new high since April fall.

 

 

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 8th May 2013

Very strong German data overnight in the way of better than expected factory orders for March supported the positive sentiment in Europe. Factory orders rose 2.20% m/m in
March, which was well above market expectations of a modest fall for the month. Within the releases, it was noted that domestic orders rose 1.80% m/m and foreign orders
were up an impressive 2.70% with orders from within the euro zone up solidly. The data provides further optimism for the economic recovery in the region and is likely to see the
markets revise upwardly its forecasts for tonight's German industrial production for March. The better than expected data was the catalyst for a jump in the EUR, however after reaching a high of 1.3132, the currency lacked any follow through buying and is now consolidating around the 1.3080 level. European equities were also given a boost and sovereign bond yields in the EU narrowed against German bunds. In the US, after a brief dip in early trade, the S&P500 marched higher throughout the session touching another all time high. The index finished up half a percent for the day. The positive momentum in equities is gaining more and more traction by the day, and money is flowing to risk on assets that are offering yield, whilst commodity ETF's continue to be liquidated, such as the largest gold ETF, SPDR, which dropped to its lowest level in four years. As mentioned yesterday, the Reserve Bank of Australia cut interest rates by 25bps to an all time low of 2.75%. The Board decided to act on its 'scope to ease', which was made easier by a strong AUD and a subdued inflation outlook. Economists are of the opinion that the RBA is implicitly saying it is less confident that other sectors of the non- mining economy will strengthen as it hopes to offset the slowing mining sector, particularly given the high level of the Australian Dollar. Another cut is factored into the rates market later in the year, and an easing bias to be retained into 2014. There was further market chatter than George Soros had heavily shorted the AUD prior to the
interest rate decision, not with one broker, but three, and had in fact made a tidy profit of $US60m in less than 36 hours. The article in one of Sydney's leading newspapers and can be found on the following link:
http://www.smh.com.au/business/markets/billion-dollar-bet-on-rate-cut-pays-off-20130507-2j5j5.html
The precious complex succumbed to selling pressure overnight with further outflows seen in the ETF's (-145,048 ounces in gold). Gold lost more than one percent, as the $1480/90 level is becoming significant resistance, ahead of the key $1525 breakout level. It was reported that last week alone, ETF's had its largest outflow in over 3.5
years as redemptions totalled more than $USD323m. In other gold related news, news was circulating that Paulson's gold fund dropped an ugly 27% in April - which didn't exactly catch the market by surprise considering the carnage witnessed last month. Paulson's fund has now fallen by about 47% this year alone. The Asian market started the day with selling from both the Chinese and Japanese. Gold looked vulnerable to the
downside when the market traded under 1450, with offers accumulating on Globex. The market oscillated either side of 1450 for the ensuing hour or so, with all eyes eagerly awaiting the Chinese import/export data. The figures exceeded most market expectations, which saw high yielding currency's such as the AUD and NZD gap higher as risk was firmly back on the table. The strength in imports was particularly notable, as key commodities such as iron ore are seeing an uptick in demand as prices have been subdued of late. Imports gained 16.60% y/y in April, compared to 14.20% y/y in March. Gold also found a solid bid after the data, and pushed above 1452 where some initial resistance was seen. Once the offers had been slowly paid, the market took off to the upside, as stop loss orders were triggered on the break of 1455 which in turn saw the yellow metal gap close to $5 touching 1458.00 before any supply emerged. The PGM's recouped some of last night’s losses (Pt was -1.8% and Pd -2.4% overnight) after the Chinese data. Platinum traded $10 higher whilst the palladium gained a couple of dollars. There was a report hitting the wires, that after 7 years of surpluses, the platinum market actually switched to a deficit of 83,000 ozs in 2012 due to the ongoing disruptions to mine supply in South Africa. Palladium's annual deficit was even worse, deepening to 1.1 million ounces ! On the physical front, there seems no end in sight for precious metals appetite across the globe, especially out of China and India - which account half of the worlds demand. Purchases in China for the month on March were
more than three times higher than the 62,913 kgs for the same period last year. China's gold consumption jumped a staggering 26% to 320.54 ton in the first quarter compared to 2012. The same goes for India, who are expected to exceed 100 metric tons for the second consecutive month in May, as investors and jewelers all try to make the
most of the slump seen in the gold price. The question is who will win the battle between the unprecedented physical demand, and the unrelenting ETF supply. Indian buying kept going into London open supporting gold. The metal traded sideways 1465 during the morning session. Short term macro buying added support after lunch time and gold traded towards 1460 before New York joined the session. Comex opened on the bid side and rapidly tested 1470. The afternoon remained quiet and gold traded in a 5$ range until it jumped though 1470 before the close. The yellow metal printed a high at 1476.50 and kept trading above 1470 until the electronic close. The Euro currency remained strong along the day. EU official said Eurogroup to discuss EU banking-union plans. Mersch said ECB looking at ways to restart ABS market and may securitize SME loans to encourage lending. Seibert also said ECB will oversee all system-relevant banks. Silver remained stuck below 24.00 during the morning session and managed to break the level to reached 24.10 before New York open. The American came session offering the metal and sent it again below 24.00. The grey metal couldn’t cross back the level. PGM’s recovered from yesterday’s fall. Platinum started its rise from 1485 at lunch time until it reached 1506 while palladium climbed from 682 to bounce just below 700.

 

 

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.