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 : Tuesday 7th May 2013

Despite a UK and Japanese holiday yesterday there were still some good ranges seen in the currencies overnight. The AUD fell to a low of 1.0222 ahead of the RBA interest rate decision today, whilst the EUR weakened against the US dollar after European Central Bank President, Draghi was in the headlines once again, noting that the ECB is open to further policy support. He was quoted as saying "We will be looking at all data that arrives from the euro area economy in the coming weeks and if necessary, we are ready to act again. Monetary policy will remain accommodative...there are many consequences that we must take into account and study closely. The Governing Council has decided to analyze these consequences in order to be ready to act if needed." Meanwhile, retail sales in the euro area fell 0.10% m/m in March which is now 2.40% lower than it was a year ago. The EUR traded as low as 1.3054, before finding its
feet as it appears the single currency's downside risks are limited due to the on-going significant support from European market sentiment. Both European financial equities and the core-periphery spreads have been moving in a favorable direction which in our opinion indicates that the EUR/USD can potentially strengthen up to the 1.34-35 area.
In the US, the April Senior Loan Officer Survey reported that, on balance, domestic banks eased their lending standards, having experienced stronger demand in several loan categories over the past three months. This data further supports Bernanke's comments made last month that banks are "notably stronger than they were a few years ago". The precious metals traded in a subdued fashion overnight (trading volume was 65% below its 15dma), with the gold only having an $11 range. GLD ETF outflows continue which seem to be weighing on investors’ minds. Yesterday another 106,372 ounces were redeemed. ETF outflows continue to be gold's key downside risk, and a number of analysts are forecasting lower prices in the short/medium term based upon the past few months of ETF reduction in length. The GLD ETF has now seen approximately a 22% loss of investor funds since the beginning of the year! On the flipside, physical demand has been unrelenting, as interest for gold bars/coins remains at elevated levels around the globe. Both the Chinese and Indians have been sizable buyers and the shortages in their respective markets have seen premiums blow out, and arbitrage opportunities reaching USD 30-50 per ounce! Israeli missile strikes into Syrian territory have also supported prices of late. As mentioned above all eyes were on the Reserve Bank of Australia today, and if they would cut rates from 3.00% to 2.75%. It was the closest call in a long time with the Bloomberg survey of economists reporting that it was neck and neck between the doves and hawks at 50% a piece. The AUD hovered nervously around 1.0240 level prior to the decision, and when the RBA announced a cut by 25 bpts, the currency dropped 60 pips in a heartbeat, breaching the all important 1.0220 level. The Reserve Bank stated "The Board had previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand. At today's meeting the Board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target." Adding further fuel to the fire of the Aussie's demise, there was a report in the Sydney Morning Herald overnight that Soros was preempting the RBA's cut. A snippet of the article is as follows: “The Australian dollar fell in overnight trade on the back of rumors that billionaire US investor George Soros is betting the local currency will fall. The Aussie dollar slipped from $US1.0284 in late local trade to as low as $US1.0222 in offshore trade as traders reacted to unconfirmed rumors that Mr Soros - who famously shorted the British pound back in 1992 - was planning a raid on the dollar ahead of today's interest rate announcement....A large number trades shorting the dollar totaling $US1 billion were placed via Hong Kong and Singapore late Monday, believed to be by Soros Fund
Management." Asian precious metals traded within a healthy $10 range today. Initial bidding saw the market touch a high of 1470.00 before selling from Tocom and the Shanghai Gold Exchange pressured the market lower, briefly trading under 1460 before profit taking and physical buying once again propped up the yellow metal. Light selling was seen after the RBA decision, pressuring the metal down towards the day’s lows. Silver remained vulnerable, with resistance at 24.86, the 38% retracement of the March/April sell off. Support now lies at 23.14, the 62% retracement of the April recovery. A break of this opens the key 22.07 level, which was the April low. In Europe, France saw its industrial production and Manufacturing production down 2.5% and 4.9% YoY
respectively; lower than anticipated. The CAC 40 was still trading up 0.70% today after the numbers. In Germany the March factory orders rose 2.2% vs an estimated 0.5% drop. On the back of the figures, the European currency gained 50bps against the dollar to trade sideways of 1.3120 by later afternoon. On the precious, as Europe came in, some offering emerged and once again tested the 1458-60 level. Gold traded
in between 1458 and 1465 the entire morning with a quick spike above as the Q1 gold consumption in China was released. The figure came out to be at 320.54 tons or a rise of 25.6% from a year ago the China Gold Association said in a report; mainly thanks jewelry demand which accounted for 55% of the rise. Pressure was soon to be felt
on the yellow metal as Comex opened however; 1.1mio ounces traded on a $10 single drop down to 1450. Pre fix selling and large amount of offers on the fix pushed the price lower after to settle at 1444.25 in the afternoon. Gold printed then a low at 1441.30 and remained heavy while trading between 1450 and 1455 the rest of the session.
Silver has been shorted as New York came in and fell to 23.45. Later the grey metal managed to recover and ended the day above the London open but just below 24.00.
On the PGMs side, the ABSA platinum ETF, which launched on April 25th, reported holding already 172k ounces of platinum. The metal lost over $20 starting early in Asia to a low of 1480 after a second attempt to break above the old 5year uptrend support, which lies around 1510. Palladium traded near yesterday’s low during the morning
session. New York joined the session offering the metal and stops triggered pushing market below 685. 680 area is now the fist support and a break of it could send the metal to the year lows.

 

 

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 1st May 2013

The USD was by far and away the biggest mover overnight. A combination of factors all drove the USD lower as positions were unwound and end of month squaring
pressured the greenback. The biggest mover was the EUR which rallied to a high of 1.3186, which was even more impressive due to the fact that euro zone activity and
inflation data appeared to cement the view that the ECB will cut the ref rate by 25 bp on Thursday. The continued rally in US rates (10 yr trading at 1.66%) is also being looked upon as one of the main drivers of the declining dollar. In the US, the Chicago Purchasing Manager Index (PMI) unexpectedly fell to 49.00 (vs consensus 52.50) in April from 52.4 in March. This figure combined with other US regional PMI's suggests a slowdown in manufacturing activity in the region. Most significantly, the employment component dropped to 48.70 (6.4 points lower). Despite the weaker than expected
data, the Dow finished the session 21 points in the black, showing its continued resilience to market volatility. In Europe, CPI inflation eased in April. The provisional CPI
rose by 1.20% y/y versus 1.70% y/y in March. This suggests a broad based easing in momentum in the region which has increased the chances of a cut in rates tomorrow. Further dampening expectations on a speedy recovery in the beleaguered region was the unemployment figure edging higher to 12.10% in March, with youth unemployment a
staggering 24%! As for data releases, it seems market participants are awaiting the FOMC. Most economic data releases since the last Fed meeting has been softer than expectations, and some Fed officials have expressed their concerns about the risk of
an inflation undershoot. Weakness in the economy seems to be mainly due to temporary factors, such as the inventory cycle and the defence spending cuts. It is broadly expected that quantitative easing will continue at its current pace throughout 2013, and will begin tapering off early 2014. Rate hikes are expected to come into play in
2016, based on economic forecasts that the unemployment rate will reach the Feds target by then. The precious complex traded in reasonably tight ranges overnight, with the gold consolidating between 1460-1480. The downward pressure has been alleviated for the time being as the professional market looks as though it is caught a little short whilst physical players continue to have unprecedented demand. Sales of gold coins by the US Mint rose to the highest levels since 2009. Sales totalled 209,500 ounces, which is up considerably from the previous month (62,000 ozs). Silver coin sales have also risen impressively to 4.2 million ounces from 3.36 million
ounces in March. The surge in demand has been seen across the globe, from Dubai, to Istanbul, to China and India. Trading volumes on the Shanghai Gold Exchange hit a record last week, while premiums to secure supplies into India jumped 500% compared to the levels seen prior to the slump in prices. With China being close Monday, Tuesday and Wednesday this week, many pundits expected the gold market to come crashing down as the Chinese have been huge buyers of late. This hasn't transpired, and if anything the market it trading firmly, with support at 1460 holding. With SGE reopening tomorrow, the market could well get a further push, with 1500 the next key level on the topside. With the absence of China, Hong Kong, Malaysia, Singapore and Thailand today, the Asian market was lackluster to say the least. There was very little interest and volumes were well down on what we have seen over the past few
weeks. The yellow metal opened close to the days highs and edged lower over the course of the morning without much fanfare. The main data release for the day was the Chinese PMI which fell to 50.6 in April from 50.9 in March, which indicates a marginal slowdown in manufacturing activity. This was mostly driven by a drop off in new export orders. All in all a very quiet day with only 7000 lots GCM3 trading in the first 7 hours. Price action should remain contained up until tonight's FOMC. As Europe came in on the 1st of May, liquidity was thin and some offers quickly put pressure on gold which lost
6.5$ until lunch time and made a last drop to test 1465 before the American session started. The yellow metal then settled in between 1465 and 1470 until a bunch of headlines were released coming from the U.S. The U.S. Treasury Department said it may decide to reduce the size of future note and bond auctions, depending on the
government's fiscal situation. The reaction was immediate and the metal broke 1465 to fall down to 1450, on spec selling, just before the afternoon fix where bids re-appeared. Members of the committee decided that adjusting bill issuance could help manage funding needs for now. After the fix, some stops below 1450 triggered and gold saw
another drop down to 1445 and then to 1440.50(low of the day). At this level bids provided a good support ahead of the FOMC rate decision. Fed made no policy changes and said to be prepared to increase or reduce QE as the depending on the outlook. For
the moment it will maintain the $85 billion monthly pace of bond buying and said fiscal policy is restraining economic growth. Intraday stops triggered then on the way up above 1455 and the precious then settled at this level. Silver kept on going lower most of the day, losing more than 1$. It managed to recover half of its loss until the close and followed gold on the FOMC decision to take 15¢. Lack of demand on Silver resulted in a new descent to trade near 23.60 before Ecomex close. PGM’s have been under heavy pressure and so despite Lonmin working at a slower pace. Platinum lost not less
than 40$ and wasn’t able to recover even a third of it. Palladium fell by more than 20$ but regained half of them to trade above 685.

 

 

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: 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: Monday 6th May 2013

The major release on Friday evening was without question the non farm payrolls in the US. The figure was much stronger than expected (165,000 versus 140,000 expected)
alongside significant upward revisions (March revised up from 88,000 to 138,000). US and European equities both had solid sessions (Dow +142 points, DAX +160.58 pts),
whilst US treasuries were sold off heavily. Employers in the US hired at a steady pace throughout April and the Labour Department significantly raised hiring estimates for
Feb/Mar. It was reported that private companies added 176,000 jobs (150,000 consensus), and the business services sector added 73,000 jobs, including 31,000 temporary workers. The unemployment rate declined by 0.10% to 7.50%, which is the lowest level since December 2008. The number of unemployed dropped by more than 80,000, whilst the number of employed workers in the US jumped by 293,000. Across the pond, European Central Bank Governing Council Member Nowotny seemed to down play the possibility of a negative interest rate on the ECB's deposit facility. He was quoted as saying "I think the markets over-interpreted this point. Of course, there is
always some kind of technical discussion about it but there is no specific plan...I would say one should not see this as something that might become realistic in the foreseeable future....although we are open minded about it." The EUR/USD seems to be benefitting from a sustained improvement in the eurozone market sentiment, including
further narrowing in the periphery-core yield spreads and a sizable rally in equities. This morning's open was reasonably quiet with no big headline grabbing news over the weekend. Levels across most markets were in line with where they closed in the
US on Friday. The only news from the weekend that could have an impact was that Merkel is severely struggling in the German polls as per the following website http://www.reuters.com/article/2013/05/05/us-germany-electionpoll- idUSBRE94403920130505. In Asia, the Malaysian elections have come and gone and the existing government has won, despite a number of conspiracy theories doing the rounds that the the polling was rigged. It is a big week ahead for the AUD, with the Reserve Bank of Australia's interest rate decision released tomorrow (50%
chance of rate cut as per BBG economist survey) and also retail sales today (weaker than expected: -0.4% m/o vs 0.10 expected). There is also a slew of Chinese data starting on Wednesday with the trade releases, followed by inflation on Thursday and credit data sometime on Friday. Gold witnessed a volatile session in London and New York on Friday. Short specs were washed out (again!) as the market broke to the topside touching 1488, only to drop $30 trading sub 1460, before settling around 1465/70. In
other metals, copper was the star performer, rallying 6% whilst silver also staged an impressive rally, gaining nearly $1, reclaiming the 24.00 handle. In Asia, due to Children's Day in Japan (UK is also closed), Tocom was closed, and most market participants were keeping a close eye on the Shanghai Gold Exchange. The Chinese were once again good buyers on the open, and in thin conditions the gold jumped nearly $10 touching a high of 1478.75/25 before settling for the remainder of the day between $1474-77. The yellow metal kept its bid tone for the PM session and finished the day up towards the days highs. With the market making higher highs/higher lows,
global physical demand unrelenting, the latest COTR reporting a record non- reportable/non commercial gross shorts and market chatter of large stop loss orders accumulating above 1500, the market has every reason to push higher over the coming days/weeks. Equity markets all posted solid gains in Asia, following on from Wall Street's lead. The Shanghai A Index +1.00%, Aussie All Ords +0.70% and Hang Seng +1.10% at the time of writing. Other news reported over the weekend is as follows:
· Europe's move to give France two more years to cut its public deficit to below 3 percent marks the end of the "austerity dogma" in Europe, French Finance Minister Pierre Moscovici said on Sunday. The European Commission on Friday gave France two more years to meet its budget deficit target because of the country's poor economic outlook within the recession-hit euro zone. · Francois Hollande has denied freezing co-operation with Angela Merkel until German elections in September, Spiegel reports, without saying where it got the information. Hollande made comments at closed-door meeting with Luxembourg Foreign Minister Jean Asselborn: Spiegel · The debate over the yuan’s exchange rate should focus on the mechanism by which the currency’s level is
set, not its actual valuation, China’s official Xinhua News Agency wrote in an unsigned commentary. The goal should be on “perfecting” the exchange-rate mechanism to guide the yuan to a “dynamic” equilibrium, not on the numerical value of the currency, Xinhua writes. “Losing the real focus of the debate would lead to unreasonable acts such as the obsession of some U.S. politicians in pressing for a drasticappreciation of the renminbi, or domestic resistance to any appreciation of the Chinese currency,” Xinhua wrote. “In both cases, there will be a ‘lose-lose’ situation for both nations.”
· A Syrian government minister describes the rocket attack on a military research facility as a "declaration of war" by Israel, and vows to retaliate The Swiss National Bank’s currency cap remains necessary, and the central bank won’t exclude taking further steps should the crisis in the euro area intensify, SNB Vice President Jean-Pierre Danthine said. We find ourselves in a situation in which the franc is still highly valued, and we can’t allow a tightening of monetary conditions,” Danthine said in an interview with the Lucerne-based Zentralschweiz am Sonntag. “It is rather a question whether to be a bit more expansive” · Hong Kong’s economy is at risk of overheating after household debt rose to a record 61 percent of gross domestic product, said Norman Chan, chief executive of the Hong Kong Monetary Authority. “Hong Kong’s consumption and personal-debt growth have consistently outpaced overall economic growth,” Chan told.
With London out on Early May Bank Holliday, gold missed some interest and fell to 147 . The morning session remained quiet and gold found little bids at lunch time sending the market back to 78’s. The metal then started a slow descent that continued once New York opened. The yellow metal printed a low at 1465 and ended the day around 1470. Gold remains stuck in the 1450 – 1480 range for the 7th trading day with still the same target at 1500 but more the days passes more the target will be difficult to breach with a risk to see disappointed investor liquidate their long positions before we can reach it. Draghi reiterated today that ECB was ready to act and was watching data. Silver drifted from 24.25 to 23.85 and recovered with difficulty to 24.00. PGM’s ended the day in a better shape. Platinum that lowered from 1500 to 1490 found good bids late afternoon in
New York and 1500 has been tested again. The brake of it sent the white metal to 1509, however platinum is printing lower highs since two weeks. Palladium traded in a little 7$ range but ended the day at the high.

 

 

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 29th April 2013

It has been an orderly open to the week with most currencies opening pretty much in line with the Friday NY close. Only notable weekend news was that Italy, finally, managed to form a new government. This outcome was priced in to some degree on Friday following a Reuters article quoting ‘Italian sources that Letta might form a govt
as early as Sat.’ http://www.bloomberg.com/news/2013-04- 27/letta-appointed-prime-minister-italy-gets-newgovernment. html The dollar has generally been weaker this
morning with Japanese names buyers of EURJPY and EURUSD. The EUR has traded from 1.3050 to 1.3070 before what appears to be algo names selling which has seen
it trade back to the 1.3050 level in a quick space of time. It is a Japanese public holiday today and is golden week in China which see's them out of the market until Thursday.
There are several other global holidays through the week also which could see some erratic moves and low liquidity.On Thursday BNP Paribas are still looking for a refi cut by
the ECB, a view which their European economists have held for some time. With the cut largely anticipated and priced in the question is whether the ECB is prepared to do or signal more. In their view, it is unlikely that the ECB will move in the direction of policies that would be most damaging to the currency such as cutting the deposit rate to negative or bolstering QE. So a cut in the refi rate will do limited damage to the EUR while other factors are arguing for EUR upside. Gold traded in a fairly wide range on Friday, rallying again towards $1483 in early New York only to be smashed $35 in
an hour to trade sub $1450 then rounding out the day at $1462. The yellow metal rallied a solid 4% last week following the dramatic sell-off the previous week, amidst
extremely strong physical demand. CFTC reports for Comex gold finally revealed the large net spec length reduction of 36.6k lots (almost 30%) for the week from 17th- 23rd April taking total net spec length down to 86k lots, the lowest position since Nov 2008 (lows post GFC were 59.2k lots net long, comprised of a 140k lot long and a 81k short). The week’s decrease in spec length was almost equally driven by shorts increasing: shorts increased by 19.5k lots (to 138.726klots), while length reduced 17k lots (to 224.8klots). Elsewhere, ETF's continue to reduce with a further 350k oz redeemed on Friday taking total holdings to 73.418Moz according to Bloomberg. On the week, the flows in precious were choppy with implied volatilities slightly lower in the front few months but
still trading negatively correlated to spot. In gold, 1m closed the week at 20%, 3m at 128.5% and 6m at 17.5%.The technical charts suggest fading rallies toward $1500 in the short term with further consolidation likely especially considering the number of holiday's around the globe this week. As for the white metals, some short covering lifted
silver up to $24.75 late in the week but could not sustain itself and closed $1/oz off the highs and below $24 at $23.75. The PGM’s saw platinum trade in line with gold but palladium was a noted under-performer as continued position squaring limited the bounce in prices. Gold opened firmer this morning, trading significantly reduced volume when compared to last week. With both Japan out for a holiday today and China out until this Thursday there was little to really push the market. Despite this some Comex short covering was able to push us through $1470 (spot) and probe towards $1472.50. Without the strength of the Asian buying today that level capped us over the course of the day, with spot flopping either side of $1470 into the afternoon. We may see some consolidation this week with the absence of China, who was responsible for the strong moves higher during the Asian sessions last week. We may also see bigger players step in and sell into the tech weakness, taking advantage of the lower liquidity and diminished physical demand. Silver tracked gold closely only trading 4000 lots on Comex (SIN3), whilst the PGM's, platinum in particular opened higher but were sold into. In other markets the HangSeng was flat, ASX200 +0.5% and WTI crude was $0.40
lower at $92.60. A pretty slow night in terms of data with Eurozone business confidence and German CPI, followed by US pending home sales, building permits and Dallas Fed manufacturing. During the London morning session short term option related selling supported Gold while continuing to erase Friday’s fall. $1500/oz is the next target from a technical resistance but with, as said, Chinese holiday, physical demand will be on hold making the way to the target maybe slower. New York came in taking profits from the
highs. Gold then went lower until the PM fix and printed the low just before it settled. ETFs continue their outflows and gold was consolidating later in the afternoon. The US Consumer Spending rose by 0.2% in March, Incomes up 0.2% and the US March Pending Home Sales rising from previous month by 1.5% did not affect significantly gold price. Sliver bounced above 24.00 early mornings of The Asian session and traded in a choppy manner to rise slowly. The grey metal overtook the high after hours thanks to some early Far East bids. Stops in Platinum triggered as the white metal reached 1500. Platinum continued trading up to 1520 and pulling palladium up with it. Palladium reached 700 and will face now the resistance that held almost all of the year 2012.
A break through this level could confirm a new medium term bullish trend with a target at 800.

 

 

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: Friday 3rd May 2013

The ECB was the obvious focal point overnight and the EUR has come under pressure in the wake of the rate cut. The 0.25% reduction in the repo rate was well-anticipated
by the market but the central bank did stop short of the more aggressive measures such as implementing a negative deposit rate. However, in the Q&A period, Draghi noted that
the ECB remains ready to act further if necessary and that he has an “open mind” with respect to potentially moving to a negative deposit rate. He also implied in his comments that some members of the Council may have been prepared for more aggressive easing at this meeting, a possibility that was echoed in an ECB source wire report following the meeting. Some major banks have added another 25bp easing to their forecast profiles, and are now anticipating another repo rate cut in July. The ECB also failed to deliver any notable new financial stability measures which might have mitigated some of the negative impact on the EUR stemming from the loss of yield support. Still, Italian and Spanish bond yields moved lower on the day, with Italian 10-year yields now at new post-2010 lows below 3.8%. EUR was initially buoyed by the announcement however it was the Q&A session that saw it fall back very quickly to trade sub 1.31 and since the London close we have been bouncing around the 1.3060
level. Equities had a more positive session (Dow +0.89%, S&P +0.94%, DAX +0.61%, FTSE +0.15%) and commodities were the best performers with crude leading the charge up a solid 3%. In other data readings, the US trade deficit shrank (-38.8B vs -43.0B previous), Jobless claims reduced to 324k (345k expected, 339k previous) and
regional ISM data rose. AUD retraced some of the earlier losses seen yesterday pre the ECB announcement and perhaps found some support from the better performing equity markets. Next key data ahead is Non Farm Payroll's from the US tonight.
Gold had a solid performance overnight in what was a choppy session for Precious, eventually recouping losses from the previous session. Pre announcement the yellow metal was trading ~$1455 and headed north to a peak of $1473.00 in the aftermath. The greater the incidence of global monetary easing/QE the more support the metal will
garner. Gold looks to be moving into a short term range bound pattern for now with the low bound set at $1440 (May 1 low) and the peak at $1484.70 (61.8% Fibo retracement of the mid April crash). Physical demand remains robust as refineries struggle to curb demand. News HK bullion dealers and jewellers are all but out of bars and
coins was circulating today, but the shortage may ease into next week with fresh deliveries due. This physical demand continues it's tug of war with ETF outflows which remain sizeable. Overnight there was an outflow of nearly 193k oz taking total holdings to 72.746 Moz. In other metals silver struggled above $24.00 overnight with Chinese names repeatedly selling above that level. PGM's marched on higher - Platinum recovering from a slump in Asia yesterday ($1464) to close the day at $1500 and palladium again flirting with $700. It was a very uninspiring start to the day in gold, with the market locked in a $1.50 range for the final 3 hours of NYK trade right through to the SGE open in Asia. The fact it was a public holiday in Japan did not really help matters or spice things up. Decent demand was evident on the SGE with the premium remaining at lofty levels trading around $10-11/oz over spot. The demand, although moderate, was enough to propel gold $7 higher with no visible resistance on Comex to hinder the move. Volumes were light with only 5000 lots (GCM3) trading in the first 5 hours. I think we may see a $1465-1480 range leading up to the US NFP's and unemployment figs, with potential violent price action (as always) possible on the news. A sharp decrease in payrolls will be bullish for gold and vice versa. In other markets the Shanghai composite had a solid day up +1.80%, Hangseng +0.7% and the ASX200 +0.2%. Crude succumbed to a little profit taking after yesterdays rise down 0.3% (WTI $93.72) and the
USD was fairly flat against the majors. Best of luck. Gold continued to trade around 1477 during the London morning session. At lunch time the yellow metal broke up through the resistance at $1480 sending us to 1483.70 initially. More stops triggered then taking us trough 1485 and we printed the high of the day at 1488.10. Almost at this level lies the 61.8% Fibonacci retracement of the 9april fall to 1321.50 on future basis. Selling took now place while pressuring gold and showing that $1500 barrier should not be easy to break. We should keep in mind that a rally to that level could show a short covering rally
above $1500. Gold has been slowly driven lower to 1475 and as New York come in, US data has been realized. The April Non Farm Payrolls rose 165'000 (consensus was at 140’000) and the unemployment rate slipped to 7.5% (consensus was at 7.6%). The effect was immediate and gold slipped by almost 20$ to skim 1456. Here lies the
chart 50% Fibonacci retracement of the 9april fall as the 55 dma at 1451.70. The second fixing started at 1465.5 to end at 1469.25 as the US March Factory Orders fell by 4% and the Ex-transport came down 2% combined to the ISM non-manufacturing employment index at lowest since November. Later Dow Jones Industrial Average climbed to15'000. ECB stated earlier that it was open minded to go into negative territory but wasn’t expecting short-term result Silver fell to 23.40ish before testing the earlier seen 24.40. That level seems difficult to hold for silver and the metal ended the day towards 24.00. PGM’s couldn’t recover after NFP. Platinum printed a high at 1516 but fell to 1485 later and have not been able to cross back 1500. Palladium reached 703 but ended the day below 695.

 

 

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 26th April 2013

Currency traders appear to be anticipating a rate cut from the ECB at their meeting next week which saw the Euro sold off overnight. The Aussie appears to have been caught in the crossfire as it retreats from its highs yesterday. The Euro struggled to get through the key $1.3100 USD level and has since retreated with the growing speculation of interest rates. After the disappointing string of economic data over the past couple of weeks, the conditions set out by the ECB for a further easing in rates have likely been fulfilled. Many economists have now changed their tune from earlier in the year expecting a 25bp cut in the main refinancing rate at the May meeting, but no change to the deposit rate. Goldman Sachs view the potential rate cut as "largely cosmetic",
saying there are few implications for the economy. The ECB still also has room for manoeuvring with its non-standard credit easing measures. Elsewhere, Initial jobless claims fell to 339k (vs consensus 350k) for the week ended April 20, nearing the post-crisis lows seen in early March. The Labor Department noted that there was nothing unusual in the claims data last week and that no states estimated claims, but also stated that they are not yet out of the period of big swings in unadjusted data. The level of claims is now roughly in line with the 4-week moving average seen in mid -March before Easter season volatility led to a temporary spike. The main focus in today’s session however will beregarding the Monetary Policy Statement coming from the Bank of Japan. This is Governor Kuroda’s first such meeting since rolling out the massive monetary stimulus which has resulted in the Yen weakening across the board. It
is anticipated that Kuroda will reiterate that the BOJ still has room to bolster their attempt to weaken the Yen in attemptto stimulate domestic growth. Gold rallies for the first time this week in NYK closing out the session near the highs at $1469, moving through
$1450 despite some sizeable producer offers, to eventually find option related stops on the other side of that figure. Physical demand rolls along with news that further pressure is rearing in India and China. China will be on holiday next Wed/Thu/Fri so this is likely increasing demand to have stock on hand beforehand - similar to Chinese New
Year earlier in the year also adding upward pressure to prices. What I would be a little weary of is when they do go on holiday a significant amount of demand will be pulled from the market and could induce bigger players to step in and sell, without the cushion of SGE/Chinese demand we could swoop lower. For now though we look like
probing towards $1500 after $1450 was taken out. Technically the next major topside target is the 61.8% Fibonacci retracement of the recent sell-off ($1486.90), followed by the psychological $1500 level then the 76.4% Fibonacci retracement at $1525.86. On the downside $1450 will be first support followed by $1430-36 (successive intra-day
highs earlier in the week). This morning opened up in much the same way as yesterday, small profit taking on Ecomex giving way to marginal demand from Tokyo and strong demand from China. Tocom provided enough buying ammunition to push spot through the NYK high at $1469.50 where some light stops were triggered to settle around $1473-74. China came in and swept the market higher swiftly trading through $1480 and moving up to the Fibonacci resistance at $1486.00. We plateaued there trading sideways for around an hour before Comex selling pressure outweighed SGE buying and pushed spot lower to trade back towards $1475. We consolidated there into the
afternoon trading a $1472-75 range into the close. Silver again lurked in the shadows popping higher on the Chinese open then fading into the afternoon. The BOJ release came out later than usual, leading some to speculate on a new policy announcement, but they kept policy unchanged in line with forecast. USDJPY traded poorly since
the release, initially dipping from 99.05 to 98.80, before triggering stops to a 98.22 low (98.70 last); and Nikkei is down -0.6% on the day from unchanged. The BOJ have also just released their inflation forecasts – they see CPI at 1.9% in 2015 and think their 2% target inflation will be achieved in the latter half of the next 3 years; these forecasts come after the actual inflation release earlier today in which national CPI for March was softer at -0.5% (vs -0.4% cons). For gold I would not be surprised to see a pullback towards $1450 today due to the significant open interest at that strike combined with today's expiry. As London came in, offers send the metal back to yesterday’s closing level. Gold then found support at 1460 where it stood quietly until Comex open. There, bids started to appear and the yellow metal went for a second test at the Asian high of 1485. Market couldn’t break the level and a correction plunged the spot price down to 1450 on
a news that Euro Group may decide a next tranche of aid to Greece in May. ETF have been mainly seller along the day unlike physical demand which remained strong. US data came today showing a reinforcement in the American economy, the University of Michigan Confidence rose to 76.4 in all of Apr from 72.3 earlier this month (consensus
was at 73.5). Silver drifted lower the entire morning to bounce a bit below 24.00. The 30$ fall in gold pulled the metal down 80¢. Session closed below 23.90 and 24.00has been retested before Ecomex close. The pressure on the yellow metal erased all the 30$ platinum gained. Profit taking near 1495 did not help either. Palladium remained steady however; apart from a quick roller coaster in the first couple of US trading, the metal
still trades around its 200 dma and a first resistance at 690.

 

 

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.

DAILY REPORT: Thursday 2nd May 2013

Considering most markets were closed overnight for the May Day holidays, there were some reasonable FX and commodity ranges as the Fed kept rates on hold (no surprise
there!). After a quiet start in the European session, the weaker than expected ADP employment figures (119,000 in April versus expectations of 150,000 - whilst the March
result was also revised lower) in the US marked a turning point for the markets with US Treasuries initially rallying and equity markets coming under heavy selling pressure. Later in the session the April US ISM was reported which was in line with expectations at 50.70. The detail of the survey was reasonably positive with new orders rising and
inventories falling. As the markets came to terms with the mixed data there was a 'risk off' mood lingering as the Dow Jones finished the session 138.85 points in the red. Copper prices had their largest one day decline in a year whilst nickel and tin prices entered into 'technical bear markets', as prices registered declines of more than 20% since their recent peak. The decline of the base metal markets triggered AUD selling which saw the AUD/USD currency pair lose more than 100 pips. The recent softening in the global PMI's occurring in Europe, US and China, combined with the second weak monthly US construction number in the last three months does reflect weaker global demand for industrial commodities. As mentioned above, most eyes were fixated on the US Federal Reserve's statement overnight. As expected the FOMC kept its commitment to buy $USD85 billion of assets per month. However there were a few changes to the
statement with activity deemed to be "expanding at a moderate pace, the labor market showing improvement, and inflation running somewhere below the Fed's long-runobjective". The Fed also stated they are "prepared to increases or decrease asset purchases....as the outlook for the labor market or inflation changes". It seems the FOMC inserted this sentence to counter some views that have generated over the past few months that they will taper their asset purchases soon, but also in response to the recent softening of economic data releases in the US, as fiscal austerity programs generate headwinds to economic growth. While the Fed's stance appears symmetric, the recent run of weaker activity data and the subdued inflation readings suggests that the risks are tilted towards the further stimulus. The USD hasremained trading heavily and the EUR is currently just shy of the 1.3200 level ahead of today's ECB rate decision. With a 25bp ref. rate cut now fully priced in, we believe the EUR can continue to gain ground versus the greenback if this scenario is confirmed. Should the ECB surprise the market with additional measure aimed at boosting credit conditions for SME's, the
EUR is likely to continue its push higher on the back of improved risk sentiment. With the return of most of the Asian market, many were expecting a busy day ahead in the precious metals. China has been one of the biggest consumers of gold in the recent sell off, and many were expecting their appetite for the yellow metal to resume on their return from the 5 day holiday. Many market participants positioned themselves on
the long side this morning in anticipation of the Chinese demand, but the flurry of buying didn't occur on the SGE open, and traders were forced to liquidate which in turn saw the market drop $10 in the first couple of hours of trade in Asia. The market dipped under $1450 a number of times, but a lack of any follow through selling and good physical demand prevented any further fall and the market traded in a quiet fashion for the remainder of the afternoon between $1450-1456. Despite silver's $1 (-2.9%) drop from yesterday, it failed to find any demand and traded heavily for the most part. Following last night’s sell off across the commodity sector, the focus seems to be on the downside once again. Support in the gold lies at $1423.02 and $1403.10, the 38% and 50% retracement of the April advance. Resistance lies at $1480.20 ahead of the $1504.33, 62% retracement of the Mar-Apr sell off. Silver is trading just above
support at $23.14, the 62% retracement of the April advance. If this level is breached, $22.62 would be the next key support on the downside (last week’s low), and then the key $22.07 (the April low). The London session was lethargic; gold traded sideways at 1455 the entire morning and its only pre Comex open that the metal started moving. Gold started to see some bids and traded nervously with the ECB decision to lower
benchmark interest rate to 0.50%. New York session started with Initial jobless claims slightly lower but gold price climbed supported by the XAU/EUR as ECB’s Draghi was talking. He said ECB took decisions on ways to enhance credit and said negative deposit rates are technically ready. The Euro currency lost more than one big figure to trade just above 1.3050. Gold quoted in euro gained 23€ up to 1135 which supported the metal in USD and gained 19$ on Draghi’s speech. Silver was already recovering by 30¢ when the ECB made part of its decision and rose by another 40¢ to hit 24.20 after it. The grey metal wasn’t able to handle the level and fell back to 23.80 losing that last 40¢. PGM’s, even if not completely, recovered from yesterday fall. Platinum took a bit less than 30$ and found a resistance at 1500. Impala released some numbers saying gross group refined Platinum production rose by 12% to 1.21 million ounces in the 3rd quarter. Palladium took a little 10$ but bounced lower at 695 to lose then again. Surprisingly XPD managed to end the session at the high of 695.

 

 

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 25th April 2013

Equity markets in Europe managed to gain ground overnight whilst those in the US were flat to firmer as commodities generally put in a better performance. Italian and German
borrowing costs fell to record lows and the 10 year UST yields lost one basis point to less than 1.70%. The move in Europe came despite weaker German business confidence (104.4 vs 106.2 expected) and expectations are now mounting for an ECB cut of 25 bps next week, with a number of analysts shifting their call recently following a
string of softer financial data from core Euro countries like Germany and France. In the US the data was softer with durable good orders for March falling the most in 7 mths to -
5.7% (-3.0% expected, +4.3% revised prior). It was another tug-of-war session for EURUSD, which has struggled to break to either side of 1.2950-1.3050. The best play seems to be buy any dips in EURUSD towards 1.2850 with the reasoning that the improving risk sentiment is the more persistent driver of EUR (over and above yield advantage). USDJPY is trading near 99.50, but the events over the last two days of the week have the potential to trigger the much anticipated break of the 100 level. The latest weekly securities transactions data in Japan (for wk to Apr 19) still is yet to show signs of Japanese investor outflows – there is continued repatriation of JPY 890.4bn (bonds: JPY 862.6bn and stocks: JPY 27.8bn) versus revised JPY490.5bn the week prior) from Japan investors. Nevertheless, the recent announcements from insurance companies (Nippon Life, Meiji Yasuda) suggest longer-term investors are looking to increase their overseas asset allocation - bullish USDJPY. The AUD was eventually able to find some support after the CPI numbers yesterday, reaching a low of 1.0232 and looked as though it was going to break 1.0300 overnight in late London however fell just short. Quiet day here on the cards in Australia due to ANZAC (Veterans) day holiday and no economic data of note. Gold had a better night in NYK moving higher for the first time this week as opposed to erasing gains made in Asia. The weak economic data from the US was the main catalyst, helping gold to probe again above $1430 and closing just above that level in the end. The talk of the town remains the physical onslaught which has all but exhausted global supply of kilobars, small bars and coins and seen premiums in some cases more than double. For now this is nullifying the technical damage done early last week, but $1450 will be a significant barrier in my opinion which is the next major target if we can make a clear break of $1430. Data released yesterday saw showed that Central banks were their most active in nearly 50 years during 2012. The World Gold Council says they added 534.6 metric tons to reserves in 2012, the most since 1964, and expects purchases of 450 to 550 tons this year, valued now at as much as US$25.3 billion. The price slump may not deter them because of how much longer they typically hold assets relative to most investors. According to the IMF in March Russia raised gold reserves for its 6th month, adding 4.7 metric tons in March to 981.6 tons and Kazakhstan added 1.2 t in March to 122.9 tons; a nation which has increased gold holdings every month since Dec 2011. Gold opened in a fairly sleepy fashion this morning, but above $1430 nonetheless. Some early profit taking took us down to the lows but that was about the only time for the rest of the session the metal looked soft. Tocom opened up and were fairly aggressively on the bid, forcing the market through $1430 and the overnight high of $1433.30 and we surged on a small stop run to$1436.00. A bit of two way flow either side of $1435 from a number of different macro, physical and producer names held us there into the Shanghai open. Strong buying was seen from the SGE with the premium having blown out to $15-17 over spot compared to yesterdays $5-$8. Despite this buying interest was comparable to yesterday @ 7 tones in the physical contract trading in the first 90 minutes - the lack of physical supply is definitely squeezing this market. It was enough to sweep us through $1436 and move one direction without looking back to touch $1447 as momentum guys stepped in and weak shorts bailed. Silver stalled a little at first but eventually followed its sibling higher breaking $23.40 and tripping stops up to $23.50 in what was a very illiquid market. As mentioned previously $1450 will be the next big level for gold. Word on the street is that there are sizeable producer offers at that level as well as some solid HF offers which should provide a ceiling for the interim. There is also considerable option open interest at this strike which may make it rather sticky. PGM's performed moderately up about +0.5%. I suspect we will see some London and NYK liquidation at these levels but look to be buying a dip towards $1425-30 for a short term bounce. Gold remained supported by strong physical demand in London. The metal traded above the 1440, resistance
broken during Asia time, and 1450 for most of the day. New York session opened on the bid pushing gold trough the 1450 level. The metal bounced near 1455.80 the 50% Fibonacci retracement of the recent fall. Some selling sent gold lower back to the morning levels. The fixing time supported back the metal and once we fixed at 1451
gold crossed the 50% Fibonacci retracement. Gold settled a moment at that level but the market climbed further going into Comex close. After the session the precious metal went to test 1470 where offers started to appear. Today interesting numbers came from the UK with a GDP that rose by 0.3% the first quarter. in Germany, MERKEL said that higher ECB interest rates would be better for the country while ECB Weidmann rejected the purchases of government bonds via OMT as an intrusion into the independence of the ECB according to the Handelsblatt. That last news had a heavy negative impact on the EUR which lost all what it gained during asia trading hours and further down to EUR1.30 against the USD. Silver struggled to handle 23.40 in the morning but pre New York open saw interests change. Silver jumped to 23.60 and as the American session started and the metal gained another 20¢. 23.80 marked a first resistance on the
climb but bids were strong enough to take the grey metal even higher to $24/oz. That last level held until the market closed but after that silver went to test 24.40 at time of writing. PGM’s saw good interest today too. Platinum rose 30$ today while palladium remained quiet around 675.

 

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.