DAILY REPORT : Tuesday 28 Aug 2018

MARKETS/MACRO In trade news, President Trump announced that the U.S. and Mexico had agreed on terms that would make for an ‘incredible’ deal that was “much more fair”. The negotiations between the two parties have been part of revisions to the North American Free Trade Agreement, which has so far excluded Canada. Preliminary details released show the two have agreed that 75% of a product must be made in the two countries to receive tax-free treatment and while the pact would hold for 16 years, there would be a review every six years. The Chicago Fed Nat activity index slowed during July, printing 0.13 (exp: 0.45) from 0.48 in June. The print saw the three-week moving average edge down to 0.05 from 0.20 previously, as 49 of 85 economic indicators made negative contributions. Production related indicators were the main drag, adding just 0.05 from 0.45 in June. Equity markets in the U.S. continued to run higher on Monday, buoyed by the positive NAFTA trade news between the U.S. and Mexico. The DJIA added +1.01% to 26,049.65 points, to reclaim the psychological 26,000 point mark for the first time since February. The S&P 500 saw strength across materials (+1.43%) and financials (+1.34%) to add +0.77% and print a fresh record close of 2,896.74 points, while the Nasdaq Composite traded strongly to break through 8,000, ending +0.91% higher to 8,017.895 points, also booking a fresh record close. The greenback once again struggled against majors, heavily offered in New York to see the DXY end -0.38% lower. The buck booked notable declines against the euro (EUR/USD +0.49%), while slipping against the yen (USD/JPY -0.24%).

PRECIOUS Another robust session for gold during Asian hours today, able to consolidate recent gains through USD $1,200 and break through Monday’s New York high. Price action was again generally dollar driven, with the yellow metal withstanding early Chinese weakness as the Shanghai premium dipped toward USD $4 and USD/CNH added +0.3% in early trade. Afternoon interest saw the metal buoyant around USD $1,208, piggybacking dollar weakness to test the New York high print. Bullion will need to break through the USD $1,215 - $1,220 resistant level to test the recent build up in short positioning, with a squeeze likely to target resistance around USD $1,240. Silver continues to see support around USD $14.80 and extended gains toward USD $15 during Asian trade today, while platinum has attracted interest on the move through USD $800 and palladium continues to consolidate around USD $950. Data today includes U.S. wholesale inventories, the Richmond Fed manufacturing index and the conference board U.S. consumer confidence 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 : Wed 22 Aug 2018

MARKETS/MACRO Equities in the U.S. continued to strengthen on Tuesday, notching a fourth successive session gain as optimism over U.S. – China trade talks buoyed sentiment. The DJIA booked a +0.25% gain to 25,822.29 points, while the S&P 500 touched an intraday record high before tempering gains late in trade to end +0.21% higher at 2,862.96 points. The greenback extended recent declines on Tuesday as comments from President Trump continued to reverberate across currency markets. The DXY index ended the session off -0.5% after making notable declines against the euro (-0.5%) and the pound (-0.3%), while emerging market currencies were broadly higher. Equities in Europe ended generally higher on Wednesday, seeing gains underpinned by financial and pharmaceutical stocks. The Stoxx Europe 600 added +0.24% to 384.15 points for a second successive gain, the German Dax climbed +0.43% to 12,384.49 points and the French CAC 40 jumped +0.54% to 5,413.58 points. In the U.K. weakness to energy and commodity stocks weighed upon the FTSE 100 to see the bourse close -0.34% lower.

PRECIOUS A largely muted session for bullion on Wednesday, with the yellow metal holding a narrow range amid uninspiring trade. Tuesday’s Trump-Cohen related headlines continued to underpin price action throughout Asian trade as currency markets tracked sideways to provide little in the way of direction for bullion. A brief push through the New York high leading into the Chinese open saw the session high of USD $1,197.30 printed, and while we continued to see physical demand out of Asia, gold pulled back marginally to sit around USD $1,195 throughout the remainder of the session. Participants will be watching how equities in the U.S. open today following the late session weakness, with any further Trump-Cohen headlines likely to weigh upon markets and be broadly supportive toward the precious complex. The psychological USD $1,200 pivot point continues to restrict near-term gains, while a move through this level is likely to see shorts tested, with a potential squeeze toward USD $1,210.

 

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 16 Aug 2018

MACRO US equities finished lower as the fallout from Turkey’s currency crisis continues, though the markets did pare some of the early losses on reports that Qatar has pledged to invest $15 billion in Turkey. The Dow lost 137.51 points, or 0.54%, to 25,162.41, the S&P 500 fell 21.59 points, or 0.76%, to 2,818.37, while the Nasdaq sold off 96.78 points, or 1.23%, to 7,774.12. There were wins for REITs (+0.84%) and utilities (+0.76%) while heavy losses in energy (-3.51%) and materials (-1.55%) led the laggards. In currency majors, the Turkish Lira clawed back a little more ground against the greenback, USD/TRY is now trading around 5.97. The US dollar index (DXY) crept up 0.02% to 96.71, the EUR tested 1.13 before recovering to 1.1352, while USD/JPY traded down to 110.43. US treasury yields were lower, the 2 year yield eased 2.9 bps to 2.608% while the 10 year yield shed 3.6 bps to 2.862%. European equities came under heavy selling pressure, the EuroSTOXX dropped 5.22 points, or 1.36%, to 379.70, the German DAX shed 195.86 points, or 1.58%, to 12,163.01, and the London FTSE 100 sold off 113.77, or 1.49%, to 7,497.87. There was a broad sell off in commodities as the situation in Turkey added to increasing concerns about the US/China trade war. Oil prices were lower, Brent fell 2.39% to USD $70.73 while WTI tumbled 3.19% to USD $64.90. Base metals were hammered, with zinc (-6.28%), nickel (-4.28%), copper (-4.02%) and aluminum (-2.17%) suffering sharp losses. In US economic data, retail sales rose 0.5% MoM in July following a 0.2% increase in June, while retail sales ex-autos rose 0.6% MoM in July. The Empire State Index rose 3 points to 25.6 in August. Business productivity rose to a 2.9% annualised rate in the second quarter of 2018, while unit labour costs fell by 0.9%. Industrial production increased by 0.1% in July following a sharp 1% rise in June, while capacity utilisation was unchanged at 78.1% in July. The NAHB home builders index fell to 67 in August from 68 in July.

PRECIOUS Mixed pricing for gold during Asian trade on Thursday, extending previous session weakness before paring declines and turning higher during the afternoon. A sharp sweep lower pre-Shanghai of in excess of 800k ounces saw bullion print the session low of USD $1,160.80, however the weakness soon reversed on the back of Chinese buying interest. Flows through the Shanghai exchange weren’t outside of what we have seen in recent sessions, however the premium continues to hold toward USD $5 to underpin price action. The yellow metal continues to look fragile at current levels and will need to find support around USD $1,160 to restrict a test toward the December 2016 low of USD $1,122. Dollar strength continues to create headwinds for the metal, while ETF outflows now sit toward 900k for the month to add further downwards pressure on pricing. On the data front, today we have weekly jobless claims, housing starts, building permits, and the Philly Fed index out of the US; Balance of Trade numbers out of the Eurozone; and wholesale prices out of Germany.

 

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 27 Aug 2018

MARKETS/MACRO Federal Reserve chair Jerome Powell was in focus on Friday, using his maiden speech at the Jackson Hole symposium as Fed chair to reiterate that a gradual normalisation in rates remains appropriate. Powell defended the central bank’s strategy, commenting that the Fed faces two major risks, of “moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilising overheating,”. The remarks were the first public comments from Powell since President Trump criticised the Fed’s rate increases and underscored his intent to operate independently of any political pressures. Durable goods orders in the U.S. fell -1.7% MoM during August (exp: -1.0%), largely a result of a sharp decline to new contracts for passenger jets. Excluding transportation, orders increased +0.2% (exp: +0.5%), while core orders jumped +1.4% (exp: +0.5%) from an upwardly revised +0.6% gain during July (prev: +0.2%). Equities in the U.S. posted gains on Friday following dovish comments from Fed chair Powell, seeing both the S&P 500 and the Nasdaq Composite to record closing highs. The S&P 500 saw strength from materials (+1.22%) and technology (+1.10%) to end +0.62% higher to a record at 2,874.69 points, while the Nasdaq Composite jumped +0.86% to a record at 7,945.98 points and the DJIA added +0.52% to 25,790.35 points. On a weekly basis the S&P 500 ended +0.9% higher, the Nasdaq Composite jumped +1.7% and the DJIA climbed +0.5%. The greenback extended recent declines against majors on Friday following the dovish comments from Fed chair Powell. The DXY index fell -0.5% after collapsing - 1.25% against the CNH, while also softer relative to the euro (EUR/USD +0.7%), however steady against the yen. The difference between the two-year and 10-year U.S. treasury yields fell to a fresh decade low on Friday, declining underneath 20bps (the measure has turned negative before every U.S. recession for the last 50 years). Equity markets across Europe ended higher on Friday, buoyed by Fed chair Powell’s comments and reports that President Trump said he could buy some of Italy’s debt. The Stoxx Europe 600 inched just +0.05% higher to 383.56 points, while the German Dax tacked on +0.23% to 12,394.52 points and in the U.K. the FTSE 100 saw strength across commodities to end +0.19% higher at 7,577.46 points.

PRECIOUS A relatively robust session for bullion on Monday following Friday’s dollar driven gains, seeing early session interest on the back of further dollar weakness, before consolidating throughout the afternoon. The yellow metal opened to a modest bid tone, testing toward Friday’s high print as the greenback traded heavily around the Tokyo open. The metal however ran into offers during early Shanghai trade as the onshore premium tempered toward USD $5 after moving above USD $7 last week. A sharp move lower to USD/JPY through Friday’s low underpinned a modest recovery to the metal, however the dollar soon found interest to reverse these gains and see bullion hold toward USD $1,205 into the London open. The large short positioning is likely still intact for now, however will be tested should the dollar remain under pressure and underpin a move through USD $1,210 - $1,215 for bullion. The metal will look to hold the USD $1,200 figure to entice interest for a leg higher, while support underneath the psychological level will be evident toward USD $1,185 - $1,190. A further positive for gold is the recent reduction in ETF selling, with only 10k of outflows recorded on Friday. Silver held a narrow range today to remain above USD $14.80, while the white metals also spent the session consolidating recent gains. Data releases today include German IFO survey results, the Chicago Fed activity index and the Dallas Fed manufacturing activity 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 : Tuesday 21 Aug 2018

MARKETS/MACRO With a lack of economic data releases for direction, equities in the U.S. found support on the back of hopes of improved trade relations between the U.S. and China, in addition to the announcement by PepsiCo that they would buy SodaStream. The DJIA booked a +0.35% gain to end at 25,758.69 points, while the S&P 500 was buoyed by strength across materials (+0.71%) and energy (+0.66%) to end +0.24% higher at 2,857.05 points. Both of the major bourses did however trim gains into the closing bell following comments from President Trump, escalating his criticism of Fed Chairman Jerome Powell and higher interest rates. The greenback extended recent declines on Monday, well offered in New York to see the DXY hand back -0.4%. The buck notably lost ground against the euro as the pair headed toward 1.15, while USD/JPY tested a break of 110.00. Treasury yields eased on Monday to see the curve at its flattest in 11 years. Longer dated yields slipped the most to see the 10-year 4.7bps lower to 2.823%, while the two-year declined 2.4bps to 2.596%. Oil futures notched a third successive session gain on Monday as the U.S. sanctions on Iran continue to create supply concerns. WTI added around +0.8% to settle at USD $66.43 per barrel, while Brent crude gained +0.5% to USD $72.21 per barrel.

PRECIOUS Bullion saw continued strength on Tuesday, closing in on the important psychological USD $1,200 level as the dollar traded offered. The overnight comments from President Trump underpinned price action to see the metal extend through USD $1,190 in early Asian trade, while continued demand out of China saw the on-shore premium move toward USD $6. It was a generally orderly ascent for gold, consolidating above USD $1,190 in early session flows, before moving through USD $1,195 during afternoon pricing. The metal now sits just underneath the key psychological USD $1,200 level and will no doubt test the extended short positioning should it take the figure. Silver was able to move through and hold above USD $14.80 during Asian trade today, while platinum reclaimed the key USD $800 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 : Wed 15 Aug 2018

MACRO The market got some relief overnight as the Turkish Lira recovered somewhat (~7%). President Recep Tayyip Erdogan yesterday said Turkey would boycott US electronic goods like the iPhone in retaliation for punitive sanctions from Washington, as the Turkish lira finally clawed back some of the ground lost in its stand-off with Washington. While the TRY recovered somewhat, the underlying issue however remains unsolved. This though did not deter a return to 'risk on' activity across markets. U.S equity indices bounced Tuesday, with the S&P500 snapping its longest losing streak since March, rising +18.03 points (+0.64%) to 2,839.96. The DJIA also rebounded +112.22 points (+0.45%) to 25,299.92 as did the NASDAQ Composite, up +51.189 points (+0.65%) to 7,870.895.

European stocks crept higher to mark the first advance in three sessions, as Turkey’s currency meltdown showed signs of steadying. Germany’s economy saw growth of +0.5% in the second quarter which was better than expected, yet global trade tensions and Turkey’s currency crisis are clouding the business outlook. The FTSE EuroFirst 300 inched up +0.89 of a point (+0.06%) to 1,506.77, while the EuroStoxx was flat at 384.92. Regionally the DAX was flat, FTSE100 was down -0.4% and the CAC40 lost -0.16%. The energy sector was slightly higher, helped by gains in the natural gas markets. However, crude oil prices remained under pressure as concerns over rising inventories weighed on sentiment (WTI -$0.55 or -0.85% to $66.63 bbl). Rumours emerged during the day that the American Petroleum Institute’s stockpile report would show a decent rise in inventories last week and this was eventually the case, with a 3.66m barrel rise reported. That comes in face of expectations of a large fall in the stockpiles when the weekly EIA report is released tomorrow. However, investor appetite was already waning on the back of a stronger USD. Reports that Libya’s crude oil output has risen to more than 1mb/d also weighed on sentiment. In the G10 space, the Euro was well offered, taking another leg lower to the mid 1.13 level after breaking through the 200 DMA at 1.1365. Flows yesterday were relatively quiet despite the price action with some macros and corporates being strong buyers of Euros on the dip.

In the U.S export prices showed signs of President Trump’s tariffs with agricultural prices falling sharply. Farm prices fell -5.3% MoM, the largest drop since 2011, while soybean prices fell -14.1%. Overall, export prices fell -0.5% MoM, moderating to 4.3% YoY (from 5.3%). Import prices were flat on a monthly basis but are up 4.8% YoY, from an upwardly revised 4.7% (previously 4.3%). Import prices from China were down 0.2%. Small business optimism in the U.S remains elevated, rising to 107.9 in July from 107.2 in June and beating expectations. The index sits at the second highest level in its 45-year history. Across the Atlantic, Q2 GDP growth in Germany was stronger than expected at +0.5% QoQ (+2.0% YoY) boosted by an increase in private and government spending. For the euro area as a whole, growth was estimated at +2.2% YoY, however, industrial production fell -0.7% in June. Encouragingly, there was a 2rebound in investor sentiment in August with the ZEW survey of current situation rising to 72.6 from 72.4 and expectations rebounding to -13.7, from -24.7. Inflation in Germany and France was confirmed at 2.0% and 2.3%, respectively. UK unemployment continued to fall, dropping to 4.0% in the three months to June, the lowest level since February 1975. Employment rose by +42k, less than forecast, but the participation rate dipped to 75.6%. There was a record drop in employment among EU nationals, falling - 86k, as Brexit impacts reverberate through the business community. Weekly earnings were up 2.7% YoY excluding bonuses. Overall, the labour market continues to tighten, however the BoE is likely to remain cautious in policy normalisation.

PRECIOUS A relatively muted session for gold on Tuesday, even amid stronger U.S. equities and further dollar strength. Early Asian session weakness gave way to interest out of China to halt a test toward the previous session low print. We saw the Chinese premium trade around USD $5 as USD/CNY failed to extend recent gains, supporting bullion through USD $1,195 or through USD $1,200 December futures. Offers above the key futures figure kept a lid on any further top-side gains, while a leg higher to the greenback in New York reversed the Asian session gains to have bullion end relatively flat on the session. Silver found short-term support to hold the USD $15 handle, while platinum failed to see interest at USD $800 and slipped below the figure.

Gold extended declines during Asian trade on Wednesday, pressured through the USD $1,192 support level leading into the Chinese lunch break. We once again saw interest in Shanghai as the on-shore premium held above USD $5, however a firmer greenback outweighed the demand to see gold to a fresh cycle low of USD $1,186.30. The ongoing global trade disputes remain supportive for bullion and we should see interest toward USD $1,180 and USD $1,172 restrict further declines over the near term. Of note is the further extension of short positioning and we may see some of this unwound should gold break through top-side targets at US $1,200 and USD $1,210. Silver slipped through the USD $15 support level in Asia today and may see weakness extend toward USD $14.80, while both the white metals retreated.

Data releases today include U.K. CPI, U.S. mortgage applications, U.S. Empire manufacturing, U.S. retail sales and U.S. industrial production.

 

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

 

 

DAILY REPORT : Friday 24 Aug 2018

MARKETS/MACRO US equities finished lower on low trading volumes ahead of this weekend’s symposium at Jackson Hole. The Dow lost 76.62 points, or 0.30%, to 25,656.68, the S&P 500 slipped 4.84 points, or 0.17%, to 2,856.98, while the Nasdaq fell 10.64 points, or 0.13%, to 7,878.46. Tech (+0.18%) was the only positive sector as materials (-0.70%), energy (-0.52%), and financials (-0.51%) dragged the markets lower. European equities were lower, the EuroSTOXX dropped 0.64 points, or 0.17%, to 383.38, the German DAX shed 20.12 points, or 0.16%, to 12,365.58, and the London FTSE 100 sold off 11.02 points, or 0.15%, to 7,563.22. In the currencies, the US dollar index firmed 0.50% to 95.62, the EUR was as low as 1.1532, and USD/JPY traded up to 111.28. The Australian dollar was dumped 1.5% as Prime Minister Malcom Turnbull faced a leadership challenge from within his own party. US treasury yields were higher, the 2 year yield firmed 2.5 bps to 2.616% while the 10 year yield added 0.7 bps to 2.826%. Oil prices remained pretty much unchanged after yesterday’s rally, Brent crept up 0.07% to $74.83 while WTI edged lower 0.03% to $67.84. Base metals were mixed, with nickel (-1.85%) the biggest mover. In US economic data, the IHS Markit’s manufacturing index flash reading fell to a nine month low of 54.5 in August from 55.3 in July. The services index flash reading fell to 55.2 from 56.0 in July. Economists believe the slowdown is largely due to a shortage of skilled labor and an increase in the cost of wages and some raw materials. New home sales declined to 627k in July from 638k in June. Initial jobless claims fell 2k to 210k in the week ending August 12. Continuing claims were unchanged at 1.73 million. In Asia today, as I write the Nikkei is at +0.71%, the Shanghai composite is at -0.35%, the Hang Seng is at -0.69%, and the ASX S&P 200 is at +0.29%. On the data front, tonight we have durable goods orders and core capital goods orders out of the US, plus US Fed Chair Jerome Powell’s address at the Jackson Hole symposium; and GDP growth numbers out of Germany.

PRECIOUS Tough day for the precious as gold finishes around the lows on broad USD strength. Gold opened at $1195 in Asia and spent the first hour around $1196, which would ultimately be the high of the day. The AUD was sharply sold against USD as it became increasingly probable that PM Malcom Turnbull would resign, we saw gold trade steadily lower to $1190 as a result. The SGE premium eased to $5-6 and which prompted decent selling flows out of China. Towards the end of the Asian session there was a small bounce followed by a gap lower to $1186 right on the London open. The market consolidated between 2 $1186-89 through most of the AM session in London before popping up above $1190 just ahead of the NY opening bell. Gold got as high as $1192 in NY before thing turned around, the greenback became broadly bid and the yellow metal was sold to a session low $1183 just before the close. Silver was under selling pressure right from the open in Asia, the grey metal closed right on the week low $14.47. PGMs were lower also, with platinum and palladium finishing at $775 and $915 respectively. The Philadelphia gold and silver index lost 3.15%. The SPDR Gold Trust holdings were down 0.19% to $767.23 metric tonnes. In Asia today, former treasurer Scott Morrison has replaced Malcom Turnbull as the new Prime Minister of Australia. The Aussie dollar recovered to 0.7282 on the news and gold is creeping higher. The SGE premium is back at $6-7 over loco London and we have seen decent buying out of China. The yellow metal is at $1188.90 as I write. Silver is also making a slow grind higher, the grey metal is currently sitting at $14.57. PGMs edging higher also. Gold should find resistance at yesterday’s $1192 high and the psychological $1200 level above that. On the downside, there appears to be buying interest around $1183 and further support at $1170.

 

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 20 Aug 2018

MARKETS/MACRO The University of Michigan consumer sentiment index declined to an 11-month low during August, falling to 95.3 (exp: 98.0) from 97.9 in July. Meanwhile the U.S. leading index outpaced expectations, rising to +0.6% (exp: +0.4%) from +0.5%. Equities in the U.S. posted gains on Friday to see the DJIA close at the highest level since late February on optimism over the resumption of trade talks between the U.S. and China. The bourse ended the session +0.43% higher at 25,669.32 points, booking a +1.4% rise on the week. The S&P 500 saw strength across real estate stocks (+0.96%) as the bourse added +0.33% to 2,850.13 points, while gaining +0.6% on the week. The greenback softened on Friday to book notable declines against the euro and the pound, seeing the DXY index off -0.51% for the session. Treasury yields in the U.S. were also lower following U.S. – China trade talk headlines.

PRECIOUS Gold had a positive session during Asian trade on Monday, consolidating Friday’s late session gains to book a modest return. The yellow metal was generally well supported throughout the session, with continued interest out of China helping to underpin price action. The Shanghai premium held toward USD $5 - $6 for much of the session, while USD/China eased lower as the dollar failed to recover from Friday’s declines. The latest CME COTR shows gold speculative positioning has turned net negative for the first time since 2001. Gross shorts increased further to a fresh record high, while gross longs inched only marginally higher to see total positing sit around 52% of the all-time high. Gold ETF flows registered a modest decline of 50,000 ounces on Friday, with a tempering of redemptions lessening top-side headwinds for bullion. Expect a broad band of resistance through USD $1,190 - $1,200, while further offers should congregate around USD $1,200. There are no major data releases scheduled 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 : Tuesday 14 Aug 2018

MARKETS/MACRO The Turkish central bank advised that it would take all necessary measures to maintain financial stability, including providing all the liquidity needed by banks, as the economic crisis continues. US equities continued to slide as the crisis in Turkey played havoc with investor sentiment worldwide. The Dow lost 125.44 points, or 0.50%, to 25,187.70, the S&P 500 slipped 11.35 points, or 0.40%, to 2,821.93, while the Nasdaq fell 19.104 points, or 0.25%, to 7,819.706. Losses in energy (-1.22%) and materials (-1.04%) led a near broad decline in the markets. European equities were lower, the EuroSTOXX dropped 0.95 points, or 0.25%, to 384.91, the German DAX shed 65.61 points, or 0.53%, to 12,358.74, and the London FTSE 100 sold off 24.56, or 0.32%, to 7,642.45. Currencies markets were a little more subdued with USD/TRY consolidating around the 7 level. The US dollar crept up 0.05% to 96.31, the EUR reached as high as 1.1431 before retreating below 1.14, USD/JPY dipped to 110.12 before recovering to 110.90. US treasury yields were higher, the 2 year yield firmed 0.4 bps to 2.608% while the 10 year yield added 0.2 bps to 2.875%. Oil prices were lower, Brent fell 0.07% to $72.76 while WTI declined 0.40% to $67.36. Base metals were broadly lower, with zinc (-2.51%) leading the losses. There was no significant economic data released overnight. In Asia today, as I write the Nikkei is at +1.48%, the Shanghai composite is at -0.50%, the Hang Seng is at -0.91%, and the ASX S&P 200 is at +0.76%. Tonight we have the NFIB small business index, import price index, and household debt out of the US; and GDP growth, the ZEW economic sentiment index, and industrial production out of the Eurozone.

PRECIOUS A dismal session for the precious as gold breaks below $1200 for the first time since March 2017. Gold opened at $1211 in Asia, traded briefly to what would ultimately be the session high at $1213, then settled around the $1208-9 level as USD/CNH continued to firm. The SGE premium opened around $1-2 and eased through the day. London were on the offer from the opening bell, selling the metal to $1196 in the AM session. Initially we saw buying below $1200 as the market bounced back to $1202, however the recovery was short lived as the yellow metal slid to a 15 month low $1192 in NY hours. Gold finished the day almost 1.5% lower and only just above the lows at $1193. Silver shed over 2% and traded below the $15 level for the first time since April 2016. The PGMs were also heavily sold, with platinum and palladium finishing at $799 and $890 respectively. The Philadelphia gold and silver index tumbled 3.05%. The SPDR Gold Trust sold 0.19%, to 784.60 metric tonnes. In Asia today, gold is trading between $1193- 96 as USD/CNH comes off yesterday’s high. The SGE premium is firmer at $4-5 over loco London. The yellow metal is sitting at $1195.10 as I write. Silver has traded either side of the $15 level through the day, the grey metal is at $15.02 as I write.

 

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 23 Aug 2018

MARKETS/MACRO The USD continued its sell-off on news of the conviction of President Trump’s advisers and the calmer tone in emerging markets. The dollar fell for the sixth straight day as the Dollar Index eased -0.1% overnight, with USDJPY gaining +0.2% to 110.56 and EURUSD up +0.2% to 1.1597, unwinding almost all of its Turkey-related weakness. U.S equities slipped slightly yesterday, halting four consecutive sessions of advances as weakness in industrials (-0.95%) and Teleco's (-2.0%) overshadowed gains in tech (+0.48%) and energy (+1.2%). The S&P500 dipped -1.14 points (- 0.04%) to 2,861.82, the DJIA retreated -88.69 points (-0.34%) to 25,733.60 and the tech-heavy NASDAQ Composite rose +29.924 points (+0.38%) to 7,889.097. JP Morgan in a piece noted that U.S equities have entered their longest bull-run in history, notching up 3,453 days on Wednesday, beating the previous record between October 1990 to March 2000. Post GFC the S&P500 has rallied an impressive 300%+. European stocks ended generally unchanged Wednesday, with an early rally fading in the afternoon. Banking shares rose broadly, yet investors held off on making big bets ahead of the FOMC minutes. The EuroFirst 300 index was up +0.02 of a point to 1,502.31 while the EuroStoxx 600 inched down -0.13 of a point (-0.03%) to 384. WTI crude prices surged +$2.27 (+3.45%) to $68.11 and Brent shot up +$2.26 (+3.10%) to $74.88 after a government report showed a large fall in inventories. The EIA reported that U.S crude oil stockpiles fell by 5.84m barrels last week, much greater than the market’s expectations of around 2m barrels. The fall was driven by a fall in imports, which slid the most in six weeks to 7.52m bbl/d. The market viewed this as a strong sign that the market, both in the US and globally remains tight. This helped to diffuse any concerns that the release of crude oil from the U.S strategic reserve would soften the market. This was reinforced by Iran, which said the fact that the U.S is planning to release oil shows that other producers can’t raise enough output. U.S yields continued to cool slightly on the day, the 10y yield down -1.1 bps to 2.819% and the 2y yield inching down -0.4 of a bp to 2.591%.

Federal Reserve policy makers said they continued to expect the U.S. economy to expand at an above-trend pace, prompting the need for further rate hikes, according to the minutes of the Fed's July meeting. “Fed staff continued to project that the economy would expand at an above-trend pace", the minutes showed. "Members expected that further gradual increases in the target range for the federal funds rate would be consistent with sustained expansion of economic activity, strong labour market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term. In a sign of confidence on the strength of the U.S. economy, Fed policy makers raised their outlook on U.S. economy growth, citing stronger household spending. “Relative to the forecast prepared for the June meeting, the projection for real GDP growth was revised up a little, primarily in response to stronger incoming data on household spending", the minutes said. The Fed modestly downgraded its outlook on inflation, which was hurt by falling oil prices, but policy makers remained adamant that inflation would remain near the central bank's 2% objective. Another hike next month is 92% priced (90% yesterday). So far, there is little evidence that the tighter policy is slowing the fiscal fuelled juggernaut that is the US economy, but the cooling in the 2 housing market is arguably a notable exception. Full minutes can be found here: https://www.federalreserve.gov/monetarypolicy/fomcminutes20180801.htm. 

 

 

On the data front, sales of previously owned houses in the U.S declined -0.7% MoM to a seasonally adjusted annual rate of 5.34 million in July of 2018. It compares with market expectations of a +0.6% rise to 5.4 million. It is the fourth straight fall and the lowest rate since February of 2016. The median house price fell to $269,600 from $273,800 in June and the months-worth of supply was flat at 4.3. In addition, the number of houses available in the market declined to 1.92 million from 1.93 million in June. YoY, existing home sales fell -1.5%.

 

PRECIOUS Gold tested through $1200 during NY yesterday, although was unable to hold the gains closing the day much where we started (~$1196). Gold opened in Asia yesterday at $1196 and unlike the previous days this week flows were not as skewed to the buy side. Nonetheless there was enough interest to quickly push the metal up just shy of $1198 pre-SGE open, although we eased back rather quickly. The SGE premium traded at $6.00 and the spot gold held fairly constant around $1195-1196 throughout the AM and lunch, although as we ticked into the afternoon, some early European selling began to emerge and we dipped off to the lows of the day ($1193.00). Later in Europe the EURUSD began to turn higher and gold pushed back towards the earlier Asia high, following a headline that President Trump's former lawyer has knowledge of the Russian conspiracy. Some COMEX bids at the U.S open helped the yellow metal through $1200 to a peak of $1201.25, but there was no follow through and stops were tripped on the way back through $1199-1200 area. The FOMC minutes were released and mentioned that current accommodative monetary policy would at some point "fairly soon" be "no longer appropriate" and caused a pop to $1199. Just as quickly as it went up though we traded back towards $1195, ultimately closing at $1196. The best performing metal overnight was palladium, which after testing toward $910 late in Asia/early Europe, caught a bid throughout the NY session and kept angling higher throughout - closing at $926. Net shorts remain at extremely elevated levels and have assisted with the pull-back from $1160. With a changing political climate and particularly with Trump's inner circle coming under further pressure regarding various fraud and campaign crimes, gold may find a bit of support in the near-mid term.

Gold opened where it left off in NY and was under pressure early as the USD started to claw back some of yesterdays losses. The USD strength persisted throughout the morning and all the precious complex continued to sell-off unabated leading into the SGE open. Right on the open the gold shot down to $1191.50 although some physical demand did present itself down there and we gradually recovered to $1194.The USD remained strong particularly vs the AUD over the course of the morning and despite some decent Chinese demand, the gold continued to sell-off toward $1190. There has been no sign of the USD retreating and the metals remain close to the lows of the day, with China just back in for the PM session. Market attention will now shift to the preliminary August PMI data and FOMC Chairman Powell's speech at Jackson Hole this Friday. 

 

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 17 Aug 2018

MARKETS/MACRO Initial jobless claims in the U.S. eased 2,000 to 212,000 (exp: 215,000) during the week ended August 11, seeing the four-week moving average inch 1,000 higher to 215,500. Continuing claims slipped 39,000 lower to 1.72 million for the week ended August 4. Housing starts in the U.S. rebounded during July, however at a weaker rate than expected, increasing just +0.9% MoM (exp: +7.4%) to follow a -12.9% fall in July. The Philadelphia Fed business outlook softened during August, falling to 11.9 (exp: 22.0) from 25.7 previously, largely weighed down by weakness to new orders. Equities in the U.S. surged higher on Thursday as a string of positive corporate earnings results buoyed sentiment. The DJIA jumped +1.58% to 25,558.73 points to mark the best single-session result since early April, while the S&P 500 added +0.79% to 2,840.69 points as all eleven of the bourse’s components closed higher. Currency majors saw mixed trade against the greenback on Thursday, with the DXY easing around -0.1% to consolidate recent gains. The euro pushed briefly through 1.14 to end around +0.2% higher on the session, while the yen handed back previous session gains as the dollar moved through 111.00 against the safehaven currency. Oil futures booked modest gains on Thursday following sharp declines on Wednesday, seeing WTI end +0.7% higher at USD $65.46 per barrel, while Brent crude tacked on just under +1% to USD $71.43 per barrel.

PRECIOUS Gold saw relatively muted price action during Asian trade today, finding respite amid a weaker greenback to hold support around USD $1,172, with Asian physical demand continuing to remain robust. Early session offers, much the same as on Thursday saw the yellow metal initially lower in Tokyo, breaking underneath the New York closing level to touch a USD $1,172 session low. The weakness was however short-lived as the metal attracted bids toward the support level, sharply reversing declines into the Shanghai open to test a break toward USD $1,180. Interest out of China saw the on-shore premium hold around USD $5 to keep bullion buoyant above USD $1,175, while the greenback tracked sideways after early session weakness to underpin pricing above USD $1,175 leading into European hours. The yellow metal continues to take pricing cues from both the dollar and U.S. equities, largely unresponsive to geopolitical events, however it would be remiss not to consider the potential impact of an escalation of trade wars. Initial support sits toward USD $1,172, with USD $1,160 the next supportive level should we see further short-term weakness, and below this ultimately the December 2016 low of USD $1,122. It’s worth highlighting the recent price action we have been seeing in palladium, with a shortage of physical sending the metal into heavy backwardation to see spot +5.5% higher on Thursday. Data releases today include Eurozone CPI, the U.S. leading index and University of Michigan consumer sentiment gauge.

 

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 13 Aug 2018

MARKETS/MACRO Turkey contagion risks were elevated Friday and there was a strong risk-off move in global markets as President Erdogan’s speech failed to calm nerves and President Trump pledged to double the steel and aluminium tariffs against the country. The USD strengthened, treasury yields fell, stocks were sold and commodities were mixed.

The Turkish lira fell -15% on Friday, bringing YTD declines to ~42% in a country with considerable foreign denominated debt. U.S equity markets unwound on the day, the S&P500 notching up its worst daily drop since June. In the end the S&P500 retreated -20.30 points (-0.71%) to 2,833.28, the DJIA lost -196.09 points (-0.77%) to 25,313.14 and the NASDAQ Composite declined -52.672 points (-0.67%) to 7,839.11. Materials faired the worst (-1.4%), while Energy out-performed (+0.3%). European stocks closed sharply lower Friday as worries that problems in Turkey could infect other Euro-zone countries unsettled investors. Banking stocks led the decline: BBVA (-5.2%), BNP Paribas (-3%) and UniCredit (-6%) all slumped and are amongst the biggest lenders to Turkey. The EuroFirst 300 Index plunged -16.69 points (-1.09%) to 1,510.50 and the EuroStoxx 600 relinquished -4.19 points (-1.07%) to 385.86, while regionally the DAX was hammered -1.99%, CAC40 -1.59% and FTSE100 dropped -0.97%. Crude oil prices rose sharply as concerns over supply disruptions intensified - WTI up +1.23% to $67.63 and Brent rose +0.75% to $72.81. With U.S sanctions on Iran back in place last week following the U.S pulling out of the Iran nuclear deal, all eyes have been on the impact on crude oil exports from that country. The IEA warned the sanctions could threaten global oil supply and that maintaining global supply might be very challenging. The U.S is doing its bit to increase production however, with data showing drilling activity is continuing to rise with the number of drill rigs operating rising by 10 to 869, the highest since March 2015. The Turkish lira extended losses, tumbling nearly -15% to a fresh historic low, on Friday as U.S. President Donald Trump announced that he would double tariffs on steel and aluminium for Ankara. “I have just authorised a doubling of tariffs on steel and aluminium with respect to Turkey as their currency, the Turkish lira, slides rapidly downward against our very strong dollar!” Trump proclaimed via his Twitter account, noting that the tariff on aluminium would now be 20% while the levy on steel would rise to 50%. “Our relations with Turkey are not good at this time!” he mentioned. The European Central Bank is also increasingly concerned about Euro-zone banks' exposure to Turkey, the Financial Times reported on Friday, sending bank shares lower as the Lira languished. The ECB, which declined to comment on the FT report, is said to be chiefly concerned about BBVA, UniCredit and BNP Paribas. They have among the largest operations in Turkey, although their local subsidiaries' contribution to the overall balance sheet of the respective company's as a whole is relatively modest. The Turkish lira has resumed its prolonged slide as a rift between Turkey and the United States widens and concerns grow about President Erdogan's grip on monetary policy under a powerful new executive presidency. The headline U.S CPI for July printed in-line with the street at +2.9% YoY (+0.2% MoM) while the core ex-food/energy number ran a bit firmer at +2.4% YoY (+2.3% expected). Real Average Hourly earnings declined 0.2% y/y following a flat June figure.

PRECIOUS Gold showed some signs of life Friday, tumbling during Asia towards $1206, although running as high as $1217 as the currency crisis in Turkey continued, breathing a little 'safe-haven life' into the metal. We opened in Asia Friday around $1213 and as usual the market was focusing on moves in USDCNH to gauge direction in early trade. The pair remained fairly stable - as did USDCNY when it fixed - which kept the spot metal in a tight $2 range between $1211.50-1213.50 throughout the AM. TRY began to come under pressure around the opening of the PM session with USDTRY pushing through 6.00, and the dollar remaining well bid vs. CNH and CNY. The metal shot sharply below $1210 and some weak intra-day longs quickly closed positions dragging the spot gold down to a low of $1206.10. We managed to hold that $1204-07 level once again, with some bargain hunting steadying proceedings throughout the European day. By the time NY came in the yellow metal was trading back through $1210, which continued to gain more safe-haven momentum following Trump's tweeting about extending tariffs on metals from Turkey. Later in the session the EURUSD began to descend which drew out some profit taking and prompted the metal to give up some of the gains and close the day largely unchanged around $1211.50. All in all, we are viewing Friday's session as reasonably positive, as it was good to see the USD strengthen significantly with gold managing to hold its ground - a scenario seldom seen over the past few months. ETF liquidation remains steady at present and the CFTC report still shows an abundance of non-commercial shorts.

Gold today was heavy as the USDCNH and USDCNY continued to advance. The yellow metal remained flat over the first hour of trade, even drifting to the days highs of $1213.80 prior to the Shanghai open. Once China came in for the day, the USDCNH was swiftly bid from 6.8740 to 6.89 which prompted gold to angle lower and push back through $1210. USDCNY fixed some 3 big figures higher which also continued to apply pressure on the metal down below $1208. We did see a bit of Chinese demand surface toward the end of the AM session, although it wasn't enough to push the metal back through $1210. As I write the USDCNH has edged a little lower and gold is trickling higher, so it will be interesting to see what direction we take on the SGE re-open. In other markets Asian equities are getting hammered, the Nikkei currently -1.95%, Hang Seng -1.85%, ASX200 -0.45% and Shanghai Composite -1.8%. Crude is lower on the day and dollar is mixed. There is no major data releases scheduled for 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.