DAILY REPORT : Thursday 12 July 2018

MACRO: US equities broke a four day winning streak after the Trump administration announced tariffs on an additional $200 billion of China exports the previous evening. Wednesday's losses in the stock markets were perhaps smaller than many had anticipated given that a full on trade war with China is becoming more likely. The Dow lost 219.21 points, or 0.88%, to 24,700.45, the S&P 500 fell 19.82 points, or 0.71% to 2,774.02, while the Nasdaq sold off 42.586 points, or 0.55%, to 7,716.611. The markets were driven by losses in energy (-2.15%), materials (-1.69%), and industrials (-1.62%). European equities were lower, the EuroSTOXX shed 4.85 points, or 1.26%, to 381.40, the German DAX slumped 192.72 points, or 1.53%, to 12,417.13, and the London FTSE 100 gave up 100.08 points, or 1.30%, to 7,591.96. Big moves In the currencies as the USD benefits from the increase in trade related tension. The US dollar index firmed 0.60% to 94.724, the EUR was trading as high as 1.175 before tumbling to 1.666, and USD/JPY made a steady climb to 112.11. US treasury yields were mixed, the 2 year yield firmed 0.83 bps to 2.5776% and the 10 year yield remained flat at 2.8491%. Oil prices were hammered as Saudi Arabia increased production by nearly 500,000 barrels per day in June, Brent crashed 6.05% to $74.09 while WTI slid 4.72% to $70.61. Base metals were broadly lower, with copper (-2.96%) leading the losses. In US economic data, the producer price index rose 0.3% in June following a 0.5% increase in April. the 12 month rate of wholesale inflation rose from 3.1% to 3.4%, the highest level since 2011. Wholesale inventories climbed 0.6% in May while sales increased 2.5% in the month. In Asia today, as I write the Nikkei is at +1.29%, the Shanghai composite is at -1.18%, the Hang Seng is at +2.08%, and the ASX S&P 200 is at +1.01%. Tonight we have weekly jobless claims, consumer price index, core CPI, and Federal budget numbers out of the US; and industrial production data out of the Eurozone.

PRECIOUS: A buoyant US dollar sends the precious lower after Trump's China tariff announcement.Gold opened at $1255 in Asia and held within a tight range for the first couple of hours. As SGE opened and the premium fell below $1, onshore selling saw gold testing the $1250 level. The market consolidated here until London came in, choppy trading in the EUR saw gold trade up to $1253 then drop to $1248 in the London AM session. Support for the greenback took off in early NY hours as investors reacted to the strong PPI data and the previous evening's tariff announcement. The yellow metal came under selling pressure as a result, trading steadily lower through the remainder of the session to close at the low of $1241. Silver sold off almost 2% to finish right on the low of $15.74. Platinum gave up $19 to close at the $822 low, while palladium escaped with only a very narrow loss. The Philadelphia gold and silver index slumped 3.06%. In Asia today, trading is relatively subdued after yesterday's sell off, gold has remained within the $1241-44 range. The SGE premium firmed slightly but USD/JPY trading back above 112 is keeping the market in check. The yellow metal is at $1244.10 as I write. Silver printed a fresh 2018 low of $15.73 earlier but has recovered through the afternoon, the grey metal currently sits at the high of $15.86. PGMs are range-bound thus far.

 

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 06 July 2018

MACRO: Few surprises were found in todays release of the minutes from the most recent FOMC meeting. The Fed indicated support for gradual rate increase and noted that interest rates could be around the "neutral" level sometime next year. Solid gains in US equities were led by the tech sector, which had it's best session in over month. The Dow added 181.92 points, or 0.75%, to 24,356.74, the S&P 500 rose 23.39 points, or 0.86% to 2,736.61, while the Nasdaq gained 83.753 points, or 1.12%, to 7,586.426. There were wins for tech (+1.47%), consumer staples (+1.46%) and REITs (+1.36%) while energy (-0.16%) was the lone laggard. European equities were higher, the EuroSTOXX put on 1.54 points, or 0.41%, to 381.59, the German DAX advanced 146.68 points, or 1.19%, to 12,464.29, and the London FTSE 100 rose 30.31 points, or 0.40%, to 7,603.22. In the currencies, the US dollar index slipped 0.13% to 94.409, the EUR was as high as 1.1717, while USD/JPY traded up to 110.68. US treasury yields were mixed, the 2 year yield firmed 2.65 bps to 2.5507% and the 10 year yield remained flat at 2.8309%. Oil prices were lower following an increase in US stockpiles, Brent sold off 0.86% to $77.57, while WTI eased 1.31% to $73.17. Base metals were mixed, with copper (-0.64%) the biggest mover. In US economic data, ADP reported that the private sector added 177k jobs in June, following an upwardly revised 189k increase in May. Initial jobless claims rose by 3k to 231k in the week ending June 30, while continuing claims increased by 32k to 1.74 million. The ISM non-manufacturing index rose to 59.1% in June from 58.6% in May, exceeding economists expectations of a 58.3% reading. The Markit services PMI final reading came in at 56.5 for June, down slightly from the 56.8 reading in May. In Asia today, as I write the Nikkei is at +0.67%, the Shanghai composite is at -1.18%, the Hang Seng is at -0.82%, and the ASX S&P 200 is at +0.67%. Tonight we have non-farm payrolls, unemployment rate, average hourly earnings, and foreign trade in goods/services out of the US; and industrial production figures out of Germany.

PRECIOUS: A more subdued session for the precious as gold remains within the recent range. Gold opened at $1256 in Asia and drifted lower through the day as USD/CNY recovered, the SGE premium was around $1-1.50 which prompted selling out of China. We saw a brief recovery to the opening levels just prior to the London open as the EUR jumped on positive German factory data. The joy was brief, however, as the market was soon testing the overnight low at $1251 during the London AM session. The yellow metal climbed to the days high of $1259 in NY on the back of softer than expected ADP employment figures, before closing out the session slightly in front at $1257. Silver struggled to stay above $16, trading lower during London AM and closing right on the level in NY. PGMs were flat following some big moves earlier in the week. The Philadelphia gold and silver index added 1.02%. In Asia today, gold was under early pressure from a stronger USD and easing SGE premium. The yellow metal was sold to a low of $1252.90, but has recovered to $1255.20 as I write. Silver once again dropped below the $16 level as China came in today, however the grey metal has bounced back and is sitting at $16.01 as I write. PGMs are relatively unchanged from the opening levels.

 

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 02 July 2018

MACRO: Chinese service sector activity picked up modestly during June according to data released on Saturday. The non-manufacturing PMI improved to 55.0 (exp: 54.8) from 54.9 previously, while the manufacturing PMI eased to 51.5 (exp: 51.6) from 51.9 previously. U.S. consumer prices accelerated during May, seeing the Federal Reserve's preferred inflation measure hit the 2% target for the first time in 6 years. Personal consumption expenditures (PCE) improved +0.2% MoM during May (exp: +0.2%) to match April's increase, while on an annualised basis PCE jumped +2.3% YoY (exp: +2.2%) from +2.0% previously. Core PCE (ex food and energy) pushed +0.2% MoM higher during May and +2.0% YoY, the highest print since April 2012. Personal income rose +0.4% MoM (exp: +0.4%) from +0.2% previously. The Chicago PMI index spiked to the highest level in five months during June, printing 64.1 (exp: 60.0) from 62.7. The headline print was underpinned by strength across prices paid, hitting the highest level in seven years, while new orders also firmed. The University of Michigan's consumer confidence index was revised lower during June, sliding to 98.2 (exp: 99.0) from 99.3 previously. Consumer expectations declined from 87.4 to 86.3, while current conditions fell from 117.9 to 116.5. Equity markets in the U.S. ended Q2 on a positive note, as a broad based rally saw the major bourse's close higher. The DJIA added +0.23% to 24,271.41 points, ending the week -1.2% lower, the month -0.6% lower, however gained +0.7% over Q2. The S&P 500 tacked on +0.08% with gains underpinned by energy stocks (+0.65%) leading 8 of eleven components higher. Over the week the bourse declined -1.2%, over the month posted a +0.5% return on the way to a +2.9% Q2 gain. The greenback closed out a strong quarter on a negative note, sliding -0.8% on Friday as majors reclaimed ground against the benchmark. The euro posted notable gains following an agreement between European Union leaders on immigration issues, consolidating back above 1.16 to book a +1% return. Over Q2 the greenback jumped 5.8% to mark the first positive quarterly result since late 2016 as the pound was off -5.9%, the euro fell -5.3% and the yen declined -4.7% over the period.

PRECIOUS: Gold prices traded -3.5% lower during June and collapsed more than -5.5% over Q2, largely in the face of dollar headwinds. The metal struggled to find support on safe-haven appeal as on-going trade tensions continue to trouble investors, while in recent times, calm on the Korean peninsula and softer Chinese currencies have also hurt the metal. Gold was able to close above USD $1,250 on Friday, seeing some respite from a softer USD/China throughout European and U.S. hours after the Chinese currencies battled early offers in Asia. Interest in the yellow metal in Asia was generally limited to mild Chinese physical demand, while bids underneath USD $1,250 across Globex were evident to underpin price action. A leg higher to the euro in London helped support price action through USD $1,250, while New York saw a brief spike through USD $1,255 to mark the session high.

A Hong Kong holiday today saw bullion kick off Q3 in a rather muted fashion, with the metal adding a few dollars in early flows to touch USD $1,254 leading into the Chinese open. Gains to the euro and the yen on Friday were extended in early trade, with the yen notably printing above 111.00. It wasn't long however until the greenback regained the ascendency, pushing USD/China higher and reversing early session gains to majors. The yellow metal broke underneath USD $1,250 in afternoon flows as USD/CNH jumped to a 6.665 high, almost +0.6% on the session. A mild stop loss run through the Friday low saw USD $1,247.90 marked as the session low today. COTR data shows positioning continues to lighten, while ETF outflows have seen holdings condense to just over 70 million ounces, down around -2.3% in June. It will be interesting to see whether the producer selling we have been seeing in recent weeks dissipates now we have finished Q2, possibly freeing up some resistance to top-side moves. Supportive price action is still evident underneath USD $1,250 through to USD $1,246, while below this targets extend to USD $1,236.

A historic day in Mexico as Andres Manuel Lopez Obrador looks to have secured victory in the presidential race. In a landslide result, President-elect Lopez Obrador is estimated to have received over 53% of the vote, more than double of his closest rival. President Trump has already passed on his congratulations via twitter, noting that he "...very much looks forward to working with him." President-elect Lopez Obrador has vowed to stamp out political corruption and drug violence. Data releases today include Markit manufacturing PMI prints from Italy, France, Germany, the Eurozone, the U.K. and the U.S. We also see Eurozone PPI, the Eurozone unemployment rate, U.S. construction spending, U.S. ISM manufacturing and U.S. ISM prices paid.

 

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 11 July 2018

MARKETS/MACRO: Solid data flow and fewer negative trade headlines supported markets yesterday, but the USD did give back some recent gains late in the session. U.S. equities marked a fourth straight finish firmly in the green overnight as Wall Street shifted from consternation over global trade jitters to enthusiasm over upcoming Q2 earnings results following a string of strong economic data that has refreshed optimism. The Dow Jones Industrial Average advanced +143.07 points (+0.58%) to 24,919.66, the S&P500 rallied +9.67 points (+0.35%) to 2,793.84 and the NASDAQ Composite gained +2.99 points (+0.04%) to 7,759.198. The best performing sector on the day was Consumer Staples (+1.25%), while the worst performing sector was Financials ( -0.4%). European equities similarly extended their positive run to a sixth straight session, overlooking trade disputes and focusing on what is hoped to be a positive earnings season. The EuroFirst 300 index tacked on +6.05 points (+0.4%) to 1,513.05 and the EuroStoxx 600 advanced +1.66 points (+0.43%) to 386.25. Regionally the DAX climbed +0.53%, FTSE100 +0.05% and CAC40 +0.67%. In FX, the USD was overall modestly higher on the day as the Dollar Index inched up by +0.1% to 94.14. USDJPY was higher by +0.2% to 111.02 while the EURUSD was a touch lower by -0.1%. In fixed income, the U.S curve flattened with the 10y treasury yield falling by -0.4bp to 2.849% and 2y yield rising +1bp to 2.569%. Meanwhile, the German 10y Bund yield gained +2bp to 0.32%. Crude prices rose again on reports of a fall in U.S oil stockpiles, with inventories falling ~4m barrels last week. With ongoing supply issues in a number of producer countries, as well as the Norwegian oilfield strike, the crude market remains particularly tight at present. Aug WTI rallied +$0.36 (+0.49%) to $74.21 and Sep Brent accelerated +$0.81 (+1.04%) to $78.88 a barrel.

U.S data continues to remain generally positive, with the JOLTS number of job openings falling to 6.638 million in May from an all time high in April, beating market expectations of 6.583 million. Job openings decreased for total private (-228,000) and information (-60,000) and arts, entertainment, and recreation (-27,000) and was little changed for government. In contrast, job openings increased in federal government (+12,000) and mining and logging (+10,000). Meanwhile, the number of hires was little changed at 5.8 million. The National Federation of Independent Business small-business optimism index fell -0.6 points to 107.2 (106.9 expected), a level that is still high by historical standards. The NFIB reported that the percent of owners who reported higher net sales fell 5 points. Across the Atlantic the German ZEW Indicator of Economic Sentiment dropped by -8.6 points from the previous month to -24.7 in July 2018, below market expectations of -18.0. This is the lowest reading since August 2012, due to fears over an escalation of the international trade war. The positive news regarding industrial production, incoming orders and the labour market have been greatly overshadowed by the anticipated negative effects on foreign trade. Since the beginning of the year, expectations have sunk by a considerable -45.1 points. Meanwhile, the assessment of the current economic situation in the country decreased by -8.2 points to 72.4 in July.

The Trump administration released a list of Chinese imports that would be subjected to an additional $200bn of tariffs. Some of the products include consumer goods such as clothing, television components and certain high-tech items. Trump last week said the United States may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of U.S. imports from China last year. The United States began imposing tariffs on $34 billion in Chinese goods at 12:01 am (0401 GMT) on Friday. The new list was released late in NY after U.S stock markets were closed for the day and prompted a surge in the USD against most majors with the exceptions of the safe-haven JPY and CHF.

PRECIOUS: It was a choppy night for the precious complex with all the constituents ultimately ending the day lower. During Asia yesterday gold opened around $1257.50 and with the pullback in USDCNH early on (~2 bigs) to 6.60 area the metal pushed up towards the $1260 resistance level shortly after the Shanghai open. Demand was improved on the SGE as a result of the currency move (CNH and CNY) and the premium shifted out to $5 over the loco London price. Spot gold however stalled around $1260 and despite a number of attempts higher throughout the Asia session was unable to punch through that level. Eventually the USDCNH & USDCNY began to turn which weighed on the metals as European traders stepped in. Gold gradually fell some $5 to $1255, finding some light Chinese demand there, although once the U.S opened up, we broke down through there rather quickly to the lows of the day ($1248.00). Some intra-day short covering however turned the tide and the yellow metal was able to claw back towards $1255, where we oscillated around for the remainder of the day. With around 10 minutes to go in the GLOBEX session, the headline *U.S. IS POISED TO RELEASE $200 BILLION CHINA TARIFF LIST* sent USDCNH surging higher from 6.6320 to 6.6520, although it remarkably had almost no implication for the metals, rounding out the day quietly. Palladium fared the worst of the complex falling some -$20+ on the day, as good liquidation from specs took place with very little support seen. The sell-off built up steam during the European morning and continued until halfway through NY before managing to recoup a couple of dollars before the close. In the end the white metal fell $17 (-1.9%) to close at $943 intra-day.

There was a sharp second leg higher for USDCNH right around the GLOBEX open this morning, taking the pair from 6.65 to 6.69 over the opening two hours of the day. USDJPY also slumped dramatically from 111.25 to 110.80 on the news during the COMEX close giving gold a decent boost right from the onset. We touched the days high at $1256.80 very briefly, before the USDJPY began to claw back gains and weigh on the metal. China also came in as sellers once the SGE opened for trade which dragged spot down towards $1250, before signs of support surfaced. The dollar continued its steady upward momentum throughout the afternoon which kept gold from bouncing back remaining in a tight $1250-53 range. Ahead today on the data calendar we have U.S PPI and wholesale inventories as well as BoC rate decision.

 

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 05 July 2018

MACRO: A relatively quiet session on Wednesday with the U.S. out for Independence Day. Mortgage applications in the U.S. eased -0.5% MoM during the week ended June 29, while applications were off -13.5% compared to the same week a year ago. Equities in the U.S. were closed, however futures eased in-line with weakness across European markets as global trade concerns continued to weigh upon risk appetite. The Stoxx Europe 600 inched +0.06% higher, while the German Dax declined -0.26% as ongoing political disputes continue to create uncertainty around the coalition government. In the U.K. the FTSE 100 fell -0.27% on the back of a stronger pound and concerns over global trade. Some European Central Bank policy makers are concerned that investors aren't pricing an interest rate hike until December 2019, while people familiar with the matter have suggested a move in September or October is on the cards. The news gave the euro a boost, paring earlier session declines to finish relatively flat. The greenback booked a modest -0.02% decline on the session after opening softer in Asia, sliding against the yen and the pound.

PRECIOUS: A positive session for gold on Wednesday, buoyed by dollar declines amid further weakness to USD/China to consolidate Tuesday's gains above USD $1,250. Heavy selling to USD/CNH saw the pair off -0.4% on the session to underpin bullion price action, extending gold through USD $1,260 in early Shanghai hours. Mild offers through USD $1,260 restricted any further top-side gains in Asia, however the yellow metal remained firm throughout the session to once again break above USD $1,260 in early London hours. Activity was relatively muted throughout the European afternoon and with an early close on Comex due to Independence day in the U.S. gold held USD $1,255 to end around +0.3% higher.

Gold saw mixed price action during Asian trade on Thursday, however ultimately ended marginally lower after running into dollar headwinds. The yellow metal saw an early session bid tone reversed as USD/China recovered from opening declines, dragging bullion off the session high print of USD $1,258.10 to test underneath USD $1,255 during the Chinese lunch break. Afternoon Asian trade saw price action underpinned by a leg higher to the euro following stronger than expected German factory orders, supporting bullion back toward USD $1,255. Gold continues to see resistance above USD $1,260 and from a technical perspective will be looking for a close above this figure for a sign of further strength. With pricing still largely determined by dollar flows participants will be focusing on today's FOMC minutes release in addition to private payrolls data leading into Friday's nonfarm payrolls figure. Data today includes U.S. ADP employment, Initial jobless claims, Bloomberg U.S. consumer confidence, Markit U.S. services / composite PMI prints, ISM non-manufacturing composite PMI and the June FOMC meeting minutes.

 

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 29 June 2018

MACRO: US equities pared early losses to finish higher as the financial sector snapped a 13 day losing streak. The Dow added 98.46 points, or 0.41%, to 24,216.05, the S&P 500 rose 16.68 points, or 0.62% to 2,716.31, while the Nasdaq gained 58.598 points, or 0.79%, to 7,503.683. There were wins for telecoms (+2.29%) and tech (+1.08%) while energy (-0.12%) led the laggards. European equities were lower, the EuroSTOXX gave up 3.10 points, or 0.82%, to 376.87, the German DAX slumped 171.38 points, or 1.39%, to 12,177.23, and the London FTSE 100 fell 6.06 points, or 0.08%, to 7,615.63. In the currencies, the US dollar index crept up 0.04% to 95.332, the EUR was as low as 1.1529 before a bounce later in the day, while USD/JPY traded up to 110.63. US treasury yields were higher, the 2 year yield firmed 0.81 bps to 2.5121% and the 10 year yield advanced 1.09 bps to 2.8365%. Oil prices were mixed, Brent rose 0.21% to $77.78 while WTI sold off 0.15% to $73.17. Base metals were mostly lower, with copper (-1.04%) leading the losses. In US economic data, GDP growth for the first quarter of 2018 was revised to a seasonally adjusted annualised rate of 2% from the initial 2.2% estimate. Initial jobless claims rose 9k to 227k in the week ending June 23. Continuing claims fell by 21k to 1.71M. In Asia today, as I write the Nikkei is at -0.34%, the Shanghai composite is at +0.98%, the Hang Seng is at +0.99%, and the ASX S&P 200 is at +0.03%. Tonight we have personal income, consumer spending, core inflation, Chicago PMI, and consumer sentiment out of the US; and inflation data out of the Eurozone.

PRECIOUS: Gold opened at $1251 in Asia and remained between $1251-54 for most of the day with the SGE premium slightly firmer at $3-4. We saw a late dip below $1250 just as London came in, but the metal was back up around $1252 by the time NY opened. The yellow metal drifted lower through the remainder of the session, printing yet another 2018 low, at $1246, in the process. Silver was sold to a session low of $15.92 and closed below the $16 level for the first time since December last year. The PGM's came off as well, platinum and and palladium finished at $844 and $944 respectively. The Philadelphia gold and silver index lost 0.13%. The SPDR Gold Trust sold 0.14% of holdings to 820.51mt. In todays trading, Gold traded around $1246-49 through the morning session with the SGE premium a little lower at $2-3 over loco London. The EUR has surged above 1.16 this afternoon after EU leaders reached a deal on immigration at their summit, this has had a positive effect on the yellow metal which has risen to $1250.80 as I write. Silver has enjoyed a late rise also, the grey metal sits at $16.09 as I write. Gold has come off almost 5% from the June high printed 2 weeks ago, due mostly to broad strength in the US dollar, though there is feeling in some quarters that we may be nearing the bottom of this recent downturn. Support-wise, the metal appears fairly well bid around $1245-48 and their should be support at the December 17 low of $1237 below that. On the upside, expect some initial resistance around $1254 followed by this weeks high of $1272.

 

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 10 July 2018

MACRO: Further turmoil for British Prime Minister Theresa May on Monday, with the shock resignation of Foreign Secretary Boris Johnson. The resignation comes are Prime Minister May appeared late last week to have united warring factions of her cabinet, putting together a roadmap for futures relations between the U.K. and the European Union. Mr Johnson is viewed as a serious threat to May's leadership and could potentially attract the numbers required to mount a leadership challenge.

Equity markets in the U.S. ripped higher overnight to see the DJIA book its best single-session gain in a month, turning positive for the year in the process. The bourse jumped +1.31% to 24,776.59 points, while strength across financial stocks (+2.32%) supported the S&P 500 +0.88% higher to 2,784.17 points and the Nasdaq also gained +0.88% to 7,756.201 points. The greenback pared early session declines to turn positive in New York, seeing the DXY index end around +0.1% higher. The dollar reversed an earlier euro move toward 1.18, while also adding around +0.34% against the yen and +0.42% against the pound. Treasury yields tracked higher in the lead up to a number of bond auctions this week, seeing the 10-year add 3bps to 2.86% gain 2bps to 2.55%. European markets pushed higher on Monday, supported by a softer euro and gains to tech stocks. The Stoxx Europe 600 added +0.58% to 384.59 points, while the German Dax gained +0.38% to 12,543.89 points. In the U.K. the FTSE 100 jumped +0.92% to 7,687.99 points, buoyed by a leg lower to the pound following the resignation of Boris Johnson.

PRECIOUS: A relatively muted session for bullion in Asia on Tuesday, attempting a break of the USD $1,260 pivot point, however offered into London to end the session generally unchanged. Despite Monday's run to USD $1,266, gold disappointingly closed underneath USD $1,260 in New York and we once again find the metal within the recent USD $1,250 - $1,260 range, albeit skewed to the top-side. Interest out of China kept price action buoyant for the majority of the Asian session, bidding the metal to a session high of USD $1,260.10 before offers capped any further top-side gains. Afternoon dollar strength weighed upon the metal to revisit Monday's low print, however supply above USD $1,255 has thus far seen the figure held. Expect dips to remain well supported, initially to USD $1,255, with extension toward USD $1,250, while USD $1,260 remains the key top-side pivot point. The latest COTR shows platinum positioning as of July 3 has turned net short for the first time since November 2001, with gross shorts at an all-time high. This surely opens up room for a short covering rally should the metal remain robust, however with global auto demand for diesel cars sliding the metal is unlikely to find support from this avenue. The white metal hit a USD $857.10 high on Monday and although tempered gains back toward USD $850 has remained well support in Asia today.

 

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 04 July 2018

MARKETS/MACRO: It was a mixed session overnight with lingering concerns over trade tensions somewhat offset by reduced fears over stability of the German coalition government. Chancellor Angela Merkel and the CSU leader Horst Seehorfer managing to reach an agreement on the German migration policy. The Greenback eased from the previous session, the Dollar Index easing back -0.3% to 94.59 with EURUSD slightly higher by +0.2% at 1.1660. USDCNH again went on a roller-coaster ride yesterday, punching to fresh highs shortly after the USDCNY open (6.7332) although subsequently giving up gains into the Asia close and throughout Europe closing the day around 6.6650. U.S. equities closed lower on Tuesday, reversing earlier gains as losses in the Technology and Financials sectors outweighed advances in Energy, Telecoms and Real-Estate shares. Trading volumes were lower than normal because of a shortened session ahead of the Fourth of July holiday on Wednesday. The Dow Jones Industrial Average shrugged off -132.36 points (-0.54%) to 24,174.82, the S&P500 sold off -13.49 points (-0.49%) to 2,713.22 and the NASDAQ Composite slumped -65.013 points (-0.86%) to 7,502.673. European stocks finished higher on the day, led by higher German stocks thanks to Chancellor Merkel steering her coalition government away from immediate collapse over migration. The EuroStoxx 600 index rose +3.06 points (+0.81%) to 379.81 and the EuroFirst 300 added +12.44 points (+0.84%) to 1,487.46. Crude oil prices paired earlier gains as investors become increasingly concerned about rising supply. After AUG18 WTI reached $75.27 midway through the session, prices fell sharply ($72.73 low) after reports that the Saudi Arabian cabinet had affirmed the kingdom’s readiness to use the spare capacity when needed to deal with any futures changes in oil supply (Al Jazeera). The kingdom and Russia also reiterated that they will make adjustments equivalent to an additional 1M b/d under the agreement reached last week. For treasuries, the U.S 10y yield decreased -4.02 bps to 2.831% and the 2y yield fell -2.43 bps to 2.524%.

On the data front, new orders for U.S manufactured goods rose +0.4% MoM in May, following an upwardly revised -0.4% drop in April and easily beating market expectations of 0%. Orders for machinery increased +1.2% and those for motor vehicles rose +0.3%. Meanwhile there were declines in orders for primary metals (-0.3%), fabricated metal products (-1.1%) as well as electrical equipment, appliances and computers and electronic products (-0.2%). The Commerce Dept's report said durable goods orders fell by a revised -0.4% in May following a -1.0% slump in April. Elsewhere, the Australian Central Bank (RBA) remains firmly on the sidelines of the global trend toward higher interest rates, singling out the prospect of a damaging global trade war in its latest interest rate decision. The Reserve Bank board left the official interest rate unchanged at 1.5% for the 23rd month in a row yesterday, staring down calls from some quarters to follow the U.S in returning official rates to higher levels while the economy is growing strongly. The AUD dropped to about 0.7320 on the announcement, almost setting a new 2018 low against the US dollar, but bounced back in afternoon trade.

PRECIOUS: Gold hit fresh lows during the Asia session yesterday ($1238.25), but as the USDCNY pulled back some 5 big figures from the highs, the metal recovered and and closed back through $1250. Gold opened yesterday around $1242 with no real buying into the lead up of the SGE and pressure seen from a much weaker platinum. As has happened the previous days this week, USDCNY gapped higher on the open triggering a broad rally in the USD across a number of asset classes. Gold as a result was pushed to fresh cycle lows just above $1238, with some buying emerging on the approach of the December 2017 low - $1236.50. From there the USDCNY / USDCNH began to sharply turn, trading back through 6.70 respectively and the precious found some underlying demand. USDCNY and USDCNH continued to sell-off into the European morning, helped by the headlines 'PBOC is monitoring FX rates closely' and the precious metals all continued to work their way higher, gold pushing through $1245 and then $1250 around the NY open. The yellow metal continued a steady climb to $1257, before most U.S markets closed early ahead of the Independence day holiday. It then casually flatlined around $1252.50 into the session close. Platinum was a stand out of the day in terms of volatility and turnover (~35,000 lots). Leading on from Monday's rout (~-$35.00 drop), platinum continued to trade heavily Tuesday with strong selling from Japanese and Chinese names. It opened at $818 and traded briefly below $800 with the surge in USDCNY. The metal snapped back sharply from there rallying back an impressive +6.0% to $845 by mid-NY and maintaining $840 into the close. Given the aggressive sell-off over the past few weeks it is no surprise we have seen a bit of a bounce across the complex - it will certainly be interesting to see whether the upward momentum can be maintained into the end of the week.

Gold opened this morning on positive footing and continued to build on yesterdays momentum in early trade. Fast money types were in looking for offers early and the metal ticked up a few dollars as result, pushed along also by a softening USD. When China opened for business USDCNH and USDCNY weakness continued, the former falling from 6.6650 to 6.63 and the latter shedding 2 big figs to 6.6185. Gold ran from $1256 to just north of $1260 quite quickly but did encounter a bit of resistance there. The SGE premium remained fairly stable over the day between $3.50-5.00, despite the currency moves. As I write the USDCNH and USDCNY are looking soft again and gold is pushing back toward $1260. Given the 4th of July holiday in the States, we expect the markets to be illiquid and quiet with the metals to consolidate close to their current levels.

 

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 28 June 2018

MACRO: Durable goods orders in the U.S. declined -0.6% in May (exp: -1.0%) from an upwardly revised -1.0% fall in April (prev: -1.6%). Orders excluding transportation eased -0.3% MoM (exp: +0.5%) from a +1.9% gain previously as orders for motor vehicles and parts sunk -4.2% to mark the largest drop since January 2015. Orders for non-defence capital goods (ex-air), a closely watched proxy for business spending plans, eased -0.2% MoM (exp: +0.5%) to follow a +2.3% gain the month prior. Pending home sales in the U.S. declined during May, sliding -0.5% MoM (exp: +0.5%) to follow a -1.3% fall the month prior. Declines were concentrated in the South (-3.5%), while the Northeast gained+2.0%, the Midwest added +2.9% and the West rose +0.6%. Equity markets in the U.S. traded heavily on Wednesday, driven by sharp declines to technology names and concerns over trade policy. The DJIA shed -0.68% to 24,117.59 points to end underneath its 200 DMA for a third consecutive session. The S&P 500 sunk -0.86% to 2,699.63 points and ended below its 50 DMA as technology stocks (-1.45%) led 8 of eleven of the bourse's components lower. The greenback rallied against majors on Wednesday, seeing the DXY +0.6% higher after headlines indicating President Trump had decided against signing an executive order against Chinese investment in U.S. tech companies. Oil futures ripped higher on Wednesday following a U.S. Energy Information report showing domestic crude supplies fell by 9.9 million barrels for the week ended June 22, the largest weekly decline this year. WTI surged +3.2% to settle at USD $72.76 per barrel, the highest finish for the benchmark since late November 2016. Brent crude ended the session +1.7% higher to USD $77.62 per barrel to mark the highest close since May.

PRECIOUS: Gold continued to trade softly during Asian trade today, however was able to hold above the previous session low print as the greenback held relatively unchanged. A mild early session bid saw bullion through USD $1,254 into the Chinese open, however further weakness to USD/China in early Shanghai trade dragged the metal lower once again, however seeing only modest volumes through Globex to hold the metal within a narrow range. Afternoon price action saw bullion skew marginally to the down-side as the greenback caught a mild bid into the London open, seeing gold touch a USD $1,251.25 low, with good supply evident toward USD $1,250 to restrict further declines. Gold continues to be weighed upon by ETF outflows, with a further 140k ounces registered on Wednesday, while a rampant greenback adds further weight to the price action. Initial support for the metal sits broadly around USD $1,250, while below this the Dec 2017 low of USD $1,236 will become vulnerable. Data releases today include German CPI, U.S. Initial jobless claims, U.S. GDP and U.S. PCE.

 

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

DAILY REPORT : Monday 09 July 2018

MACRO: Relations between the U.S. and North Korea look to have taken a hit over the weekend, with North Korean officials labelling U.S. Secretary of State Mike Pompeo's negotiation tactics as 'gangster-like' following two days of talks in Pyongyang. Pompeo said in Tokyo on Sunday after meeting with Japanese and South Korean counterparts that although there is still a lot of work to do, he is confident North Korea would stick to it's commitment to abandon their nuclear program.

June jobs data out of the U.S. showed the economy continued to strengthen, adding a further 213k payrolls (exp: 195k) to follow an upwardly revised 244k in May (prev: 223k), while April also saw an upwards revision to 175k (prev: 159k). The unemployment rate meanwhile inched up to 4.0% (exp: 3.8%) from 3.8% previously as the participation rate increased to 62.9% (exp: 62.7%) from 62.7% previously. 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 increased to 7.8% from 7.6% previously. Average hourly earnings added +0.2% MoM (exp: +0.3%) to hold at +2.7% YoY, while average hours worked per week held at 34.5. Equities in the U.S. booked solid gains on Friday following the robust jobs figures, with participants casting aside global trade concerns for now. The DJIA ended the session +0.41% higher at 24,456.48 points, seeing the bourse +0.8% higher for the week. The S&P 500 rallied +0.85% to 2,759.82 points as all 11 components finished in positive territory, helping the bourse to a +1.5% weekly gain. The Nadaq outpaced to end the session +1.34% higher at 7,688.39 points, a +2.4% return on the week. The greenback tracked lower on Friday as participants considered the jobs data in conjunction with the recent FOMC minutes release and continued global trade concerns. The DXY index ended the session off -0.45%, notably declining against the euro (EUR/USD +0.4%) and the yen (USD/JPY -0.2%).

PRECIOUS: An attempted outside session by bullion on Monday, as the greenback continued its recent decline and participants considered the weekend North Korean news. Gold found footing around USD $1,255 in early session flows, edging modestly higher leading into the Chinese open, however further gains were somewhat stifled by a softer pound following the resignation of Brexit Secretary David Davis and deputy Steve Baker. A further extension to the recent USD/China weakness in Shanghai underpinned a test toward the resistance level of USD $1,260, even as the SGE premium continued to hold around USD $3 - $4 relative to London prices. The metal held underneath USD $1,260 throughout the pre-lunch Chinese session as offers capped any further top-side moves, while the euro and the aud pushed higher to add further weight to the dollar decline. Afternoon flows saw gold extend through USD $1,260, however gains were tempered by a firming greenback to see the metal oscillating either side of the key level into London hours. A sustained break of USD $1,260 will bring in further interest and should open up a leg toward $1,280, however if the metal is unable to capture the figure we will once again see bullion with the USD $1,250 - $1,260 range. Platinum was the major mover during Asian trade today, taking out the recent resistance level around USD $847 to add +1.4% on the session.

 

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

 

 

 

DAILY REPORT : Tuesday 03 July 2018

MACRO: U.S. equity markets reversed early declines amid lighter than usual volumes on Monday, largely supported by a bounce in technology stocks. The DJIA added +0.15% to 24,307.18 points, while the S&P 500 gained +0.31% to 2,726.71 points as gains to technology stocks (+0.99%) helped to overcome weakness across energy (-1.55%). The Nasdaq Composite jumped +0.76% to 7,567.687 points, buoyed by gains to large-cap tech companies such as Micron Technology (+3.89%) and Nvidia Corp (+2.25%). The June U.S. ISM manufacturing PMI ripped higher to 60.2 (exp: 58.5) from 58.7 previously, with gains led by supplier deliveries and production indices. IHS Markit reported U.S. manufacturing growth in the U.S. remained strong during June, however expanded at a slower rate than seen in May. The manufacturing PMI was revised upwards to 55.4 (exp: 54.6) from a flash read of 54.6, down from 56.4 in May as new orders increased at the softest rate since November 2017. The Commerce Department reported construction spending in the U.S. increased +0.4% during May (exp: +0.5%) from a downwardly revised +0.9% increase in April (prev: +1.8%). The greenback strengthened further on Monday to see the DXY end +0.27% higher, notably higher against the Mexican peso follow the weekend election results.

PRECIOUS: Gold continued to extend recent dollar driven weakness in Asia on Tuesday, unable to hold support around USD $1,240 and breaking through the New York low print. Once again USD/China weighed upon bullion, with notably USD/CNH surging +0.7% higher in early Shanghai trade to drag gold lower. A brief stop loss run through the previous session low saw the metal test a break under USD $1,238, edging ever closer to the December 2017 low of USD $1,236. An afternoon relief rally courtesy of a reversal to USD/China and USD/JPY back above 111.00 saw gold regain USD $1,240, however it's difficult to say for how long. Gold ETF outflows continue to create headwinds for the metal, seeing a further 300,000 ounces wiped away from holdings overnight, while the dollar rally so far shows no sign of abating. The key for the metal is undoubtedly support at USD $1,236, while resistance cuts in through USD $1,245 - $1,250. Following Monday's collapse of nearly -4%, platinum continued to see volatile price action during Asian trade today. The white metal drifted lower throughout today's Asian session, with declines accelerating through USD $810 to see the metal briefly test support at USD $800. The afternoon dollar reversal provided some respite for the metal, tracking back above USD $810 into London hours. Data releases today include Eurozone PPI, Eurozone retail sales, U.S. factory orders and U.S. durable goods/capital goods.

 

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 27 June 2018

MARKETS/MACRO: Despite trade tension continuing to simmer yesterday, risk sentiment in general managed to improve. U.S. stocks closed slightly higher as energy shares rebounded from steep losses in the previous session. The Dow Jones Industrial Average tacked on +30.31 points (+0.12%) to 24,283.11, the S&P500 advanced +5.99 points (+0.22%) to 2,723.06 and the NASDAQ Composite closed up +29.26 points (+0.39%) at 7,561.627. Energy stocks were the leading sector intra-day (+1.40%), while the worst performing sector was Consumer Staples (-0.45%). European equities managed to stabilise after selling off the past few sessions on trade war concerns. The EuroFirst 300 index edged up +1.29 points (+0.09%) to 1,474.48 and the EuroStoxx 600 was fairly flat up +0.08 of a point (+0.02%) to 377.25. Crude oil prices surged yesterday on reports that the U.S was pressuring allies to halt purchases of Iranian oil, WTI rallying +$2.60 (+3.8%) to $70.68 - the highest level in a month. After the U.S pulled out of the Iran nuclear deal, there had been much speculation as to whether this would actually mean less Iranian oil hitting the market. However, the U.S is now putting political pressure on consumers to end purchases, while also warning that it doesn’t want to offer any extensions or waivers to any sanctions. This comes at a time when other supply disruptions are emerging. Uncertainty about Libya intensified after a militia leader handed over control of certain ports to a rival of the state oil company. Yesterday’s news about operations at Syncryde, Canada’s oil sands complex in Alberta, is also weighing on the market. This has seen the Brent premium to WTI shrink from ~USD 10.00/bbl last week to only ~USD 6.00/bbl currently. In FX, much attention continues to be focused on $China which continues to push towards the key 6.60 handle (both CNH and CNY pushing through this morning). Both pairs have already rallied more than 20 big figures just in the last few weeks and look set to continue. According to Commerzbank they are starting to see equity funds put on forward hedges against further RMB weakness while recent inbound equity inflows look increasingly at risk of turning negative. Elsewhere, the U.S 10y yield decreased -0.37bps to 2.876% and the 2y yield fell -0.42bps to 2.529%.

The back and forth between the U.S and other trading partners continued overnight. President Trump took to Twitter taking aim at one of the country’s beacons of American manufacturing, Harley-Davidson. This quote sums it up: "A Harley-Davidson should never be built in another country-never! Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!". While it certainly plays to those in the U.S manufacturing sector, rural communities dependent on agriculture are starting to hurt with a number of soft commodity prices tumbling, especially those where there is an existing oversupply situation. The escalating situation has prompted more than 60 companies and organisations representing American dairy farmers and processors to urge the administration to reconsider its imposition of new tariffs on Mexico, as it is their largest and most reliable export market. In retaliation for US actions on steel and aluminium imports, Mexico recently added new tariffs – some of which will reach as high as 25% next month – on some American-made edible goods, amongst other products. Time will tell of the outcome, but such shifting alliances will be important for dairy and other commodity markets. China also mentioned yesterday it will remove import tariffs on animal feed ingredients including soybeans, soymeal and rapeseed from five Asian countries, a sign Beijing is seeking alternative supplies of the commodities as opposed to the U.S. China will drop tariffs on soybeans, soymeal, soybean cake, rapeseed and fishmeal originating from Bangladesh, India, Laos, South Korea and Sri Lanka from July 1. Even though the government had planned the tariff cuts since March, the cuts indicate that China is taking steps to reduce its dependence on U.S. agricultural products amid the mounting trade dispute between the two countries. Soybeans are China's biggest agricultural import from the United States by value.

PRECIOUS: Gold extended its leg lower yesterday on the back of a rising USD and continued tech selling following last weeks 'death cross' on the daily chart. The yellow metal opened in Asia yesterday and remained fairly flat, rallying in fact to the daily highs just after the Shanghai open. The stronger USDCNH and USDCNY dented the premium on the SGE some $4 however, which drew out some sizeable selling clips from Chinese names. The move lower for spot gold during Asia was fairly steady, falling to $1263 and then hovering around that level up until European traders walked in. The buying in the dollar remained robust, and gold which has shown good negative correlation to the USD was sold off further. Initially it was swept lower to $1258 and then back up to $1260. Decent liquidation was seen on the bounce however and the metal continued onto the lows of the day ($1255.20) as NY opened for trade. The leaping broader commodities base (particularly crude and base metals), allowed some respite in the sell-off, gold managing to scramble back toward $1262. It did not last though, with hedge funds and leveraged supply taking us back to $1257 and eventually closing around $1258.50. Next support sits around $1245-50 area and we see resistance at around $1270-75 in the short term. What is of slight concern is that last time we saw a 'death cross' on a daily chart for gold (Nov 2016), the metal subsequently dropped ~12%. Further we are seeing continued selling in ETF's and we are heading for the weakest month in a year in terms of outflows, as market players cover their losses. The (possible) shining light in the near term is that the trade war will completely erupt, which should be bullish for gold. It so-far has failed to ignite any safe-haven demand, however if tariffs and protectionism continues to mount, one would think it would have to bolster gold's appeal.

It was another weak session today, with USDCNH and USDCNY breaking through tech resistance at 6.60 and trading strongly throughout the day. Gold kicked off the session around $1258.50 and traded between $1257-1259 leading into the China open. In what was a similar set-up to yesterday, as soon as USDCNY fixed it shot some 3 big figures higher, pressuring the spot gold price. The SGE premium was also lower again ($3.50-4.50 over LL), which drew out further selling from Chinese participants and whacked spot gold in the aftermath of the CNY fix. We traded swiftly down to the o/n lows at $1255.20 and eventually pushing through. There was some bids seen on Ecomex ($1253-55 cash equivalent), which steadied the decline however. Some Chinese demand also chimed in when the USD showed signs of easing and stabilising. That being said, it was still a soft session and it will be interesting to see where we head today. Gold has fallen some -3.3% since the start of the month, and once we see quarter end push through we may see a little more demand surface, particularly if the USD slows.

 

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.