DAILY REPORT : Friday 18 May 2018

MACRO: The US and China began a second round of trade talks in Washington on Thursday, however President Trump made it clear he does not expect a positive outcome, remarking that China has "become very spoiled". US equities were lower following Trumps comments, the Dow lost 54.95 points, or 0.22%, to 24,713.98, the S&P 500 fell 2.33 points, or 0.09% to 2,723.07, while the Nasdaq shed 15.823 points, or 0.21%, to 7,382.473. There were wins for energy (+1.31%) and industrials (+0.30%) while utilities (-0.90%) and telecoms (-0.56%) led the laggards. European equities were higher, the EuroSTOXX added 2.58 points, or 0.66%, to 395.79, the German DAX put on 118.28 points, or 0.91%, to 13,114.61, and the London FTSE 100 gained 53.77 points, or 0.70%, to 7,787.97. The US dollar index edged higher 0.08% to 93.471, the EUR traded down to 1.1780 while USD/JPY climbed to 110.84. US treasury yields were mixed, the 2 year yield eased 2.04 bps to 2.5647% and the 10 year yield rose 1.67 bps to 3.1131%. Oil prices were higher, Brent rallied 0.30% to $79.52 and WTI firmed 0.13% to $71.58. Base metals were mostly higher, with nickel (+0.83%) leading the gains. In US economic data, the Philly Fed manufacturing index climbed to 34.4 in May from 23.3 in April, the highest reading in 12 months. The Conference Bord's leading economic index rose 0.4% in April from an upwardly revised 0.4% increase in March. Initial jobless claims rose by 11k to 222k in the week ending May 12th, continuing jobless claims fell by 87k to 1.71M. In Asia today, as I write the Nikkei is at +0.37%, the Shanghai composite is at +0.28%, the Hang Seng is at +0.17%, and the ASX S&P 200 is at -0.23%. No significant economic data slated for release tonight.

PRECIOUS: Quiet session for the precious as gold finishes the day where it started once again. Gold opened at $1290 in Asia, the SGE premium was around $8-9 and Chinese buying squeezed the market to the days high $1294. Producer selling above $1292 kept a lid on things gold was eventually sold off as the US dollar took off against the yen. London came in on the offer and sold he metal to a fresh 2018 low of $1284 as the EUR traded below 1.18. The greenback plateaued during NY hours, and the yellow metal was able to grind higher in very quiet trading to finish flat at $1290. Silver proved more resilient, the market held the opening level as gold came under pressure then climbed 19c to a high of $16.48. Palladium saw the most volatility, closing lower at $978 in whippy trade. The Philadelphia gold and silver index lost 0.12%. Very quiet trading in Asia today, gold eased off the $1290 opening level as USD/JPY tested 111. The SGE premium is still around $8-9 and Chinese buying appears to be supporting the market somewhat. The yellow metal is at $1290.00 as I write. Silver has traded a very tight range in Asia, the grey metal is at $16.42 as I write. Very little price action in the PGM's also. Gold remains under pressure with the US dollar still bid, however the market has stabilised over the past two sessions. There are buyers between $1280 and $1285 and below that the next solid technical support is at the December low at $1237. On the upside, expect initial resistance at yesterdays high of $1294 and the $1300 level after that.

 

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.

 

 

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DAILY REPORT : Monday 14 May 2018

MACRO: The import price index in the U.S. increased +0.3% MoM during April (exp: +0.5%) to follow a downwardly revised -0.2% print in March (prev: flat). The headline print was largely driven by the cost of oil (+1.6%), while excluding fuel, prices increased +0.1%. On an annualised basis import prices increased +3.3% (exp: +3.9%) from a downwardly revised +3.3% (prev: +3.6%). The export price index pushed +0.6% MoM higher during April (exp: +0.4%) to follow a +0.3% increase during March, while on an annualised basis prices increased +3.8% YoY from +3.4% previously. The University of Michigan’s measure of consumer sentiment held at 98.8 (exp: 98.3) during May (provisional). The current conditions index eased 1.6 points to 113.3, while the expectations index ticked 1.1 points higher to 89.5. Equity markets in the U.S. ended mostly higher on Friday to see the DJIA to a seventh consecutive session gain, marking the longest winning streak since early November 2017. The DJIA added +0.37% to 24,831.17 points, while the S&P 500 saw strength across telecoms (+2.09%) and healthcare stocks (+1.47%) to end the session +0.17% higher at 2,727.72 points. On a weekly basis the DJIA jumped +2.3% and the S&P 500 booked a +2.4% gain. The Cboe volatility index (VIX) extended its recent decline on Friday, falling for a seventh consecutive session to end -4.38% lower at 12.65. The greenback eased modestly on Friday following the softer than expected U.S. CPI data released on Thursday, seeing the DXY index dip -0.20%. Oil futures ended lower on Friday, however the major benchmarks were able to book a weekly gain following recent uncertainty over supply after the U.S. reinstated sanctions against Iran. WTI ended the session -1.26% lower at USD $70.50 per barrel, while Brent pulled back -0.66% to USD $77 per barrel. Over the week WTI posted a +1.4% gain and Brent jumped around +3%.

PRECIOUS: The precious complex traded mixed on Friday, however was able to consolidate the previous session gains after seeing support from a softer dollar. Asian trade was a generally muted affair as bullion pulled back a few dollars to trade underneath USD $1,320, however gains to the euro once London opened weighed upon the greenback and propelled gold back above the level to a USD $1,325.80 session high in-line with EUR/USD pricing. Late session offers weighed upon the metal in New York, with modest dollar interest taking bullion back underneath USD $1,320 at the close.
Gold price action was relatively robust during Asian trade on Monday, with the metal pushing above USD $1,320 in early session trade and extending to a USD $1,322.10 session high into the Chinese open. The early pricing was well supported by a softer dollar, however the greenback stabilised following the USD/CNY fix and was able to claw back ground throughout the afternoon to restrict any further bullion gains. Geopolitical uncertainty following the U.S. withdrawal from the Iran deal is likely to underpin bullion price action over the near-term, while although the latest CFTC data now shows dollar positioning as net long, expectations are that the greenback has started to pullback from short-term strength as most of the recent short covering has now taken place. Resistance levels for the yellow metal cut in through USD $1,325 toward both the 50 DMA and the 100 DMA sitting just underneath USD $1,328. Silver spent Monday consolidating above USD $16.70 and will target a break of the 200 DMA at USD $16.80 for a further extension toward USD $17, while platinum found interest today to add around +0.50% and is likely to benefit from stricter emissions standards over the medium-term.

 

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 8 May 2018

MACRO: President Trump has announced the U.S. withdrawal from the nuclear agreement with Iran and reimposed economic sanctions that were waived when the deal was signed under President Obama in 2015. The U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA) was at odds with the position of European allies, many of which had tried to dissuade President Trump from leaving the agreement. The economic sanctions would be reimposed following 90-day and 180-day wind down periods and cover industries such as oil, aviation, precious metals and Iranian government purchases of U.S. dollar banknotes.

The latest U.S. JOLTS report showed job opening surged to a record high of 6.55 million during March (exp: 6.10 million). The jobs openings rate increased to 4.2% to also mark an all-time high, while hiring eased to 5.4 million from 5.5 million previously, suggesting a skills mismatch. Equity markets in the U.S. ended little changed on Tuesday following President Trump’s JCPOA announcement, however the major bourses did close strongly after recovering late in trade from intra-session weakness. The DJIA closed in positive territory for a fourth consecutive session, inching +0.01% higher to 24,360.21 points, while declines to seven of eleven sectors of the S&P 500 had the bourse end -0.03% down at 2,671.92. The greenback added further gains against majors on Tuesday, seeing the DXY index +0.41% higher to close above 93.00. The dollar posted notable gains against the greenback to slide underneath 1.19, while USD/JPY was able to consolidate above 109.00 after testing below the figure in Asia. Treasury yields in the U.S. pushed higher amid a sell-off in European bonds, as concerns over a second general election in Italy grow. The benchmark 10-year added around 2bps to 2.968% and the two-year ticked 1.4bps higher to 2.513%, marking the highest level since August 2008. Oil futures saw whippy trade on Tuesday, sold sharply lower into President Trump’s Iran announcement, however able to pare these declines into the close.

PRECIOUS: Bullion saw mixed trade during Asian hours on Wednesday, albeit within a narrow range as the initial risk-off sentiment following President Trump's Iran announcement dissipated and the dollar took a further leg higher. Initial interest around USD $1,315 soon reversed as the greenback tested toward the overnight high, notably against the yen as the pair jumped over +0.5% in early Tokyo trade. Modest Chinese demand held bullion above USD $1,310 as the dollar advance took time out to consolidate, however it wasn't long until gold turned offered once again, falling underneath the level leading into European hours. The yellow metal continues to hold range-bound and is likely to again test the 200 DMA at USD $1,306.20 with a possible extension to the psychological USD $1,300. Top-side resistance stands at USD $1,320 and above this the 100 DMA at USD $1,326.10. All eyes today will be on the U.S. PPI print, while we also see wholesale inventories.

 

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 17 May 2018

MACRO: Industrial production in the U.S. rose +0.7% MoM during April (exp: +0.6%) to follow an upwardly revised +0.7% during March (prev: +0.5%). Manufacturing output, which accounts for more than 70% of industrial production, increased +0.5% and was largely driven by a +2.3% jump in machinery production. Industrial capacity utilisation increased to 78.0% from 77.6% to mark the highest reading since March 2015. Housing starts in the U.S. sunk -3.7% MoM during April (exp: -0.7%) to a seasonally adjusted rate of 1.287 million. Data for March was revised higher to 1.336 million from 1.319 million, while building permits declined -1.8% MoM during April (exp: -2.1%) from an upwardly revised +4.1% increase during March (prev: +2.5%). Equity markets in the U.S. once again advanced on Wednesday, with the small cap index, the Russell 2000 surging +1% to an all-time high of 1,620.64 points as well as a record closing level of 1,616.37 points. The DJIA booked its ninth gain in the past 10 sessions to end +0.25% higher at 24,768.93 points, while materials (+1.15%) led nine of eleven components of the S&P 500 higher to see the bourse end with a +0.41% gain to 2,722.46 points. The greenback strengthened further on Wednesday as the DXY (+0.2%) index touched a 2018 high of 93.63 before easing late in trade. The dollar took the eruo below 1.18, however was little changed against the safe-haven yen. Treasury yields continued to run higher on Wednesday, seeing the 10-year to a seven-year high of 3.093% and the two-year 3.9bps higher to 2.585%.

PRECIOUS: Gold traded underneath USD $1,300 for the second consecutive session on Wednesday, with price action weighed down by further dollar strength and higher U.S. treasury yields. After finding modest support during Asian trade, the metal turned offered into New York hours, dragged lower as the euro slipped underneath 1.18 and U.S. treasury yields traded to a seven-year high. Underlying interest through USD $1,290 saw generally supportive price action throughout the New York session and the metal was able to close above the level to end with a modest decline of -0.2%. A relatively range-bound session for bullion during Asian trade on Thursday, once again tracking dollar movements while seeing interest toward USD $1,290 restrict a further extension toward the New York low print of USD $1,286.20. Headlines out of China regarding tariff concessions on U.S. products weighed upon the greenback around the Chinese open, supporting bullion price action to take the yellow metal to the session high of USD $1,294.10. The bid tone was however short lived as the U.S. 10-year yield broke above 3.11% during afternoon trade, paring gains and taking the yellow metal underneath USD $1,290 leading into European trade. Near-term support for gold sits around USD $1,285.50 and below this USD $1,278, while a break through these levels could see an extension toward USD $1,250. Bulls will be looking toward geopolitical tensions to halt the yellow metal's slide against the rampant greenback, however layered offers from USD $1,295 - $1,300 will be difficult to break through. Data today includes U.S. initial jobless claims, the Philadelphia Fed business outlook, Bloomberg U.S. consumer confidence and the U.S. leading index.

 

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

 

 

 

DAILY REPORT : Friday 11 May 2018

MACRO: US stocks finished higher as the Dow extends it's winning streak to 6 days, the longest since February. The Dow added 196.99 points, or 0.80%, to 24,739.53, the S&P 500 rose 25.28 points, or 0.94% to 2,723.07, while the Nasdaq gained 65.069 points, or 0.89%, to 7,404.975. Telecoms (+1.90), utilities (+1.34%) and tech (+1.28%) led a broad advance in the markets. European equities were mixed, the EuroSTOXX lot 0.47 points, or 0.12%, to 391.97, the German DAX put on 79.81 points, or 0.62%, to 13,022.87, and the London FTSE 100 gained 38.45 points, or 0.50%, to 7,700.97. In the currencies, the US dollar index shed 0.35% to 92.71, the EUR was as high as 1.1942, while USD/JPY traded down to 109.32. US treasury yields were mixed, the 2 year yield rose 0.02 bps to 2.5302% and the 10 year yield eased 4.2 bps to 2.9622%. Oil prices continued to rally, Brent tacked on 0.32% to $77.46 and WTI firmed 0.37% to $71.40. Base metals were mostly lower although copper (+1.57%) bucked the trend. In US economic data, CPI rose 0.2% in April following a 0.1% fall in March, while core CPI gained 0.1% after a 0.2% increased in March. Both figures were below market estimates, which were 0.3% and 0.2% respectively. Initial jobless claims were flat at 211k in the week ending May 5th, continuing claims rose 30k to 1.79 million. The US government reported a record $214 billion surplus in April. The record surplus was largely the result of a sharp increase in individual tax receipts, which were $66 billion higher than in April 2017. In Asia today, as I write the Nikkei is at +0.90%, the Shanghai composite is at -0.11%, the Hang Seng is at +1.26%, and the ASX S&P 200 is at +0.17%. Tonight we have import prices out the US.

PRECIOUS: Positive session for the precious as US CPI comes in below expectations. Gold opened at $1311 and traded a $5 range through Asian hours. The market tested $1310 a couple of times as USD/JPY tried to make a move higher but was rejected on each occasion. Flows were steady with the SGE premium at $6-7. London were buyers at this level, squeezing the market above the Asian highs. The lacklustre CPI figures released in early NY hours sent the yellow metal to the days high of $1322 as investors bought the EUR above 1.19. Gold dipped again as the EUR pulled back but recovered to close near the highs at $1321. Silver took advantage of the weaker greenback to hit a 3 week high $16.75 during NY afternoon trading. PGMs were higher on the back of supply concerns out of South Africa, platinum reached $926 while palladium surged $25 to trade above the $1000 level since April 23. The Philadelphia gold and silver index added 1.74%. SPDR gold trust holdings were unchanged at 862.95 metric tonnes. Very quiet in Asia today with not much price action to speak of. Gold opened at $1321.20 and has traded sideways as the day progresses, the yellow metal is at $1320.10 as I write. Silver is flat at $16.69 as I write and very little happening in the PGM's. Positive signs for gold as it broke out of the recent range with a close above $1320, a consolidation above the the $1326 (100 DMA) resistance could be a catalyst for a move higher. Support wise, we expect a lot of buying interest between the overnight low at $1310 and the 200 DMA at $1306.

 

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 7 May 2018

MACRO: Jobs data out of the U.S. on Friday showed nonfarm payrolls increased by 164,000 during April (exp: 193,000), while the unemployment rate declined to an 18-year low of 3.9% (exp: 4.0%) from 4.1% previously as the participation rate declined to 62.8%. The March payroll figure received an increase of 32,000 to 135,000, however February eased 2,000 to 324,000. The broader 'U-6' measure of unemployment and underemployment, which includes those who have stopped looking and those in part-time jobs who want full-time positions eased to 7.8% from 8.0% previously to mark the lowest level since July 2001. Average hourly earnings ticked just +0.1% higher MoM to hold at +2.6% YoY. Equity markets in the U.S. surged higher on Friday following early weakness, buoyed by gains across the tech sector as Apple spiked +3.92% on reports Berkshire Hathaway had bought 75 million shares in the first quarter. The DJIA ended the session +1.39% higher at 24,262.51 points, while technology (+1.97%) led each of the 11 sectors of the S&P into positive territory as the bourse booked a +1.28% gain to 2,663.42 points. Friday’s gains were not enough however to see the bourses into positive territory on a weekly basis, with both easing around -0.2% over the period. The greenback jumped to nearly its highest level since early January on Friday, notably stronger against the euro following softer than expected data out of the region. The DXY index added +0.22% as EUR/USD tested 1.1900, while the British pound slipped below 1.35 against the dollar, ending the week -1.8% lower.

PRECIOUS: Bullion continued to remain buoyant above the 200 DMA on Friday into the U.S. payrolls data, seeing supportive price action on the back of softer U.S. yields to end the session with a modest gain. Early session demand out of Asia took the metal toward USD $1,315, however the bid tone was soon reversed in London to see gold test underneath USD $1,310. Whippy trade around the payrolls print saw a sharp move higher to USD $1,315.90 on the softer than expected headline figure, however the better than expected unemployment rate sharply reversed the initial move, touching a USD $1,307.90 low before gradually clawing back ground over the remainder of the session. Recent ETF selling coupled with the stronger greenback saw gold nearly -1% lower over the week and whilst holdings continue to remain elevated, we may see further liquidation cap upwards momentum over the near term. Support for the metal may come in the form of geopolitical tensions out of Iran as we move closer to the May 12 deadline, at which point President Trump will decide whether to continue waving sanctions.

Asia opened to a mild bid bias on Monday, triggering an early session stop loss run through New York’s Friday high print after seeing supportive price action from a softening greenback. Weakness across USD/JPY following the BOJ minutes release noting most members see it appropriate to ‘keep easing persistently’ looked to be the catalyst for the dollar decline. The BOJ headlines saw the yellow metal to USD $1,317.50, while initial Chinese interest saw a further extension to the session high of USD $1,319.10 as the on-shore premium in Shanghai edged toward USD $7. Afternoon pricing saw a resurgent greenback pressure bullion lower as USD/JPY recovered toward 109.20 after earlier trading as low as 108.76. The yellow metal pared earlier gains to test underneath opening levels around USD $1,315, however was supported by interest underneath this level to restrict further declines. Price action today will likely be concentrated to U.S. hours as the U.K. takes leave, with support expected broadly from USD $1,315 to the 200 DMA at USD $1,305.80, while resistance cuts in at USD $1,320 and above this the 100 DMA at USD $1,325.20. Data releases today include German factory orders and U.S. consumer credit.

 

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

 

 

DAILY REPORT : Wed 16 May 2018

MARKETS/MACRO: Global markets traded more cautiously overnight as the dollar resumed its upwards climb, helped in part by a resurgent 10y treasury yield, which saw the benchmark rate touch 3.09% - the highest level in seven years. The dollar index hit a year to date high of 93.4, assisted by strong supply of EURUSD in the NY session and a firmer U.S retail sales print. The strength in the dollar was fairly broad based across the G10 space, though the moves were led by the Euro, Aussie and Kiwi, with the latter two continuing to trade fairly heavily. U.S. stocks fell firmly with a lengthy winning streak for the Dow coming to an end as the higher bond yield challenged appetite for equities compared with climbing rates for risk-free bonds. The Dow Jones Industrial Average fell -193.00 points, or -0.78%, to 24,706.41, the S&P500 retreated -18.68 points, or -0.68%, to 2,711.45 and the NASDAQ Composite slumped -75.84 points, or -1.09%, to 6,888.54. The best performing sector was Energy (+0.01%) which just kept its head above water, while the worst performing sector was REITs (-1.70%). Major European indices bounced around wildly throughout the day, managing to close slightly higher, as investors digested a host of economic data and corporate news. The EuroFirst 300 rose +2.20 points, or +0.14% to 1,540.52 and the Euro Stoxx 600 crept up +0.18 of a point (+0.05%) to 392.37. Crude oilprices trod water (WTI +0.06% at $71.00), with rising geopolitical risks and ongoing supply-side issues negating the impact of the stronger USD. Ongoing instability in the Middle East, particularly Gaza, continues to add to the geopolitical risks that have pushed oil higher in recent months. Further, data supplied to OPEC by the Latin American producers showed output sank to 1.50 million b/d, down ~31% YoY. There were also reports that Venezuela has been forced to purchase crude oil on the open market to support key allies, such as Cuba. Adding to these woes, ConocoPhillips is asking the courts to help it recover about USD 2bn of its assets owed by Venezuela’s state-owned oil giant.

U.S data releases were fairly solid yesterday, implying the economy is accelerating in the early stages of Q2. U.S retail trade rose by +0.3% MoM in April 2018, following an upwardly revised +0.8% surge in March and matching market expectations. The increase was mainly driven by higher purchases at gasoline stations, gardening and building material stores, and clothing stores. Ex Auto's, retail sales declined marginally to +0.3% for April, down from an upwardly revised +0.4% and missing expectations of a +0.5% gain. Retail sales Ex auto's and gas was also a touch lower than previous at +0.3% (+0.4% expected, +0.4% prior). Across the Atlantic the data was more mixed. Germany's GDP expanded at +0.3% QoQ (+0.4% expected, +0.6% prior), the slowest pace of expansion since the third quarter of 2016, due to weaker trade and a fall in government spending. The Eurozone's gross domestic product grew by +0.4% on quarter in the three months to March 2018, unrevised from the preliminary estimate and below the +0.7% for the previous period. Among the bloc's largest economies, GDP growth slowed in Germany and France, and was unchanged in Italy and Spain. Compared with the same quarter of the previous year, the Eurozone economy expanded +2.5% (+2.5% expected, +2.5% prior).PRECIOUS: Gold broke down through the important $1300-1305 support zone overnight, with some huge volumes trading through Ecomex (~470k lots GCM8). The market started out very quietly around $1313, with the expectation that Asia would be buyers given the softer price action from the night before. There was some support seen from Asian names throughout the morning, although it was not enough to counter the thick band of offers sitting around $1314-15, which happily absorbed the Asian buying throughout the morning in Asia. The days high was hit during the SGE AM session, although once the lunch break commenced spot gold started to sell-off gradually. The sell-off picked up steam as the USD began to push higher on comments that Turkish President Erodogan was looking at taking more 'responsibilities in FX'. USDTRY in particular took off, although there was a lot of carry over to the G10. Palladium was the first to be impacted dropping through $990 and plunging some $25 in a matter of moments to $964 as stops cascaded. Some 500 lots went through on the initial sweep and then about another 200 or so lots traded as it shot back towards $980. Gold and silver came under pressure around the same time and despite not being as aggressive a move as seen in Pd, the metals continued to slump even though Asian demand picked up. During late London, EURUSD broke down through 1.1900 and the 10y UST rallied from 3.02% to 3.055%, which gave gold the impetus to finally break the $1300 support. Huge volumes were seen churning through the market at this point, as technical selling took hold and stops were triggered. The metal shot below $1295 and never recovered, trading as low as $1288.90 around the same time the 10y hit 3.09%, then holding a $1290-93 range into the close. There is scope for this sell-off to extend lower now, targeting $1386 (61.8% retracement of the Dec 17-Apr 18 rally), while the old support should become immediate resistance around $1298-1302. Silver traded softly again overnight trading as low as $16.205 and we are now within striking distance of a very important support line which has held a number of times since December 2015 (cuts in around $16.04). Elsewhere, ETF's have been modestly increasing holdings over the past week or so, so it will be interesting to see what happens below the key $1300....

Good volumes were seen today in Asia, although price action remained fairly contained for the yellow metal - spec and real money sellers countering Asian physical buying. Gold gradually ticked higher as Asian investors arrived at their desks this morning. It inched up a few dollars prior to the SGE open, although it was clear there was still decent selling across Comex. The SGE opened and the premium on the exchange had not changed too dramatically, up a little at around $8-9 over the loco London price for onshore buyers. Demand on the exchange was good throughout the morning, which helped the spot gold test up as high as $1294.70, but it ran into some solid resting offers there and failed to break through. At time of writing we have kept pushing up against $1295 but have held for now and Chinese demand remains persistent. There has also been strong turnover on ECOMEX with GCM8 currently sitting at 40k lots after 7 hours trade. It will certainly be interesting to see what develops over the next 24 hours for the metals complex.

 

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 10 May 2018

MARKETS/MACRO: The Dow Jones booked a fifth gain in a row Wednesday and the broader stock market rallied as sharp gains in energy, financials and technology stocks propped up the main benchmarks. The Dow Jones Industrial Average gained +182.33 points (+0.75%) to 24,542.54, the S&P500 advanced +25.87 points (+0.97%) to 2,697.79 and the NASDAQ Composite rallied +73.003 points (+1.00%) to 6,893.21. The best performing sector across the park was Energy (+2.03%), while the worst performing sector was Telecom Services (-1.13%). European stocks climbed to a three month high, helped by a rally for energy stocks (BP +3.9%, Shell +3.4%) as oil prices soared. The EuroFirst 300 Index leapt +11.34 points (+0.74%) to 1,539.61 and the Euro Stoxx 600 added +2.44 points (+0.63%) to 392.44. Crude oil prices surged higher (WTI +$2.20, or +3.16% to $71.24), as the market reflected on the decision by President Trump to pull out of the Iran nuclear deal. The re-imposition of sanctions, which were waived under the deal signed in 2015, could see exports reduced by around 300k b/d later this year. Saudi Arabia and others tried to talk down the market, with reports they would step in in support. Energy Minister, Khalid Al-Falih, said that he will be connecting with other OPEC producers over the next few days to ensure market stability. While geopolitical risks dictated price action for oil, data from the U.S was also supportive. The EIA’s weekly report showed U.S inventories fell by ~2.2m barrels last week, which was significantly more than the market had expected. It was driven by a sharp reduction in imports and a rising production, which is now above 10.7 million barrels a day. The firmer oil prices helped to lift U.S treasury yields, with the 10yr now trading with a 3% handle again and treasury break-evens shooting higher as inflation expectations were revised upwards. The U.S 10y yield increased +2.82bps to 3.0042% and the 2y yield rose +2.06bps to 2.5300%. The USD remained rather stable on the day, with the dollar consolidating around the 93 level on the DXY for now.

It was a slow day in terms of data, the only thing of real note being U.S. PPI. Producer price index for final demand edged up +0.1% last month after increasing +0.3% in March. That lowered the YoY increase in the PPI to +2.6% from +3.0% in March. Core PPI had nudged up +0.1% last month also. The data was held back by a moderation in the cost of services such as hotel accommodation and healthcare, which may ease fears that inflation pressures are rapidly building up.PRECIOUS: Gold was under heavy selling pressure during early European trade yesterday, again probing below the 200dma ($1306.25), yet once again stalling and bouncing back. The market opened in Asia yesterday around $1315 and after creeping slowly higher for the first few hours began to fall as the USD picked up steam. USDJPY rocketed from 109.00 to 109.60 in the space of about an hour as some stops went through the market and the gold consequently plunged from $1316 towards $1310 before finding its feet. China were light buyers over the course of the morning with the premium on the SGE hovering around $6-8, similar to the previous day. The gold traded a tight $2 range throughout the afternoon ($1310-12) throughout most of the afternoon, although began to pick up downward momentum as the Greenback had a second wind. The yellow metal swiftly plunged below $1305 and despite constant supply on COMEX, managed to hold above $1304. It was around this time that crude oil began to surge, jumping a sharp $0.75 and gold in sympathy ran back above $1310. With Trump then officially announcing that the U.S would pull out of the Iran deal, crude continued to climb and there was a little safe-haven buying seen for gold. We hit an intra-day high of $1317.15 before falling back off and trading quietly around $1312.50 into the close. Overall, the gold continues to be driven by USD and rates and has held the range well over the past few weeks. Strong support now lies at $1300-1305, while initial resistance sits at $1320, then $1325, while major topside resistance lies between $1355-60. There does appear to be scope for a relief rally here with positioning not overly long, especially if crude oil can continue to push higher thus raise inflationary pressures and making gold a more attractive investment proposition.

The yellow metal opened where we left off in Asia at $1312.50 and traded in a narrow $1 range either side of this for the opening few hours of trade. Just prior to the China open we were trading just off $1311 and there was some light buying seen from them. The premium was a touch lower from yesterday, with onshore traders in China able to buy at an equivalent premium of ~USD $6-7 over the loco London price. This combined with a slightly softer USD helped the gold creep up a few dollars to just above $1315 over the morning and then consolidate between $1314-15 into the early afternoon. The market in terms of price action remained fairly subdued throughout, although COMEX turnover was healthy at around 45k lots (GCM8) for the first 7.5 hours since market open. In other markets USD continues to trade softer vs. the G10 and equities in Asia are firmer, the Nikkei +0.4%, Shanghai Composite +0.2%, Hang Seng +0.75% and ASX200 +0.22%. Crude has continued its push higher, WTI up at $71.64 (+0.55%) and Brent $77.73 (+0.5%) at present and base metals are very slightly lower. Market focus today will be on U.S CPI data, although also look out for jobless claims, BoE rate decision and UK Industrial production.

 

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

DAILY REPORT : Friday 4 May 2018

MARKETS/MACRO:
Nonfarm productivity in the U.S. increased a seasonally adjusted +0.7% (exp: +0.9%) during Q1 2018, while unit labor costs increased +2.7% over the same period. Initial jobless claims inched just 2,000 higher to 211,000 during the week ended April 28 (exp: 225,000), while the four-week moving average declined 7,750 to 221,500 to mark the lowest level since March 1973. Continuing claims fell 77,000 to 1.756 million (exp: 1.835 million) during the week ended April 21. The ISM reported its U.S. non-manufacturing index declined to a four-month low of 56.8 in April (exp: 58.0), with rising labour and production costs reportedly a concern for respondents. Factory orders in the U.S. increased at a faster rate than expected during March, advancing +1.6% (exp: +1.4%) to follow an upwardly revised +1.6% increase (prev: +1.2%) the month prior. A +7.6% increase in orders for transportation goods underpinned the headline print, while ex-transportation orders added +0.3%. The closely watched orders for non-defence capital goods (ex-air) declined -0.4% to follow a -0.1% fall during February. The U.S. trade balance (deficit) shrank -15.2% MoM during March to USD $49.0 billion, marking the largest monthly decline in two-years and the lowest level since September. Equity markets in the U.S. ended mixed on Thursday, however the major bourses were able to recover from sharp early session declines that saw both the S&P 500 and the DJIA trade briefly underneath their respective 200-day moving averages. The DJIA clawed its way back into positive territory late in trade to end +0.02% higher at 23,930.15 points, while the S&P 500 slipped -0.23% to 2,629.73 points, with healthcare (-0.87%) the main laggard. The greenback saw mixed trade on Thursday a day after the Federal Reserve’s policy statement, however ultimately ended the session -0.2% lower

PRECIOUS:
Gold pushed higher on Thursday after seeing support from a softer dollar and falling treasury yields. After testing below the 200 DMA late in New York trade on Wednesday, the metal climbed back above the important support level in early Asian trade and continued to strengthen toward USD $1,310 on the back of early Chinese interest. A divergence from the recent correlation to the Euro saw a short squeeze above USD $1,318 as New York filtered in, however the bid tone was relatively short lived and the metal settled back toward USD $1,310 - $1,312 for the remainder of the session with participants eyeing Friday’s payrolls data.

Bullion price action during Asian trade on Friday was relatively subdued, with the metal seeing support toward USD $1,311 amid modest early session offers. Shanghai interest once again provided a modest bid tone for the metal, extending briefly above USD $1,314, however layered offers sitting broadly between USD $1,315 and the previous session of USD $1,318 restricted any further gains. The greenback skewed toward the downside to underpin bullion’s price action, however flows were tempered somewhat as participants turn focus towards today’s U.S. employment data. Expect todays payrolls data to be the major driver of near-term price action from here, with the 200 DMA at USD $1,305.50 and the psychological USD $1,300 looming as key supports. Any topside extensions will target USD $1,320 initially, while above this 100 DMA (USD $1,324.60) and the 50 DMA (USD $1,328.30) will provide a broad band of resistance.

 

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 15 May 2018

MACRO: Cleveland Fed President Loretta Mester spoke in Paris on Monday, discussing the federal funds pathway and noting that the rate may need to exceed the long run targeted level for a brief period of time in order to maintain policy goals. Mester also commented that she does not expect inflation to pick up sharply, and while close to the Fed’s 2 per cent target, it is likely to take one to two years to reach this on a sustainable basis. Equity markets in the U.S. posted modest gains on Monday, finding direction from an easing of trade tensions between the U.S. and China in lieu of major data releases. The DJIA once again ended higher, marking the eighth consecutive positive session, adding +0.27% to 24,899.41 points. The S&P 500 benefitted from strength across healthcare (+0.65%) and energy (+0.63%) to end +0.09% higher at 2,730.13 points and the Nasdaq crept +0.11% higher to 7,411.32 points. The greenback recovered sharply from early session weakness in New York on Monday, in the process snapping a three-session losing streak as the buck made notable gains against the Euro as political risks continue in Italy. Treasury yields in the U.S. edged higher on Monday as the 10-year test 3% and the two-year added +0.7bps to 2.545%. Oil futures spiked higher on Monday to reverse the majority of Friday’s declines, with gains underpinned by fresh violence in the Middle East. WTI added +0.8% to just over USD $70 per barrel, while Brent crude surged +1.8% to USD $78.50 per barrel.

PRECIOUS: Another soft session for bullion during Asian hours on Tuesday, as the greenback ripped higher and U.S. 10-year yields pushed above 3%. Offers toward USD $1,315 capped any early session gains, and it soon became apparent that bullion would test toward USD $1,310 following the previous session failure to hold USD $1,320 even amid a stronger euro. It's difficult to find a catalyst for the continued dollar strength and conversely bullion weakness, however the trend is currently skewed to the downside and we are likely to once again test toward the lower end of the recent range. Silver's recent inability to consolidate through USD $16.80 has now opened up a test of the recent lower end of the range toward USD $16.00 - 16.20, however much like gold there does not currently look to be any catalysts to push the metal through the level. The major market mover today was palladium, collapsing around -3% with no material news to trigger the decline, however around 500 lots passed though Comex to see the metal print to a USD $962 low.

 

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

 

DAILY REPORT : Wed 9 May 2018

MACRO: President Trump has announced the U.S. withdrawal from the nuclear agreement with Iran and reimposed economic sanctions that were waived when the deal was signed under President Obama in 2015. The U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA) was at odds with the position of European allies, many of which had tried to dissuade President Trump from leaving the agreement. The economic sanctions would be reimposed following 90-day and 180-day wind down periods and cover industries such as oil, aviation, precious metals and Iranian government purchases of U.S. dollar banknotes.

The latest U.S. JOLTS report showed job opening surged to a record high of 6.55 million during March (exp: 6.10 million). The jobs openings rate increased to 4.2% to also mark an all-time high, while hiring eased to 5.4 million from 5.5 million previously, suggesting a skills mismatch. Equity markets in the U.S. ended little changed on Tuesday following President Trump’s JCPOA announcement, however the major bourses did close strongly after recovering late in trade from intra-session weakness. The DJIA closed in positive territory for a fourth consecutive session, inching +0.01% higher to 24,360.21 points, while declines to seven of eleven sectors of the S&P 500 had the bourse end -0.03% down at 2,671.92. The greenback added further gains against majors on Tuesday, seeing the DXY index +0.41% higher to close above 93.00. The dollar posted notable gains against the greenback to slide underneath 1.19, while USD/JPY was able to consolidate above 109.00 after testing below the figure in Asia. Treasury yields in the U.S. pushed higher amid a sell-off in European bonds, as concerns over a second general election in Italy grow. The benchmark 10-year added around 2bps to 2.968% and the two-year ticked 1.4bps higher to 2.513%, marking the highest level since August 2008. Oil futures saw whippy trade on Tuesday, sold sharply lower into President Trump’s Iran announcement, however able to pare these declines into the close.

PRECIOUS: Bullion saw mixed trade during Asian hours on Wednesday, albeit within a narrow range as the initial risk-off sentiment following President Trump's Iran announcement dissipated and the dollar took a further leg higher. Initial interest around USD $1,315 soon reversed as the greenback tested toward the overnight high, notably against the yen as the pair jumped over +0.5% in early Tokyo trade. Modest Chinese demand held bullion above USD $1,310 as the dollar advance took time out to consolidate, however it wasn't long until gold turned offered once again, falling underneath the level leading into European hours. The yellow metal continues to hold range-bound and is likely to again test the 200 DMA at USD $1,306.20 with a possible extension to the psychological USD $1,300. Top-side resistance stands at USD $1,320 and above this the 100 DMA at USD $1,326.10. All eyes today will be on the U.S. PPI print, while we also see wholesale inventories.

 

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 3 May 2018

MACRO: The FOMC left interest rates unchanged overnight, as was widely expected by investors. Commentary from the Fed mentioned that "overall inflation and inflation for items other than food and energy have moved close to 2%" and suggested that it expects inflation to move close to the 2% target over the medium term. Traders were looking to the policy statement for clues as to whether the Fed may add another rate hike this year above the three already planned, however despite the slightly hawkish sentiment the statement offered no firm indication either way. US equities traded higher following the rates announcement, however the three major bourses finished in the red after a late sell-off. The Dow lost 174.07 points, or 0.72%, to 23,924.98, the S&P 500 fell 19.13 points, or 0.72% to 2,635.67, while the Nasdaq shed 29.808 points, or 0.42%, to 7,100.896. Energy (+0.39%) was the lone positive sector as consumer staples (-1.93%), telecoms (-1.76%) and health (-1.41%) weighed on the markets. European equities were higher, the EuroSTOXX rose 2.41 points, or 0.63%, to 387.44, the German DAX put on 190.14 points, or 1.51%, to 12,802.25, and the London FTSE 100 gained 22.84 points, or 0.30%, to 7,543.20. The currencies saw whippy trade following the FOMC announcement, the US dollar index initially dropped 0.38% on the news before rebounding even higher to 92.809, up 0.30% for the day. The EUR traded down to 1.1938 shortly after popping over 1.20, and USD/JPY was as high as 109.98. US treasury yields were mixed, the 2 year yield eased 1.60 bps to 2.4882% and the 10 year yield rose 0.19 bps to 2.9663%. In commodities news, oil prices were mixed as Brent lost 0.08% to $73.07 and WTI added 0.64% to $67.68. Base metals were mostly higher, with aluminium (+2.72%) leading the gains. In US economic data, ADP employment data showed the private sector added 204,000 jobs in April, this follows an increase in March of 228,000 jobs which was downwardly revised from the previously estimated 241,000. This is the sixth consecutive month of job growth above 200,000. In Asia today, as I write the Nikkei is at -0.16%, the Shanghai composite is at 0.62%, the Hang Seng is at -1.16%, and the ASX S&P 200 is at +0.80%. Tonight we have weekly jobless claims, trade deficit, productivity, unit labor costs, Markit services PMI, ISM non-manufacturing index, and factory orders out of the US; and PPI and inflation data out of the Eurozone.

PRECIOUS: Choppy session for the precious ahead of the FOMC rates announcement out of the US. Gold opened at $1304 found a bid early as Asia returned from holidays, with short covering pushing the market to $1311. The SGE premium was around $8-9 which prompted early buying from the Chinese banks which turned into selling later in the day as the premium came off. London came in at $1309 and hovered around that level through the AM session. From the opening bell in NY the greenback was bid as investors anticipated the afternoons FOMC announcement, gold was promptly sold to the days low at $1303. The yellow metal spiked to a session high $1312 on the rates news and quickly came crashing back down to test the $1302 200 DMA once again. Gold finished flat for the day at $1304. Silver had already rallied over 20c before popping up to the high of $16.49, the grey metal closed ahead at $16.35. Palladium was the pick of the PGMs, surging over 3% to a high of $973. The Philadelphia gold and silver index added 0.61%. The SPDR gold trust holdings were unchanged at 866.77 metric tonnes. In Asia today, gold opened at $1305 and traded up to $1310 on broad USD weakness. The SGE premium is around $7-8 over loco London. we are seeing increased selling as the day progresses. The yellow metal is at $1307.70 as I write. Silver traded up to $16.42 and has since eased back to the opening level at $16.40. PGMs are creeping higher. Gold is close to the key 200 DMA technical support at $1304, which is only just above the psychological $1300 level. On the topside, the 100 DMA at $1322 will be the first target.

 

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.