DAILY REPORT : Friday 25 Aug 2017

MACRO: Investor focus is on the central banks annual symposium in Jackson Hole, Wyoming, starting on Friday. Fed Chair Janet Yellen and the head of the ECB Mario Draghi will both be addressing the conference, and though no major policy announcements are expected, investors will be listening closely for any hawkish/dovish commentary by the pair. US equities were lower in fairly volatile trading common to this time of year as volumes remain low. The Dow lost 28.69 points, or -0.13%, to 21,783.40, the S&P 500 fell 5.07 points, or 0.21%, to 2,438.97, and the Nasdaq slipped 7.08 points, or 0.11%. to 6,271.326. Healthcare (+0.28%) was the only sector to put up any kind of resistance as consumer staples (-1.34%) and industrials (-0.39%) led an almost broad decline. European shares were higher, the EuroSTOXX rose 0.59 points, or 0.16%, to 374.51, the German DAX edged higher 6.53 or 0.05%, to 12,180.83, the London FTSE 100 increased by 24.41 points, or 0.33%, to 7,407.06. In the currency markets, the US dollar index firmed 0.15% to 93.289, the EUR traded down to 1.1785, while USD/JPY traded up to 109.57. US treasury yields were higher, the 2 year yield rose 2.46 bps to 1.3297%, while the 10-year yield gained 2.79 bps to 2.1939%. In commodities news, oil markets were lower Thursday with Brent losing 0.82% to $52.14 and WTI declining 1.71% to $47.59. Oil prices may receive a boost over the coming days as Hurricane Harvey intensifies in the Gulf of Mexico. The storm is expected to make landfall in Texas late Friday night, supply interruptions are expected as many refiners are already running at reduced rates and some may shut down production completely. Base metals were broadly higher, with copper (+1.87%) the big mover. In US economic data, high demand and lean supply continue to characterise the housing market as existing home sales fell 1.3% to a seasonally adjusted annual rate of 5.44M in July, the lowest rate since August last year according to the National Association of Realtors. Inventory was 9% lower than a year ago and at the current sales pace it would take 4.2 months to exhaust the available supply. Initial jobless claims rose by 2k to a seasonally adjusted 234k in the week ending August 19, continuing jobless claims remained unchanged at 1.95M. The Kansas City Fed manufacturing activity index climbed to 16 in August from 10 in July. In Asia today, as I write the Nikkei sits at +0.57%, the Shanghai composite is at +1.38%, the Hang Seng at +0.83%, and the ASX S&P 200 at +0.05%. All eyes on Jackson Hole for the central bank symposium, we also have durable goods orders and core capital goods orders out of the US; and GDP growth, import prices, and IFO business climate/conditions out of Germany.

PRECIOUS: A very quiet day for the precious as investors remain idle ahead of Friday's meeting in Jackson Hole. Gold opened at $1290 in Asia but couldn't hold above the level, the market dropped a few dollars as the $5 SGE premium led to some light selling out of China. The US dollar started to firm against the yen following the previous nights dip below 109, which also kept the pressure on. We saw a little bounce late in the day before a fall on the London open, the days low of $1284 was printed during the AM session. NY featured whippy trade in light volume before the yellow metal finished the day at $1286. Silver opened at $17.08 and was on the offer early in Asia, reaching as low as $16.85 during the morning in London. The grey metal bounced back from here but couldn't climb back above $17, finishing the NY session at $16.93. PGMs traded a very tight range, platinum and both palladium both closing all but flat. The Philadelphia gold and silver index added 0.56%. The SPDR gold trust holdings were unchanged at 799.29 metric tons. As expected the markets seem to be offering more of the same today as investors sit on their hands ahead of tonight's meeting. Gold is trading very tight $2 range between $1285-87, and the SGE premium was slightly higher at around $5-6 over loco London. The yellow metal is at $1286.70 as I write. Silver is trading sideways, the grey metal is sitting at $16.97 as I write. No action in the PGMs either. Gold looks very well supported ahead of $1280, with the $1283-85 level tested a few times this week and still holding. The weeks high of $1293 would be first target on the upside, followed by the psychological $1300 level.

 

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 21 Aug 2017

MACRO: The University of Michigan's gauge of consumer sentiment (preliminary) outpaced expectations during August, increasing to 97.6 (exp: 94.0) from an eight-month low of 93.4 in July. The headline print was supported by a strong gain to the expectations component, increasing to 89.0 from 80.5 previously, while the measure of current conditions lagged at 111.0 from 113.4 previously. U.S. equity markets ended lower on Friday, turning into the red late in trade after enduring a mixed session. The major driver on Friday seemed to be the announcement that chief strategist Steven Bannon would be leaving the White House, seeing markets turn higher following a soft open, however reversing theses gains into the close. The DJIA posted a -0.35% decline to end at 21,674.51 points, logging a second consecutive weekly decline and the largest two-week percentage decline in nearly 12-months. Weakness across realestate (-0.75%) and telecoms (-0.54%) led the S&P 500 -0.18% lower for a -0.7% weekly result, while the Nasdaq composite eased -0.09% for the session and -0.6% over the week. Oil futures ripped higher in New York on Friday following unconfirmed reports of a shutdown at Exxon Mobil's Bayton, Texas refinery (the second largest in the U.S.). After soft early U.S. session pricing, WTI turned sharply higher to end the session with a +3% gain around USD $48.50 per barrel, while Brent crude added rallied +3.3% to USD $52.70 per barrel. European markets ended lower on Friday as leisure and travel stocks booked declines following the terrorist incident in Spain. The Stoxx Europe 600 handed back -0.71% to trim its weekly gain to +0.6%, while the German Dax ended -0.31% lower and the U.K. FTSE 100 sunk -0.86%.

PRECIOUS: Volatility was the name of the game on Friday for bullion, briefly trading above USD $1,300 before being unceremoniously dumped in New York as weak positioning bailed on the metal. A range-bound Asian session gave way to a leg higher in early European trade, with light stops triggered above USD $1,290 to see the metal test toward the recent double top resistance at USD $1,296 (April & June highs). The upward momentum continued into New York to see a break above USD $1,300, however the bid tone was soon extinguished as seller's wrestled back control. Looking at the recent increase in long positioning it is likely that the false break of USD $1,300 spooked short-term investors to compound the late session weakness and have gold closing almost USD $20 off the high print. Gold trended higher during Asian trade on Monday, however had to overcome some early session weakness as the metal battled against a stronger USD. A modest pick-up in demand out of China provided a underlying level of support once Shanghai opened, with participants happy to sit on the bid around USD $1,285, a level that provided support during last week's run higher. Uncertainty leading into Jackson Hole may lead to some short-term support for bullion, with both ECB President Draghi and Federal Reserve Chair Yellen scheduled to speak on Friday. In addition, the joint military exercises to be undertaken between the U.S. and South Korea is likely to see a risk premium attached to the metal over the first part of the week. Pricing continues to remain constructive for a further test of USD $1,300, while any corrective moves through USD $1,280 - $1,285 has the potential to extend toward USD $1,265. Data releases today are light, with the Chicago Fed activity index the main print.

 

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 Aug 2017

MACRO: With a lack of economic data for direction on Monday, investors instead turned focus to developments on the Korean Peninsula and comments out of the Federal Reserve. New York Federal Reserve President William Dudley expects to raise interest rates once more this year according to comments made on Monday in an interview with the Associated Press. Dudley noted that it is dependant upon "how the economy evolves", however should it continue in line with expectations he would be in favor of "doing another rate hike later this year." U.S. Secretary of Defence Jim Mattis and Secretary of State Rex Tillerson wrote in the Wall Street Journal on Sunday that the Trump administration was seeking diplomatic solutions to achieve 'irreversible denuclearization' of North Korea. The easing of tensions between the U.S. and North Korea helped support equities higher on Monday, seeing both the S&P 500 and the Nasdaq back above their respective 50-day moving averages. The DJIA added +0.62% to 21,993.71 points and in the process booked 61 straight session without a swing of 1%, the longest such streak in 22 years. The S&P 500 notched a +1% gain to 2,465.84 points as realestate (+1.70%) and technology (+1.60%) led all components aside from energy (-0.27%) higher, while the Nasdaq (+1.34%) outperformed on the back of broad based gains across the technology sector. Oil futures dipped sharply late in trade on Monday following a report from the U.S. Energy Information Administration noting that they expect to see a monthly increase in crude production of 117,000 barrels per day. WTI reversed an earlier break above USD $49 per barrel to close down -2.5% at USD $47.50 per barrel, while Brent crude sunk -2.6% to USD $50.75 per barrel, marking the lowest close since late July. The greenback recovered some of last week's losses on Monday as tensions over North Korea's nuclear ambitions eased somewhat. The DXY dollar index added +0.3% for the session to 93.44, notably seeing EUR/USD below 1.1800, while USD/JPY consolidated around 109.50. Treasuries were sold off on Monday as investors turned back into risk assets. The 10-year yield added around 2.6bps higher to 2.22%, while the 2-year noted gained 2.8bps to 1.322%. European markets turned higher on Monday as investors favoured equities following the weekend de-escalation of tensions on the Korean peninsula. The Stoxx Europe 600 rebounded +1.08% following Friday's near 6-month low closing level, supported in part by a lower euro, while the German Dax gained +1.26%, largely ignoring the Eurozone industrial production print (-0.6% MoM) that showed a decline in output from Germany. Blue chips in the U.K. snapped a three session losing run on Monday as the FTSE 100 added +0.6% after seeing support from the big miners.

PRECIOUS: Bullion traded lower on Monday amid a strengthening greenback, as tensions between the U.S. and North Korea were put on pause for the time being. It was generally one-way traffic for gold to start the week, pulling away from USD $1,290 on the Asian open, before testing support at USD $1,280 in both Europe and the U.S as global equities recovered from last week's decline. Gold ETF's saw a continuation of the recent inflows on Monday, adding a further 196k ounces. The yellow metal continued to see some of it's recent risk premium wiped away during Asian hours today, running into headwinds as regional equities and the USD saw interest following headlines that North Korea is reportedly softening it's stance toward a strike on Guam. Monday's USD $1,280 support gave way in early Asian trade, opening up a sharp stop loss run toward USD $1,272 on the Chinese open, before supportive interest became evident. Afternoon pricing did little to instill confidence in the metal, unable to settle above USD $1,275 and looking likely to test lower into European hours as greenback sees a fresh wave of buying. With bullion pulling away from USD $1,300, the recent increase in long positioning may become strained and open up the potential for weakness to extend toward USD $1,260 and below this USD $1,250. Silver once again recovered from a break below the USD $17 pivot point on Monday, however saw pricing soften during Asian hours today to lose sight of the figure. The recent failed attempts through USD $17.25 and the subsequent weakness in Asia today is likely to weigh upon any recent long additions, with expectations of a test toward USD $16.50 should we see no further flare up of tensions on the Korean peninsula. Platinum has had a soft start to the week after pushing toward USD $1,000 on Friday, sold below USD $970 during New York trade on Monday, with a further extension in Asia today to trade over -3% lower than Friday's closing level. Palladium still sits within reach of USD $900, however failed once again to hold above the figure on Monday. Data today includes German GDP, U.K. CPI / RPI / PPI, U.S. import prices, U.S. retail sales and empire manufacturing.

 

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 24 Aug 2017

MARKETS/MACRO: US President Trump caused a mild risk-off move in markets overnight with his comment that he would shut down the government, if necessary, to secure funding for his signature project - the border wall with Mexico. This is seen as further imperilling Trump’s policy agenda, as well as increasing concern around the more important question of raising the debt ceiling. At his rally, Trump also threw in the comment that the US would 'probably' terminate the North American Free Trade Agreement (NAFTA) 'at some point'. The uncertainty caused U.S equity markets to sag after the previous days ~1.0% run higher. The Dow Jones Industrial Average fell -87.80 points, or -0.40%, to 21,812.09, the S&P500 sold off -8.47 points, or -0.35%, to 2,444.04 and the NASDAQ slumped -19.072 points, or -0.30%, to 6,278.406. The best performing sector were the safe-haven REITs (+1.07%) and the worst performing sector was Industrials (-0.90%). European stocks slumped with investors assessing fresh data on the health of the Eurozone economy and counted down to a key meeting of central bankers at Jackson Hole. The EuroFirst 300 Index declined -7.47 points, or -0.51% to 1,469.13 and the Euro Stoxx 600 index dipped -1.88 points, or -0.50% to 373.92. Regionally the DAX slid -0.45%, the FTSE100 was pretty much flat +0.01% and the CAC40 shrugged off -0.32%. Crude oil prices rose (SEP WTI Crude +$0.56, +1.17%, to US$48.39) after EIA data revealed another big draw down in inventories. Crude oil stockpiles fell -3.33 million barrels to 463.2 million barrels last week according to the body and are now at their lowest level since January 2016. More importantly, gasoline inventories declined -1.22 million barrels to 229.9 million barrels. Choppy price action in FX overnight as the dollar retraced most of yesterday’s gains. USD/JPY remained under pressure with overall volumes light on the day and EURUSD gained support from the firmer than expected regional and group PMI's. There was a fairly aggressive rally in treasuries led by the 10y's as Trump's comments sparked a risk-off move. The US 10y yield decreased -4.36bps to 2.1695% and the 2y yield fell -1.65bps to 1.3051%.

On the data front purchases of newly built single-family homes, a narrow slice of all U.S. home sales, decreased -9.4% (0% expected) to a seasonally adjusted annual rate of 571,000 in July. Overall, the housing market has settled into a pattern of rising prices and flattening sales throughout much of the peak home-buying season. A lack of new-home construction is also dampening both new and existing home sales activity, despite a strong economy. Still in the U.S, Markit said that its flash services PMI rose to 56.9 in August (55.0 expected), from 54.7 a month earlier, marking a 28 month high. On the flip-side however, manufacturing purchasing managers’ index (PMI) dropped to 52.5 in August (53.5 expected) from the prior month’s final reading of 53.3. The composite PMI rose to 56.0 in August from the previous month’s reading of 54.6. Across the pond, the Eurozone economy kept up its growth momentum in August with a strong rise in manufacturing activity offsetting a slowdown in services. The Markit flash manufacturing PMI came in at 57.4, up from 56.5 the previous month and compared with expectations for 56.4. For services, the preliminary PMI was at 54.9 vs 55.4 in July.

PRECIOUS: Gold moved higher overnight in line with the general risk-off move brought about by Trump's comments regarding the U.S debt ceiling and the Mexican Wall. In the lead up, the market was generally fairly quiet into the Shanghai open, with a noticeable lack of liquidity given that HK had been struck by a signal 10 typhoon which had forced most businesses to close. After opening around $1285, there was some light selling in line with a rising USDJPY, which prompted the yellow metal to re-test the overnight lows toward $1283. There were some good bids on Ecomex at that level however which supported the market into the SGE open. Some light buying from Chinese traders helped the spot tick higher a few dollars to return towards the opening levels ($1285). Shortly after, the Trump comments began to hit the wires, speaking in a campaign style rally in Phoenix. He mentioned that they would build the wall even if the government shuts down, he also hinted that the North American Free Trade Agreement could be in jeopardy in the future. The USDJPY immediately sold off some 35 pips and gold got a kick higher towards $1288. The SGE premium also lurched higher to $6-7 over the spot price which drew out some light buying on the exchange. Gold continued to angle higher into the European and NY days as yields and the USD continued to unwind gains from the previous day. The yellow metal touched a peak of $1291.60 early in the U.S day but was met with some liquidation from macro names which capped the price and ultimately took us back below $1290. It was a strong close though, finishing the session back around $1290. Silver and platinum tracked the moves in the dollar fairly closely, both ending the day firmer, silver closing above $17.00 and platinum trying through $980 but closing just beneath.

In the physical space, trade statistics revealed Switzerland was a net importer of gold in July, reflecting subdued global physical demand. Direct shipments from Switzerland to China last month were less than half the volume in June at 18 tons, while in HK the monthly comparison was even more dramatic, down around ~-70% to 15 tons. Shipments into India were down ~-23% on a monthly basis but YoY we are up ~+30%.

In Asia this morning there was a little bit of liquidation seen from retail names in gold and silver which saw both metals ease off their respective opening prices in the early hours. Gold continues to generally trade heavily in Asia towards the top end of the recent range, with good liquidation seen out of both Tokyo and China on rallies into the $1290-1300 zone. This was evident again today once the major futures markets opened for business, TOCOM and the SGE both net sellers. On the SGE the premium was off slightly compared to yesterday sitting at $5-6 over the loco London price for onshore traders. Following the SGE open gold hovered quietly around $1288 throughout the afternoon, ticking over with decent volume traded through Ecomex. Headlines from Jackson Hole (Aug 24-26) should be monitored closely over the coming days, with the various outcomes likely to heavily influence the short-mid term price action in the metals. Gold is at a bit of a crossroads as a sustained move through $1300 will likely draw out models and momentum traders, and see more long term macro players look to play from the long side. A move through $1270-75 on the other hand, will undermine the renewed positive sentiment to gold and silver and we feel that there are a number of weak longs that will look to exit around those levels. Either way, we think the next few days will be pivotal to ascertaining the next directional play.

 

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 18 Aug 2017

MACRO: A van has ploughed into a crowd in the Spanish city of Barcelona, it has been reported there are at least 16 fatalities and dozens more injured. At this stage two men have been arrested and there are reports of another found dead. The Spanish Prime Minister Mariano Rajoy has denounced the incident as a "jihadist attack". In the US, the fallout continues over President Trump's comments regarding the white supremacist violence in Charlottesville on the weekend. Earlier this week Trump was forced to disband both the Manufacturing Council and the Strategy & Policy Forum after several CEOs pulled out. It was reported overnight that Gary Cohn may resign as director of the National Economic Council because of Trump's remarks. Cohn is seen as a business friendly advisor to the President, and talk of his potential resignation has called into question the Administration's future ability to pass any of his proposed pro-business legislation including tax reform. US equities were hammered on the news, the three major bourses all posted daily declines in excess of 1%. The Dow lost 274.14 points, or 1.24%, to 21,750.73, the S&P 500 tumbled 38.10 points, or 1.54%, to 2,430.01, and the Nasdaq dumped 123.19 points, or 1.94%. to 6,221.915. There were no winning sectors in the stock market, as tech (-1.94%), financials (-1.74%) and industrials (-1.71%) lead a broad decline. European shares lost ground in the wake of the attack in Spain and the weaker euro, the EuroSTOXX fell 2.22 points, or 0.59%, to 376.87, the German DAX shed 60.40 or 0.49%, to 12,203.46, the London FTSE 100 declined 45.16, or 0.61%, to 7,387.87. In the currency markets, the US dollar index added 0.56% to 94.003, the EUR traded down to 1.1680, while USD/JPY traded up to 110.24. US treasury yields were lower, the 2 year yield slipped 3.3 bps to 1.30%, the 10-year yield fell 4.9 bps to 2.18%. In commodities news, oil markets were higher as signs emerge crude markets are gradually tightening, Brent firmed 0.9% to $50.86 while WTI rose 0.3% to $46.99. Base metals were broadly lower, with zinc (-2.2%) the biggest loser. In US economic data, industrial production rose 0.2% in July following a 0.4% increase in June. Production in utilities jumped 1.6%, mining output added 0.5%, while manufacturing output declined 0.1% largely stemming from a retreat in auto production of 3.5%. Manufacturing sector capacity fell by 0.1% to 75.4% in June, 3 percentage points below the historical average. The Philly Fed manufacturing index fell to 18.9 in August from 19.5 in July, although a positive reading still indicates activity growth in the region. The Conference Board's leading economic index rose 0.3% in July following a 0.6% jump in June, signalling the potential for faster growth in the back half of this year. Initial jobless claims fell by 12k to a seasonally adjusted 232k in the week ending August 12, the second lowest level since the current period of economic expansion began in 2009. Continuing jobless claims fell by 3M to 1.95M. In Asia today, as I write the Nikkei sits at -1.18%, the Shanghai composite is at -0.05%, the Hang Seng at -0.54%, and the ASX S&P 200 closed at -0.56%. Tonight we have University of Michigan Consumer Sentiment and Advance Services data out of the US; Construction Output and Current Account data out of the Eurozone; and PPI out of Germany.

PRECIOUS: A range-bound but slightly choppy session for the precious as gold consolidates above $1280. Gold tested $1290 in early Asian hours as USD/JPY dipped below 110, however an excess in supply capped the market here with the SGE premium at $3. The yellow metal softened through London's AM session as the greenback firmed sharply against the EUR. Whippy trading through NY hours for the yellow metal as investors took in the Trump news and the Barcelona attack, the market printed the days low of $1282 but ultimately finished around the high at $1287. It was a subdued day for silver, the grey metal drifted steadily down to finish at $16.99. In the PGM's either, platinum finished slightly lower at $972 while palladium good fortunes continued, posting a fresh 16 year high of $927. The Philadelphia gold and silver index lost 0.33%. The SPDR gold trust was unchanged at 795.44 metric tons. In todays trading, gold drifted lower through the AM as the $1-2 SGE premium prompted more selling out of China, though ultimately we are trading sideways. Generally, the current macro-economic conditions are supportive for gold, however the market is waiting for the catalyst to mount a serious test of the $1300 resistance. The yellow metal is at $1287.60 as I write. Silver dipped below the psychological $17 level but has recovered as the day progresses, the grey metal is at $17.02 as I write. Palladium was lower off the open but rebounded up toward last nights highs, while platinum is edging higher at $977.

 

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 14 Aug 2017

MACRO: Consumer prices in the U.S. increased +0.1% MoM during July (exp: +0.2%) to follow a flat read previously. Core CPI, which excludes the volatile food and energy categories also increased +0.1% MoM (exp: +0.2%) from +0.1% previously. On an annualised basis prices ticked higher to +1.7% YoY (exp: +1.8%) from +1.6% previously, while core prices held at +1.7% YoY to print in-line with expectations. A major drag on the headline figure was the lodging cost index, sliding -4.2% in July to mark the biggest one month fall since records began in 1997. Further downwards pressure came from new vehicle prices, declining -0.5% to mark the largest decline since August 2009, while the index of used car prices dipped -0.5% for the seventh consecutive monthly fall. On the positive side for prices, gasoline held unchanged after falling -2.8% during June, food prices increased +0.2% and the price of apparel pushed +0.3% higher following four straight months of declines. Equity markets in the U.S. ended trade on Friday modestly higher following Thursday's sharp declines, with investors weighing up geopolitical concerns against U.S. consumer price data. The DJIA tacked on a modest +0.07% to end the session at 21,858.32 points, however on a weekly basis the bourse sunk -1.1% to book the largest one-week decline in around 9 months. Strength across technology (+0.75%) and healthcare (+0.30%) offset weakness to energy (-0.69%), seeing the S&P 500 +0.13% higher at the close, however unable to stop a -1.4% weekly decline, the worst since March. The Nasdaq meanwhile outperformed to end +0.64% higher on Friday, however also booked a weekly decline, falling -1.5% over the period. Oil futures saw mixed trade on Friday, recovering from weakness in Asia to end modestly higher on the session following a report from Baker Hughes showing showing only a modest increase in active oil rigs. WTI added around +0.5% on the session to see the weekly decline at -1.5%, while Brent crude ticked above USD $52 per barrel for a +0.7% return, however closed the week down around -0.6%. European markets ended generally lower on Friday as investors headed for the exits following a further escalation in tensions between the U.S. and North Korea. The Stoxx Europe 600 was hammered -1.04% to 372.14, booking its weakest close since late February and taking the weekly result to -2.7%. In Germany the Dax held up remarkably well to end flat for the session as CPI data out of Europe's engine room printed in-line with expectations at +0.4% MoM and +1.5% YoY (harmonized). In the U.K. the FTSE 100 also suffered from the global jitters, falling -1.08% on the session to book a -2.7% fall over the week, the worst performance in nearly 4 months.

PRECIOUS: The precious complex endured whippy price action around the U.S. CPI release on Friday, however ultimately ended higher as geopolitical concerns weighed heavily upon the broader market. Gold held support toward USD $1,280 into the U.S. data release, with participants unwilling to instigate fresh positioning ahead of the print. The softer than expected data underpinned further gains to bullion, trading up to a session high of USD $1,292.20, before easing marginally into the close. The latest COTR showed a large increase in positioning, notably added in the second half of the week following the increase in geopolitical tensions as shorts backed off noticeably. Asia kicked off the week with an offered bias, as bullion pulled away from USD $1,290 during early trade before Chinese interest supported the metal above USD $1,285. The on-shore premium in Shanghai continues to trade heavily around USD $5 and acted to restrict declines today, rather than supporting a push higher. Gold once again extended weakness once the far East took lunch, trading nervously around the USD $1,285 support as bids thinned into European hours amid a leg higher to the USD. Gold is zoning in on a number of important technical and psychological levels, notably the recent double top around USD $1,296 and then the all important USD $1,300 level above this. In recent times geopolitical posturing has resulted in only short term strength across precious and should gold fail to break through the aforementioned levels we may see this eventuate once more for a retracement as far as USD $1,250. After withstanding a break below USD $17 on Friday, silver tested the recent high print during Asian hours on Monday, before running into offers above USD $17.20. The grey metal continues to use USD $17 as a pivot point and will need to close above this level to target a break through USD $17.25. With regards to the white metals, the latest COTR data shows a large reduction in platinum short positioning that may free up the metal to extend toward USD $1,000, while palladium once again was unable to consolidate above USD $900 on Friday after a soft U.S. session. Data today includes Eurozone 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 : Wed 23 Aug 2017

MACRO: House prices in the U.S. inched +0.1% MoM higher during June (exp: +0.5%) to see prices +1.6% QoQ higher according to the latest FHFA data. A continued decline in availability saw prices increase +6.6% relative to the same quarter in 2016. U.S. equity markets turned higher on Tuesday amid below average volumes, as investor appetite for technology and healthcare stocks returned. The DJIA jumped +0.90% to 21,899.89 points, booking the largest percentage gain since April 25th as Cisco (+1.92%) and Apple (+1.63%) found support. The S&P 500 saw strength across technology (+1.45%) and materials (+1.20%) lead all components other than real estate (-0.11%) higher, with the bourse ending up +0.99% at 2,452.51 points. The Nasdaq meanwhile snapped a three session losing streak, jumping +1.36% to 6,297.478 points to log the the best single session result since late June. Oil futures pushed modestly higher on Tuesday as investors positioned themselves for an eighth consecutive weekly fall in U.S. domestic crude supplies. WTI increased roughly +0.6% to end around USD $47.65 per barrel, while Brent crude posted a +0.4% return and settled just underneath USD $52 per barrel. The move into stocks saw treasury yields higher on Tuesday, supported in part by reports that the Trump administration had made progress on their tax reforms. The 10-year yield added 3.3bps to around 2.215%, while the two-year popped 2.4bps to 1.326%. Strong performances among resources related stocks underpinned gains to European equities on Tuesday, seeing the Stoxx Europe 600 snap a three session losing streak and end +0.8% higher. The German Dax surged +1.35% even as the latest ZEW survey showed a fall to the expectations index from 17.5 to 10.0, while in the U.K. the FTSE 100 added +0.86% to post its biggest single session percentage gain since mid July as heavyweights BHP (+2.1%) and Antofagasta (+2%) supported the bourse.

PRECIOUS: Gold continued to trade range-bound on Tuesday, however held relatively resilient amid stronger global equity markets and higher UST yields. The majority of Tuesday's price action occurred during late Asian / early European hours, as bullion slipped underneath USD $1,290 on the back of a bid greenback. U.S. hours saw offers cap any further tests toward USD $1,290, while supportive interest underneath USD $1,285 restricted declines. ETF holdings once again increased on Tuesday to add a modest 23k ounces, while in the options space, vols are little changed as 1m sits around 10.6. Asian trade today saw supportive interest underneath USD $1,285 once again restrict declines to bullion, while continued physical interest out of China dragged the yellow metal off the session low as the on-shore premium held toward USD $6 relative to London gold. Once again we are stuck within a narrow trading range and the upcoming Jackson Hole conference is likely keeping investors powder dry for the time being, in addition to the ever present headlines generated out of the Korean peninsula. Pricing continues to remain constructive for a further test of USD $1,300, however should we see corrective moves to the recent bid tone, broad support around USD $1,280 - $1,285 should continue to restrict further declines. Medium-term it is looking like down-side risks to the USD are tempering and we look to the 10-year to hold 2.10% for a push higher for the greenback, potentially weighing upon bullion. Silver continues to oscillate either side of USD $17 and should see top-side moves capped by resistance around USD $17.30, while USD $16.90 continues to broadly support the grey metal. Profit taking in palladium is keeping the metal underneath USD $940 as funds pause for breath following the recent price action, while platinum continues to lose touch with USD $1,000. Data today includes Markit manufacturing / services / composite PMI prints out of France, Germany, the Eurozone and the U.S., while we also see U.S. new home sales.

 

Although the information in this report has been obtained from and is based upon sources 1StopGold believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute 1StopGold' judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation for the 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 Aug 2017

MACRO: The minutes from the July Federal Reserve meeting showed that some committee members are becoming increasingly concerned about the recent soft inflation data, which may temper the pace of future interest rate increases. The central bank's preferred measure of inflation has sunk to 1.5% recently, remaining well below the committee's 2% target for more than five years. The minutes noted that some members believe inflation may remain below the target rate for longer than expected, while several members even indicated that inflation risks may be skewed to the downside. More hawkish members however expressed concern over the risks from a labour market that was sitting at near full employment. With regards to the reduction of the Fed's balance sheet, it was indicated that this process should begin relatively soon, with several members prepared to announce a start date last month. Housing Starts in the U.S. softened unexpectedly during July, falling -4.8% MoM to 1.155 million (exp: +0.4% to 1.22 million), to follow a downwardly revised +7.4% gain during June (prev: +8.3%). Single-family home building dipped -0.5% for the month to 856,000 units, while the volatile multi-family builds collapsed -15.3% to 299,000 units. Building permits sunk -4.1% MoM during July to 1.22 million (exp: -2.0% to 1.25 million) to follow an upwardly revised +9.2% in June (prev: +7.4%). Multi-family permits led the print lower to sink -11.2% MoM, while single-family permits held unchanged.

U.S. equities endured a volatile session on Wednesday, however ultimately ended higher as the DJIA reclaimed the 22,000 point handle. The DJIA navigated a mixture of political turmoil and the Federal Reserve minutes release to book a +0.12% advance, closing at 22,024.87 points for a fourth consecutive win. The S&P 500 saw broad based strength led by materials (+0.92%) to end +0.14% higher at 2,468.11 points, while the tech-laden Nasdaq Composite added +0.19% to 6,345.109 points. Oil prices sunk during U.S. hours on Wednesday following an Energy Information Administration report showing domestic crude production increased by 79,000 barrels per day to 9.502 million barrels per day last week. The figure was the highest level of output since mid July and saw WTI -1.6% lower to around USD $46.80 per barrel, while Brent crude declined -1% to USD $50.30 per barrel. The Greenback pared early session gains in New York on Wednesday following news that the Trump administration had disbanded a pair of business advisory groups, while the dovish Federal Reserve minutes saw the dollar sharply lower into the close. The DXY dollar index declined -0.3% to 93.517 as USD/JPY tested toward 110.00, while the euro recovered from an earlier dip below 117.00 to end around +0.3% higher on the session. U.S. treasury yields were under pressure late in trade following the Federal Reserve minutes release, seeing 10-year yield 4bps lower to 2.224%, while the 2-year eased 2bps to 1.334%.

European markets ended trade on Wednesday higher, supported by a softening euro (pre-FOMC minutes) following a reuters report noting ECB president Mario Draghi is not expected to deliver any new policy messages at the upcoming Jackson Hole conference. The Stoxx Europe 600 jumped +0.68%, supported in part from miners on the back of stronger base metal prices, while the German Dax closed +0.72% higher as the export heavy bourse benefited from a weaker euro. In the U.K. gains to the FTSE 100 (+0.67%) were supported by a softer local currency and strong jobs data. Wages in the U.K. increased +2.1% (exp: +2.0%), jobless claims decreased by -4,200 and the unemployment rate eased to 4.4% from 4.5%.

PRECIOUS: The precious complex saw support from the dovish FOMC minutes on Wednesday, seeing gold recover the previous session declines and end close to +1% higher. Bullion held a narrow range leading into New York hours, testing interest around USD $1,270 as USD/JPY pushed toward 111.00 and treasury yields eased. A sharp reversal in fortunes to the greenback following the FOMC minutes release underpinned a break through USD $1,275, triggering stops to a USD $1,283.70 session high. With regard to vols, we have seen a softening of late to near pre 'fire and fury' levels, with 1m holding a 9 handle, however a touch firmer following the late New York pricing on Wednesday. With regards to fund flows, ETF's added a further 204k ounces overnight and this will need to continue should gold make an attempt at USD $1,300. Asian trade today saw further declines to the USD, seeing USD/JPY below 110.00 and bullion toward USD $1,290 as China opened well bid. Early session interest dissipated somewhat throughout afternoon trade, however we continued to see solid two-way flows into the European open. After failing on multiple occasions, USD $1,296 and USD $1,300 are again within sight and loom as major resistance levels for the yellow metal. Silver posted a staggering +2.9% gain on Wednesday, diverging with gold to turn high pre-FOMC minutes, while the grey metal made light work of USD $17 following the minutes release to importantly close above the figure. Again we look toward the recent resistance level of USD $17.23 (200 DMA) to open up a further leg higher, while another failure here and focus turns to the USD $17 pivot point. Palladium was just shaded by silver on Wednesday as the sessions standout, surging through USD $900 and continuing the bid tone during Asian trade today. The white metal touched USD $929 late in Asian trade on Thursday, testing the June high, however unable to break above this level and easing into the European open. Data releases today include U.K. Retail Sales, Eurozone CPI, U.S. Initial Jobless Claims, U.S. Industrial Production, U.S. Bloomberg 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 Aug 2017

MACRO: US President Donald Trump has doubled down on his "fire and fury" comments toward North Korea earlier in the week. During a press conference overnight Trump said that "if anything, maybe that statement wasn't tough enough" and that North Korea "better get their act together, or they are going to be in trouble like few nations have ever been in trouble". In US economic news, the Labor Department are reporting that the US producer-price index fell 0.1% in July following a 0.1% increase in June. The July figure represents the first drop since August 2016 falls short of the 0.1% bump that economists were expecting. Core PPI was flat for the month. The US federal budget deficit fell to $43bln in July, total receipts were up 10% while spending fell by 15%. The figure represents a sharp fall from the $113bln reported by the Treasury Department for July last year. Initial jobless claims rose 3k to a seasonally adjusted 244k in the week ending August 5. New claims have been below 250k for 10 straight weeks. Continuing jobless claims increased to 1.97M. US equities were hammered as the escalated geopolitical tension spooked investors. The Dow lost 204.69 points, or 0.93%, to 21,844.01, the S&P 500 tumbled 35.81 points, or 1.45%, to 2,438.21, and the Nasdaq dumped 131.20 points, or 2.22%. to 5,788.19. Utilities (+0.25%) saw a modest advance while information technology (-2.18%) took the biggest hit. European equities fared no better as markets were hammered, the EuroSTOXX fell 3.79 points, or 1.00%, to 378.63, the German DAX shed 139.7, or 1.15%, to 12,014.3, the London FTSE 100 declined 108.12, or 1.44%, to 7,389.94. In currency markets, the US dollar index lost 0.19% to 93.366, the EUR traded up to 1.1781, while USD/JPY traded down to 109.18. US treasury yields were affected by the sub-par PPI numbers and the North Korea situation, the 2 year yield slipped 1.21 bps to 1.3266%, the 10-year yield fell 4.48 bps to 2.2028%. In Asia today, as I write the Nikkei sits at -0.05%, the Shanghai composite is at -1.46%, the Hang Seng at -2.04%, and the ASX S&P 200 at -1.40%. Tonight we have CPI out of the US; and inflation data out of Germany.

PRECIOUS: The precious complex saw continued strength as markets turn to risk-off mode on the back of Trumps rhetoric. Gold dipped a little on the open in Asia before the elevated $8 SGE premium prompted light buying out of China which lifted the market to $1278. London were buyers as USD/JPY started to soften. Following NY open, the weak PPI numbers saw investors dump the greenback and the yellow metal climb to a fresh two month high of $1287. Silver surged over 35c off the low to cross $17 for the first time since mid-June. The grey metal has enjoyed a remarkable week thus far, climbing 6% from Monday's open in Asia. Palladium breached the psychological $900 level before take-profit orders capped the market, while platinum saw more modest gains. The Philadelphia gold and silver index added 1.49%. The SPDR Gold Trust holdings were remained unchanged at 786.87 metric tonnes. In todays trading, Gold opened on the bid in Asia and traded quickly to the days high of $1288.40. The SGE premium pulled back to $3 over loco London which sparked a short sell off in China, however the market looks well supported around $1285 as USD/JPY dips below $109. The yellow metal is at $1285.90 as I write. Silver saw a brief spike to yesterdays high before sold lower. The grey metal sits at $17.06 as I write. In the PGMs, palladium made another attempt at $900 and again found resistance, while platinum is flat.

 

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 22 Aug 2017

MACRO: In a light news session, the Chicago Fed national activity index unexpectedly declined during July to -0.01 (exp: +0.10) from an upwardly revised +0.16 (prev: +0.13). Equities in the U.S. ended trade on Monday generally higher in thin conditions, however the Nasdaq composite (-0.05%) was unable to follow the broader market into positive territory. Late session gains helped the DJIA snap a two session losing streak and add +0.13% to 21,703.75 points, while the S&P 500 saw broad based support as real estate (+1.07%) and telecoms (+0.70%) led eight of eleven sectors higher to see the bourse to a +0.12% gain. Oil futures retreated during U.S. hours on Monday, with WTI reversing Friday's gains in their entirety as the OPEC technical Committee meeting scheduled to discuss compliance provided little stimuli. WTI collapsed close to -2.5% and test USD $47 per barrel before settling around $47.40 per barrel, while Brent crude tanked -2% to end around USD $51.65 per barrel. U.S. treasury yields eased marginally on Monday as investors turned focus to the upcoming Jackson Hole central bank conference. The 10-year dipped around 1.2bps to 2.18%, while the two-year yield pulled back 0.4bps to 1.305%. European equities posted declines on Monday as participants considered the recent terrorist activity in the region and heightened tensions on the Korean peninsula. The Stoxx Europe 600 ended the session -0.40% lower to book a third consecutive session decline, however did see some support from shipping heavyweight Maersk (+2.89%), while the German Dax closed -0.82% down as the euro pegged back ground. In the U.K., the FTSE 100 eased just -0.07% as gains to the big miners helped to temper declines amid a risk-off tone courtesy of geopolitical rumblings.

PRECIOUS: Bullion saw solid interest toward USD $1,280 on Monday, turning higher following Friday's late session weakness to once again test resistance around USD $1,296. Gold saw a gradual ascent throughout Monday's session, with Chinese interest initially responsible for the early positive price action, while a leg lower to the greenback leading into U.S. hours provided further support and saw the session high of USD $1,294.35 printed. Gold holdings once again inched higher on Monday, while notably over the course of last week GLD added 12 tonnes to mark the first weekly gain since June. Asian trade today saw gains to the USD weigh upon the precious complex following an early push higher, with USD/JPY reversing course to break back above 109.00. The yellow metal went searching for bids below USD $1,290 on the Shanghai open, however interestingly the Shanghai premium pushed higher toward USD $6 over loco London with a higher level of physical demand evident. The yellow continues to receive support on the back of ongoing geopolitical concerns, while recent gains to base metals and uncertainty surrounding the upcoming Jackson Hole conference underpins the bid tone. Pricing continues to remain constructive for a further test of USD $1,300, with participants sensitive to headlines out of the Korean peninsula as the U.S. and South Korean military undertake joint exercises for the remainder of August. Should we see corrective moves to the recent push toward USD $1,300, broad support around USD $1,280 - $1,285 should restrict further declines. With regards to the white metals, palladium continued to push higher on Monday in-line with the general bid tone across base metals and saw further interest during Asian hours today following the recent break of the June high. Data releases today include German ZEW survey results, U.S. house prices and the Richmond Fed manufacturing 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 : Wed 16 Aug 2017

MARKETS/MACRO: The USD jumped, equities were narrowly mixed and bond yields moved higher in response to stronger-than-expected US July retail sales data (with positive backward revisions too). Other US and European data were also supportive. U.S. stocks were mixed Tuesday as investors scaled back buying after two straight sessions of advances and abatement of tensions between the U.S. and North Korea. The Dow gained +5.28 points, or +0.02%, to 21,998.99, the S&P500 dipped -1.23 points, or -0.05%, to 2,464.61 and the NASDAQ inched down -7.219 points, or -0.11%, to 6,333.013. The best performing sector was utilities (+0.50%), while telco's bought up the rear (-1.0%). European stock indices were encouraged by North Korea's decision to revoke their threat of attack on Guam late in the Asia day (early Europe morning). The FTSE Euro First 300 Index pushed up +1.36 points, or +0.09% to 1,478.98 and the Euro Stoxx 600 added a similar +0.34 of a point (+0.09%) to close at 376.50. Regionally the FTSE100 inclined +0.41%, DAX +0.1% and CAC40 +0.36%. Crude oil reversed early losses to end the day unchanged at $47.61 a barrel (Sep WTI), as investors looked to another large draw-down in inventories in the U.S. Prices were under pressure early after an EIA report forecast US shale oil production would hit a record high in coming months. In particular, it forecast output from the Permian basin would climb another 64,000 b/d to 2.6 million b/d in September. However, increasing optimism about another fall in U.S stockpiles pushed prices higher. Treasuries again sold off today as equity strength, corporate issuance, and strong data were today’s main drivers. The US 10y yield increased +5.26bps to 2.2711% and the 2y yield rose +2.83bps to 1.3465%.

The data out of the U.S. was positive on Tuesday. U.S July retail sales were much stronger than expected, with 10 of the 13 categories growing. The headline figure for July jumped +0.6% (+0.3% expected), the largest gain since December 2016 with June's retail sales also being revised to show a +0.3% gain (-0.2% previously). The July reading was lifted by a +1.2% jump in motor vehicle sales, the biggest rise since December 2016. Other notable increases were a +1.2% increase in receipts at building material stores and online retail sales vaulted +1.3% last month, the largest gain since December. U.S. business inventories recorded their biggest increase in seven months in June as retailers accumulated stock at a brisk pace amid signs of an uptick in domestic demand. The Commerce Department reported business inventories rose +0.5% (+0.4% expected) after a +0.3% increase in May. The New York Fed revealed its Empire State general business conditions index climbed +15.4 points to 25.2 in August (10.0 expected), the highest level in nearly three years. Manufacturers in the region reported a jump in new orders and said they were taking longer to deliver goods. Still in the U.S Sentiment among American home builders unexpectedly increased to a 3 month high as builders saw greater prospects for industry demand despite elevated material costs and shortages of labour and lots. The NAHB Housing Market Index rose from 64 to 68 (64 expected) in August.

PRECIOUS: With geopolitical tensions easing between North Korea and the U.S. Tuesday combined with strong U.S. data and a rising dollar, position unwinding in gold from a number of sources continued to drive the metal below $1280. The market was sold off aggressively during the Asian session on the break of $1280 in Dec gold, the spot price sharply dropping from $1278.50 down toward $1272.50 as fast money stops were tripped right on the SGE open. There was little in the way of support from Chinese traders on the day due to a decent bounce seen in USDCNY, which also has dragged the premium on the exchange down towards $5. USDJPY also traded strongly throughout the session which kept the pressure on the metal, gold managing to recover a few dollars but remain locked between $1275-77. There was a fresh round of selling on the SGE reopen but the metal managed to hold a range of $1273-76 into the NY open. Immediately following the strong retail sales release USDJPY moved up to 110.85 and the 10y yield jumped to 2.28%, forcing further liquidation for the gold down to the daily low of $1268.10. XAUUSD looked vulnerable at these levels testing support at $1268, although the fast money liquidation did dry up. Gold spent the remainder of the session clawing its way back toward $1275, closing at $1272. We suspect a reasonable amount of short term length has been relinquished over the past 24 hours, which given the general improvement in mid-term sentiment, may bode well for a test of $1300 in the near term. Interesting to note that both the USDJPY and U.S. 10y have now returned to their pre 'Fire and Fury' comment levels, while gold sits above these to the tune of about $15-20.

It was a more subdued day in Asia today, with the spec liquidation seemingly cooled for the time being. The gold maintained a fairly stable $1271.50-1274.00 range throughout the day with limited volumes changing hands on Ecomex. We opened around $1272 and there was some very light buying seen from retail names initially which took us a dollar or so higher. Japanese traders were very quiet some light buying if anything seen from them, while the SGE remained largely neutral, maybe still slightly biased to the sell side given the higher USDCNY. The premium on the exchange continues to waver, trading down from $5 yesterday to between $4.00-5.50 today with the volume edging lower throughout the am session. Silver too was quiet today, trading sideways in line with gold after yesterday's sell-off. The white metal fell substantially yesterday trading from $17.07 down to $16.64 (-2.5%) by the close of NY after taking out the $17.00 barrier just last Thursday. This was in the face of a number bullion bank analysts commenting over the past week 'now is the time to go long'. Again the white metal proves that it is a volatile beast. Palladium after some extreme volatility overnight, held fairly steady today around the $890 mark with modest volumes trading on Ecomex and Tocom. In other markets equities are mixed, currently the Nikkei is trading -0.05%, Shanghai Composite -0.35%, Hang Seng +0.6% and ASX200 +0.25%. The USD is flat vs. the majors with the exception of the AUDUSD which is currently up +0.2% to 0.7835 following some leveraged demand. WTI Crude (Sep) is currently up +$0.08 (+0.15%) at $47.78 a barrel. Ahead on the data calendar today look out for UK employment data, Euro Zone GDP and U.S. FOMC meeting minutes, housing starts and building permits.

 

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 Aug 2017

MARKETS/MACRO: Markets continued to trade with a more cautious tone overnight following the comments from US President Trump on North Korea yesterday. Equities traded lower, the Dow Jones trickling off -36.64 points, or -0.17%, to 22,048.70, the S&P500 sold off -0.9 points, or -0.04%, to 2,474.02 and the Nasdaq slumped -18.128 points, or -0.28%, to 6,352.332. The best performing sector was Healthcare (+0.15%) and the worse performing sector was Utilities (-0.5%). Europe was also spooked by the geopolitical tensions between the US and North Korea that escalated post their close yesterday. Investors dumped riskier equities and poured money into safe havens such as bonds and gold. The FTSE Euro First 300 Index dived -11.22 points, or -0.75% to 1,493.88 and the Euro Stoxx 600 gave up -2.81 points, or -0.73% to 379.84. Regionally the DAX shrugged off -1.12%, the FTSE100 -0.59% and CAC40 -1.4%. Crude oil prices pushed higher as US crude oil inventories recorded another strong decline. EIA data showed US stockpiles fell 6.45 million barrels to 475.4 million barrels. However this was tempered by an unexpected rise in gasoline inventories, jumping 3.42 million barrels last week to 231.1 million barrels, sparking fears of weaker demand in the US. The OPEC led group of producers who cut production earlier this year are said to be refocusing on adherence to the original quotas. Sep WTI Crude rallied $0.46, or 0.94%, to US$49.63 a barrel. With the markets in risk-off mode treasuries benefitted with fresh funds flowing in. The U.S. 10y yield decreased -1.43bps to 2.2476% and the 2y yield fell -1.21bps to 1.3387%.

On the data front U.S. non-farm productivity remained sluggish increasing at a +0.9% annualised rate (+0.7% expected) during the April-June period. First-quarter productivity was revised to show it edging up at a +0.1% pace instead of being unchanged as previously reported. Unit labour costs, the price of labour per single unit of output, increased at a +0.6% pace (+1.1%) in the second quarter after jumping to a 5.4% rate in the January-March period. Elsewhere, U.S. wholesale inventories rose +0.7% after an unrevised +0.6% increase in May. Auto inventories rose 1.4% after advancing 0.6% in May. The auto sector is struggling in the face of slowing demand, which has left manufacturers with an inventory glut.

The Fed's Evans said “it would be quite reasonable to announce a balance sheet unwind in September”. He emphasised soft wages and said that an undershoot of 2% inflation target is costlier than an overshoot. Separately, Bullard said the FOMC has been surprised by inflation on the down-side and that the Fed doesn’t need to be pre-emptive.

PRECIOUS: Trump's aggressive "Fire and Fury" comments toward North Korea yesterday continued to resonate with investors as the risk off trade garnered more support. The yellow metal of course was a benefactor of this, continuing to fresh monthly highs at $1279 and managing a daily close above the previous August high of $1274 - a bullish signal. The buying began in Asia yesterday with short term specs initially driving the price higher. Tocom and Chinese traders jumped on board also and helped spot push through $1265 where it did a little work throughout the afternoon. Turnover was decent through Comex Dec gold and the SGE, with the lower USDCNY helping to bump the latters premium up through $7. China had been sellers following the initial wave of buying which kept things fairly steady throughout the morning. As the afternoon came around the China selling had dried up, which prompted spot to have another leg higher towards $1270, but there was good macro and producer supply waiting up around there throughout the European day. The U.S open attracted more buying and we sharply rallied through $1270 where some sizeable stops were tripped through to $1275. Some work was done between $1270-75, before there was another leg higher into the close. On the final move there once again appeared to be good supply around the $1280 strike. Silver continues to get dragged around but it certainly had a bid tone, putting in a lot of time and absorbing good offers between $16.75/$16.80 (futures) before extending higher. Some of the banks reported enquiries for silver upside options as there does seem a view that given the geo-political landscape, silver could attempt a catch-up move at some point which has been proven in the past. Platinum held it's ground quietly, while palladium is struggling against the $895-905 resistance.

Gold opened this morning with some very light profit taking from fast money types, happy to cash in on the overnight rally. That said there were bids from retail and macro customers on pullbacks which certainly softened the morning decline and kept the spot price on the higher side of $1275. China were on the offer initially following the SGE open with the premium declining from yesterday and trading around $5-6 today. Price action was certainly more subdued today, although the gains were held which is a positive. Gold is certainly being driven by the geo-political climate at the moment, so if this cools over the coming week it will be interesting to see whether the metals maintain their momentum. Positioning, although increased over the past few weeks, still remains on the lean side. In other markets equities continue to lose ground the Nikkei currently off -0.1%, Hang Seng -1.25%, Shanghai Composite -0.75% and ASX200 -0.1%. The USD pushed higher generally but remained fairly flat against the JPY, while crude continued to inch lower - WTI crude currently -0.2% at $49.60 a barrel. On the data front today look out for French and UK industrial production data, UK trade balance, Canadian house prices and U.S. jobless claims, PPI and the monthly budget statement.

 

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.