DAILY REPORT : Thursday 08 Feb 2018

MARKETS/MACRO: U.S equity markets closed modestly lower on Wednesday as volatility continued to moderate, the Dow still spanning 500 points mind, as investors still struggle to adjust to an investment environment marked by both rising bond yields and signs of inflation. In the end the DJIA softened -19.42 points (-0.08%) to 24,893.35, the S&P500 retreated -13.48 points (-0.50%) to 2,681.66 and the Nasdaq Composite was hit hardest down -63.899 points (-0.90%) to 7,051.983. Things were significantly more positive in Europe for equities, the major indices snapping a seven day losing streak and closing strongly in the black. The Euro First 300 index surged +29.51 points (+2.02%) to 1,492.15 and the Euro Stoxx 600 rallied +7.34 points (+1.97%) to 380.13. Regionally the FTSE100 advanced +1.93% to 7,279.42, the DAX leapt +1.6% to 12,590.43 and the CAC40 rose +1.82% to 5,255.90. The USD rose against the G10 with bipartisan support for a budget deal sending yields higher. The Dollar Index gained nearly +0.8% to 90.26 with EURUSD down -0.9% to 1.2260. The US 10Y bond yield gained another 3bp to 2.84% on top of the near 10bp rise on Tuesday and the 30Y yield gained another 5bp back to 3.11%. Crude oil prices collapsed after data showed a sharp rise in U.S oil production, WTI falling -$1.52 (-2.4%) to $61.87 on the day. EIA reported that last week’s output rose +332k b/d from the previous week to 10.2 mio b/d. This raised concerns among investors that the rising oil prices would push U.S production to levels that could potentially wipe out the production cuts that OPEC have instigated. The report also showed that inventories jumped higher, up 1.89 million barrels to 420.25 million barrels last week. This all came on the back of revised forecasts for U.S production from the EIA. They now see domestic output hitting 11 million b/d by November.

Congressional leaders clinched a 2 year deal to lift strict budget caps on defence and domestic spending, putting an end to a series of short-term spending bills and shutdown fights that have been prevalent in Washington the past few months. The deal is expected to increase defence and domestic spending by roughly $300 billion over two years, according to administration and congressional sources, as well as lift the debt ceiling and include tens of billions in disaster aid.New York Fed President William Dudley took part in a panel discussion on banking culture during which he said the recent drop in the stock market wasn’t big enough to alter the economic outlook. While Chicago Fed President Charles Evans (non-voter who dissented last meeting), remained dovish, stating that: “With the data I see today, my policy strategy would be to keep policy on hold until mid-year or so in order to assess the incoming inflation data”.

PRECIOUS: Gold was again under pressure Wednesday in what has been a wild week for the precious metals. The stronger dollar overnight weighed on the gold which tested as low as $1311.65 in volatile trade again, down an additional -0.7% on the prior day. Yesterday's session began in a reasonably positive light with steady onshore buying seen from China as the USDCNY lifted the SGE premium up towards $9-10. Spot gold as a result made a very gradual ascent towards $1332 ($1325 open), the peak hit right at the China PM session close, before giving back ground as Comex offers mounted above $1330 (cash). As the USD and yields continued to climb throughout the European and U.S sessions investors continued to liquidate longs till around midday in NY. Recovering $4-5 from the lows into the close at $1318. Long Comex net positioning continues to reduce with the April open interest already down ~15k lots between Monday and Tuesday. ETF investors have also been reducing holdings since the start of the week, with fund holdings depreciating ~7.4 tonnes on Tuesday according to BBG data - the biggest decline in nearly a year. The SPDR ETF (largest single gold ETF) had its holdings fall ~1.4 % earlier in the week, reflecting the funds worst single-day decline since 2016. Looking at the charts support for gold sits around $1312-14 (head and shoulders) and more importantly $1300-1303 (50 dma and psycholgical 1300 level), while resistance will sit between $1325-1335 for now. Elsewhere, the World Gold Council announced that global gold mine production had risen for a ninth consecutive year in 2017. Platinum and palladium fell between -1% and -2% yesterday as specs liquidated positions. This was despite PGM producers remaining subdued about their outlook. An industry conference heard companies warn that PGM production will remain flat at best, as the industry grapples with high costs of production and a lack of capital investment.

It was a choppy day today for the precious metals, gold initially firming in early trade and then succumbing to fresh cycle lows following a surging RMB during the afternoon. Gold opened at $1318 this morning initially inching its way a few dollars higher as some spec shorts were happy to lock in profits. There was consistent selling on Comex early on however and offers above the $1320 cash level were enough to prevent an advance. When China opened and due to the USDCNY rally overnight, as predicted, the buying was minimal. Spot gold slowly began to work its way lower with ongoing liquidation seen from managed money and leveraged clients - ie. those who were still buying aggressively above $1340. Gold meandered its way back toward $1313 ($1315 Apr gold) throughout the SGE AM and there was some 5000 lots (GCG8) that churned through at that level. We eventually broke lower however, spurred along by Chinese trade data which saw a much narrower surplus than what was expected ($20.34 bln vs $54.65 bln expected). This was driven by an unexpected surge in imports of +36.9% (10.6% expected, +4.5% prior), while exports only rose +11.1% (10.6% expected, +10.9% prior). USDCNY after trading down to 6.2815 ripped higher to 6.3449 and sent gold spiralling through the overnight low down to $1310.10. As I write gold is holding precariously between $1310-1313 and the USDCNY has relinquished some of the gains to 6.3214. Ahead today on the data calendar look out for the BoE rate decision and U.S jobless claims. 

 

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 02 Feb 2018

MACRO: US equities were mixed in a choppy session sandwiched between Wednesday's FOMC announcement and tonight's non-farm payroll data. The Dow added 37.32 points, or 0.14%, to 26,186.71; the S&P 500 edged lower 1.83 points, or 0.06% to 2,821.98, while the Nasdaq fell 25.619 points, or 0.35%, to 7,385.863. There were wins for telecoms (+2.48%) and energy (+1.10%) while REITs (-1.86%) and utilities (-1.58%) weighed on the markets. European shares were lower as investors remain nervous that the increase in bond yields will continue, the EuroSTOXX lost 1.97 points, or 0.57%, to 393.49, the German DAX dropped 185.58 points, or 1.41%, to 13,003.90, and the London FTSE 100 shed 43.16 points, or 0.57%, to 7,490.39. In the currencies, the US dollar index lost 0.57% to 88.629, the EUR traded up to 1.2517, while USD/JPY was as high as 109.72 before pulling back. The sell off in US bonds continued with the market still feeling the effects of the Fed's mildly hawkish statement on Wednesday. The 2 year yield rose 1.83 bps to 2.1589% and the 10 year yield climbed 7.71 bps to 2.7821%, posting a fresh 4 year high in the process. In commodities news, oil markets were given a boost as Goldman Sachs released a report revising it's price forecast significantly higher. The 3 month forecast for Brent is now $75 and the 6 month has been revised to $82.50, the basis of their revision is the view that the rebalancing of the oversupplied oil market already occurred in late 2017, some 6 months earlier than originally expected. Brent rallied 1.31% to $69.79 while WTI rose 1.93% to $65.98. Base metals were broadly higher, with nickel (+1.84%) leading the way. In US economic data, fourth quarter productivity fell at a seasonally adjusted annual rate of 0.1%, the first quarterly decline since 2016. Unit labour costs increased at a 2% rate for the quarter. For the full calendar year, productivity rose 1.2%. The ISM manufacturing index fell to 59.1% in January from 59.3% in December; new orders, production, and employment fell, while the prices paid index posted a strong gain. The Markit manufacturing PMI rose to 55.5 in January from 55.1 in December, remaining unchanged from the flash estimate. Initial jobless claims fell by 1k to 230k in the week ending January 27. Continuing jobless claims increased by 13k to 1.95M. In Asia today, as I write the Nikkei is at -1.01, the Shanghai composite is at -0.41%, the Hang Seng at +0.13%, and the ASX S&P 200 is at +0.40%. Tonight investors attention will be focused on the non-farm payroll numbers out of the US, along with the unemployment rate, average hourly earnings, consumer sentiment index, and factory orders; we will also see PPI data out of the Eurozone.

PRECIOUS: Strong finish for the precious as rising US treasury yields cause jitters elsewhere in the markets. Gold opened at $1344 and after an early pop over $1346 settled around $1342-44 with the SGE premium a touch softer at $8. The market started to look soggy late in the day as USD/JPY started to tick up and the EUR dipped below 1.24, ending up at $1338 by the time London came in. Gold looked tired during the London AM session, printing the days low of $1337 just before NY open. Things took a turn from here as a sell off in USD began to pick up steam, the yellow metal climbed steadily higher through NY hours, eventually making a move on the $1350 resistance level as the EUR traded back above 1.25. Resting orders at this psychological level capped the market and gold finished the session at $1348. Silver traded quickly to the days high $17.35 which seemed to trigger some profit taking, the grey metal ultimately closing lower at $17.18. Platinum was able to halt it's recent slide, finishing in the black at $1040 despite posting a 6 week low $1014 during Asian hours. Platinum found enough interest to close back above the $1000 level. The Philadelphia gold and silver index slipped 0.7%. The SPDR Gold trust physical holdings were unchanged 841.35 metric tonnes. In today's trading, gold made a couple of attempts on $1350 but has been ultimately range-bound, the SGE premium is constant at $8 over loco London. The yellow metal is at $1347.90 as I write. Silver has been quiet, the grey metal is flat at $17.20 as I write. Little action in the PGMs either, platinum is looking a little softer but has held above the $1000 level thus far. All eyes on the NFP numbers tonight, a figure outside the consensus forecast could rattle the markets where volatility has already crept in over the last week or so. Gold is close to the first resistance at $1350 and the Jan high $1365 should be the target after that. On the downside, the metal should find first support at the weeks low of $1334.

 

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 29 Jan 2018

MACRO: U.S. government data released on Friday showed GDP increased at an annual rate of +2.6% QoQ during Q4 2017, down on estimates centred around 3.0% and Q3’s +3.2% result. Underpinning the figure was a tax-cut driven increase in business equipment investment, jumping at an +11.4% annualised rate. Friday’s report also showed personal consumption at a +3.8% QoQ annualised to follow +2.2% previously. Durable goods orders in the U.S. spiked +2.9% MoM during December (exp: +0.8%) to follow an upwardly revised +1.7% gain the month prior (prev: +1.3%). The headline figure was driven by a +55.3% surge in orders for military aircraft, while the closely watched non-defence capital goods print slipped to -0.3% (exp: +0.6%) from a +0.2% increase previously. Each of the major U.S. stock benchmarks finished at record closing levels on Friday, buoyed by the robust GDP print to book a fourth consecutive weekly advance. The DJIA rose +0.85% to 26,616.71 points, while strength across healthcare (+2.17%) helped to see the S&P 500 +1.18% higher to 2,872.87 points and the tech-laden Nasdaq Composite jumped +1.28% to 7,505.772 points. The greenback remained under pressure on Friday, sliding against majors to see the DXY index -0.33% down on the session.

PRECIOUS: Bullion opened into dollar headwinds during Asian trade on Monday, seeing an initial bid tone extinguished, and with it, sinking below the USD $1,350 pivot point. Soft physical demand and an offered bias in early Chinese trade saw the metal as low as USD $1,346.50, however notably the on-shore premium in Shanghai remained robust toward USD $8 over loco London bullion. Into month-end expect the yellow metal to trade heavily around USD $1,350 in lieu of any major dollar moves, however any dips toward USD $1,340 - $1,345 are likely to garner solid interest to restrict further downside moves. Silver was unable to recapture USD $17.50 during Asian trade today and struggled to find interest throughout the afternoon, while platinum remains under pressure and heads closer toward USD $1,000 and palladium hold below USD $1,100 following Friday's weakness. Data today includes U.S. personal income/spending as we head toward Wednesday's FOMC meeting/announcement and Friday's Nonfarm payroll 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 07 Feb 2018

MACRO: The U.S. trade deficit increased 5.3% during December to $53.1 billion, the widest since October 2008 as imports outpaced exports. The Labor Department’s monthly JOLTS report showed job openings decreased 167,000 to a seasonally adjusted 5.8 million during December, led by a decline of 119,000 to the professional and business service sector. The number of workers willingly leaving their jobs increased by 98,000 to 3.259 million, the highest level since January 2001. Equity markets in the U.S. endured a wild ride on Tuesday, however ultimately ended the session in the black following early session weakness. After opening over 500 points lower, the DJIA sharply reversed to book the best single session percentage gain in over 12-months, adding +2.33% to finish at 24,912.77 points. The S&P 500 added +1.74% to 2,695.14 points as materials led the bourse higher, while the Nasdaq Composite ended +2.13% higher. The VIX volatility index pulled back following Monday’s +116% increase, easing around -20% as some stability crept back into the market. Treasury yields were back on the march higher on Tuesday, with the 10-year yield pushing through 2.8% once again.

PRECIOUS: A resurgent greenback kept bullion under pressure on Tuesday as safe-haven interest was further scuttled by a recovering stock market. Asia opened to a stronger precious complex, as early indications from U.S. equity futures markets pointed toward further weakness on Tuesday. After pushing above USD $1,340 in early Shanghai trade, price action remained buoyant above the figure throughout European hours, seeing further support from an offered dollar. What initially looked like a promising session for gold soon reversed course in New York as equities erased early session weakness, the dollar ripped higher and treasury yields popped. Stops around USD $1,340 gave way to interest toward USD $1,335, however the metal soon ran out of supporters to take a fresh leg lower underneath USD $1,330 and then finally collapsed late in trade to a USD $1,321.50 session low. Vols eased into Tuesday’s close as 1m dipped underneath 11, while ETF’s reported modest outflows.

Asian trade on Wednesday saw bullion stage a modest recovery following Tuesday’s collapse, pushing toward USD $1,330 in a generally orderly fashion, however unable to make a meaningful break above the figure. Tuesday’s price action has no doubt spooked investors, in particular fresh long positioning that would have been instigated on the back of the flight out of equity markets. It is worth noting we are seeing a minor slowdown in Chinese demand as we head toward Chinese New Year and this is likely to accelerate and remove some of the supportive interest out of Asia in the coming sessions. Expect to see supportive price action broadly between USD $1,316 - $1,320, while offers around USD $1,330 have capped top-side moves thus far today, however more important levels extend between USD $1,335 - $1,340.

 

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 01 Feb 2018

MACRO: As widely expected, the FOMC decided to keep short-term interest rates on hold on Wednesday, staying within the 1.25% - 1.50% range. The meeting was the last chaired by Janet Yellen as she hands over the reins to Jerome Powell who is scheduled to be sworn in on Monday. The committee indicated a March interest rate increase is still very much on the table, as the post-meeting policy statement struck a hawkish tone with members confident the inflation rate will stabilise around the 2% objective over the medium term. ADP employment data released on Wednesday showed a further 234k jobs added during January (exp: 185k), with the services sector once again underpinning the headline figure to contribute 212k positions. Additions by business size were broadly even as mid-sized business gained 91k, large size business added 85k and small business contributed 58k. Within the services sector, information (-3k) was the only negative contributor as trade, transportation and utilities increased 51k, while professional and business (46k), education and health (47k) and leisure and hospitality (46k) all reported strong gains. U.S. pending home sales edged higher during December, adding +0.5% MoM (exp: +0.5%) to follow a +0.3% increase the month prior. Equity markets in the U.S. rebounded from recent weakness on Wednesday, however the main indices endured volatile trade following a strong open. The DJIA closed the session +0.28% higher at 26,149.39 points, while the S&P 500 crept into positive territory (+0.05%) as real estate stocks (+1.6%) helped to outweigh declines to healthcare stocks (-1.49%). The greenback saw mixed trade on Wednesday, recovering from Asian-led weakness during afternoon trade in New York following supportive commentary out of the FOMC meeting. The DXY index ended the session modestly higher after the dollar booked a sustained break above 109.00 against the yen, while EUR/USD dipped below 1.24 after trading to an intra-session high of 1.2475.

PRECIOUS: Bullion held within the recent range amid whippy trade on Wednesday, breaking to a USD $1,332.50 session low around the FOMC decision on dollar strength, before ripping higher into the close and testing the recent resistance toward USD $1,350. The yellow metal was able to hold onto late session gains and settle around USD $1,345 for a +0.5% result, seeing further strength tempered somewhat by bid U.S. equity markets and layered offers throughout the broad USD $1,345 - $1,350 resistance level. Asian trade on Thursday saw mixed price action following the New York volatility, with bullion initially seeing strength amid a softer dollar. Shanghai continued to see interest toward USD $8 above London bullion, however heavy trade through Comex weighed upon the price action around the Chinese open to test a break of USD $1,340, before modest bids throughout the afternoon saw bullion recapture the majority of the early Shanghai weakness. The yellow metal continues to see firm interest with volumes passing through Comex notably elevated, however thus far has been unable to make a sustained move outside of the USD $1,335 - USD $1,350 range. Offers toward USD $1,350 are likely to restrict further top-side gains over the near term in lieu of major dollar moves, while in addition, producer interest around this level continues to weigh upon the price action. Data releases today include U.S. initial jobless claims, Bloomberg U.S. consumer comfort, Markit U.S. manufacturing PMI, U.S. construction spending and ISM U.S. 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 25 Jan 2018

 

MACRO: House prices in the U.S. increased modestly during November according to the latest report from the FHFA, rising +0.4% MoM (exp: +0.5%) to follow an upwardly revised +0.6% increase the month prior (prev: +0.5%). Existing home sales in the U.S. declined by more than expected during December, sliding -3.6% MoM (exp: -1.9%) to annualised rate of 5.57 million (exp: 5.70 million). The December print was reportedly a result of a decline in the number of previously owned homes on the market, falling -11.4% to 1.48 million to mark the lowest level since January 1999. The Markit U.S. manufacturing PMI (flash) edged higher during January, printing a 34-month high of 55.5 (exp: 55.0) from 55.1 during December. The services PMI print meanwhile drifted modestly lower, easing to 53.3 (exp: 54.3) from 53.7 previously. U.S. equity markets endured a wild ride on Wednesday to end mixed as the DJIA pushed to a fresh record close, while weakness across technology stocks dragged the S&P 500 and the Nasdaq lower. The DJIA climbed into positive territory late in the session to end +0.16% higher at 26,252.12 points, while the S&P 500 eased just -0.06% to 2,837.54 points and the Nasdaq Composite shed -0.61% to 7,415.059 points. The Greenback continued to decline on Wednesday to see the DXY index slump below 90 for the first time since December 2014. Comments from U.S. Treasury Secretary Steven Mnuchin were the catalyst for the fresh sell-off. Speaking at the World Economic Forum in Davos, Switzerland, Mnuchin said that a weaker greenback “is good for us as it is related to trade and opportunities.”

PRECIOUS: Bullion extended recent gains on the back of the Mnuchin-led dollar weakness on Wednesday, importantly breaking above key resistance levels to end the session +1.3% higher. Gold volumes across Comex were close to double that of the average as the metal broke through the key USD $1,350 and $1,358 resistance levels to a USD $1,362.00 session high print. ETF holdings continue to increase and are sitting at the highest levels since 2013, while we also see large open interest around the USD $1,350 strike level for the upcoming expiry, which should help to keep prices buoyant over the near-term. It was a similar story in Asian trade on Thursday as gold pushed through Wednesday’s New York high print as the greenback slumped to new lows. USD/China currencies collapsed to see the on-shore premium toward USD $9 relative to loco-London bullion and the metal was able to print a USD $1,366 session high before European names opened on the offer as the dollar gain traction. Resistance for the yellow metal cuts in toward USD $1,370, while supportive price action should sit broadly between USD $1,345 - $1,350. Silver’s recent malaise relative to gold looks to have ended with the metal climbing a staggering 3.3% on Wednesday. The grey metal was able to break out of a recent downtrend that cut in toward USD $17.40 and will now look to target resistance at USD $18.20 (Aug 2017 high) and USD $18.65 (April 2017 high).

 

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

DAILY REPORT : Tuesday 06 Feb 2018

MACRO: IHS Markit reported an upturn in U.S. service sector activity during January (final read), however the print was marginally down on December’s reported increase. The U.S. services PMI registered 53.3 during January (exp: 53.3), unchanged from an earlier estimate, however softer than December’s 53.7. Job creation remained solid, while new orders posted the fastest rise since September. The Institute for Supply Management reported continued growth within the U.S. non-manufacturing sector during January, seeing the ISM non-manufacturing index jump to 59.9 (exp: 56.7) from December’s 56.0. U.S. stocks were once again under pressure on Monday, with the DJIA recording its worst single-session performance in history on the way to a -1,175.21 point rout. Broad based weakness saw the major bourse’s lower as the Cboe Volatility index surged an astonishing 115% to 37.32, the highest level seen since August 2015. The DJIA plummeted a staggering -4.6% to 24,345.75 points, a result ‘flattered’ somewhat by a late session bounce after trading as much as -5% down in the final hours of trade. The S&P 500 saw all eleven sectors lower led by financials to slump -4.1% and close at 2,648.94 points, while the Nasdaq Composite posted a -3.78% fall. Following Tuesday’s move both the DJIA and the S&P 500 have slipped into negative territory for the year. Treasury yields continued to strengthen during early session trade as the 10-year yield touched a high of 2.883%, however a late flight to safety saw it decrease to around 2.70%. The Greenback saw further strength on Monday, adding around +0.4% (DXY) against majors, with notable gains against the euro as the pair declined around -0.6%. The dollar did however struggle against the safe-haven yen, collapsing close to -1%.

PRECIOUS: A big session for bullion on Monday in New York, buoyed by the collapse in equity markets and softer treasury yields, the metal ripped higher late in trade to break back above USD $1,340. The flight to safety was well and truly on during U.S. hours, with the decline to equity markets, the traditional haven assets such as U.S. treasuries (prices), the Japanese yen and of course the precious complex were well bid. Asian hours saw the session low with a brief but well supported test underneath USD $1,330, while European interest piggybacked a softer dollar to instigate a fairly orderly ascent and print a USD $1,338 high into the New York open. Early dollar interest capped further bullion gains in early U.S. trade, however an accelerated equity market sell off into the close as the VIX index hit a near 30-month high kicked off a further round of buying, propelling gold through USD $1,340 to book a +0.6% gain. Gold vols have ticked higher from what we saw yesterday, with 1m now sitting toward 10.45, 3m at 11.0 and 12 month a touch over 12.

Asian trade on Tuesday saw a relatively muted open as mild profit taking restricted further gains, however bullion soon returned to the overnight volatility as Asian equities followed the overnight U.S. lead sharply lower and U.S. equity futures markets plummeted. In lieu of dollar moves, the global equity market weakness underpinned interest in the precious, sending gold to a USD $1,346.10 session high, while afternoon flows although softer, continued to see an underlying bid tone keep the metal buoyant above USD $1,340. Gold positioning, although recently lightened does still lend itself to further position squaring, notably with regards to the recent build in longs should we see a reversal to the recent stock market weakness (longs at around 65% of all-time high). That being said, we may see further moves out of equities should the recent weakness persist, lending itself to a reallocation of funds into safehaven assets and further precious gains. Expect USD $1,340 to initially provide support for the metal, while stronger support around USD $1,330 - $1,335 will act as a pivot point over the near term. Bulls will be focusing on a sustained break above US $1,350 for a test toward the late Jan high around USD $1,365.

 

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 31 Jan 2018

MARKETS/MACRO: Markets had a more risk-off feel overnight led by equities and commodity prices. A combination of profit taking into month end, higher bond yields, stretched valuations and a potential US health-care shake-up seemed the main drivers. The Dow Jones Industrial Average slumped -362.59 points, or -1.37%, to 26,076.89, the S&P500 sold off -31.10 points, or -1.09%, to 2,822.43 and the NASDAQ Composite retreated -64.025 points, or -0.86%, to 7,402.48. The best performing sector was Utilities (+0.3%) and the worst performing sector on the day was Healthcare ( -2.1%). European equities mirrored losses across global markets, as investors grew increasingly concerned about a sharp rise in U.S bond yields and its impact on the cost of borrowing. The Euro First 300 Index sank -13.01 points, or -0.83% to 1,557.84 and the Euro Stoxx 600 gave back -3.68 points, or -0.92% to 396.12. Commodities were down across the board, as investors turned cautious ahead of week full of political and economic events. This saw a sell-off across most asset classes. Industrials and precious were the hardest hit, while energy was not far behind. Crude oil prices fell sharply (WTI -$1.8% to $64.38) as a weaker USD combined with traders increasing doubts over the continued draw-down in inventories in the US. A survey by Bloomberg showed that investors are expecting to see a 900k b/d increase in crude oil inventories in the U.S last week. Increasing US output is also starting to weigh on the minds of traders, despite OPEC continuing to work on reducing their production cuts. This was highlight by Exxon Mobil’s announcement that it will triple production from the Permian Basin to around 600k b/d over the next few years. Overnight the move higher in yields continued and is starting to be a concern for risk assets with VIX on the rise. Not even a 400 point swoon in the Dow at one point could turn U.S treasuries positive on the day and is another signal that developed bond markets have entered a new (bearish) regime with global growth strong and central banks looking to normalise. The U.S 2y note rose +0.6bps to 2.124% and the 10y bond was up +2.6bps to 2.718%.

On the data front, the U.S Conference Board's measure of consumer confidence rose above expectation to 125.4 during January (123.0 expected), while the previous month was upwardly revised by +1.0 to 123.1. Lynn Franco, the Economics Director at the board noted, "Expectations improved, though consumers were somewhat ambivalent about their income prospects over the coming months, perhaps the result of some uncertainty regarding the impact of the tax plan". The up-beat sentiment suggests real consumption growth will kick-start 2018 strongly. Across the Atlantic, German HCPI undershot expectations to its lowest rate in 14 months at +1.4% YoY (+1.6% expected, +1.6% prior). This will raise down-side risks to already low expectations for the Euro Zone preliminary CPI tonight. Core measures will be important to watch, but continue to highlight ECB rate hikes are a distant prospect. Euro Zone activity remained bright, with Q4 GDP at +0.6% QoQ, or +2.7% YoY (upward revisions to Q3 also from +0.6% to +0.7% QoQ).

PRECIOUS: It was a volatile session for gold Tuesday, selling off throughout Asia and testing towards last Friday's lows, before shooting higher in Europe ($1349.00) and then giving it all back in NY - ultimately closing down slightly on the day. In Asia we opened yesterday around $1341 and gold steadily declined toward $1338.50 in the lead up to the Shanghai open. The Chinese futures market opened with a healthy $8-10 premium, and initially propped up the spot market, the metal trading back through $1340 briefly. Shortly after however, both gold and silver took it's cue from a rising U.S 10y rate (2.7%) and dipped back sharply to trade sub $1335 late in the Asia am. The metals, despite moderate and persistent buying from China into the pm session, remained suppressed throughout the afternoon. During early Europe the yield turned around and the dollar was also widely sold, which prompted an influx of short covering in gold, lifting the metal fairly sharply back to $1345. Gold rallied at the NY open to the days high ($1349), yet quickly turned once the better than expected consumer confidence figure was released, failing to catch a bid for the majority of the rest of the session despite the soft equity markets. In the end it was a bit of a disappointing performance for gold given the wide-spread risk off move, closing down -$2.50 on the day at $1338.50. Coming into month end there will likely see some volatility in FX, which we expect will translate over to precious. This coupled with some important releases over the next 24 hours (Trump SOTU address, FOMC, Euro Area CPI) could mean a bumpy ride today. On the down-side for gold the Friday cycle low of $1342.50-3.50 area will be important, while $1350 will prove a hurdle to the topside. Elsewhere, palladium had a horror session Tuesday. After trading above $1090 in early NY, heavy spec liquidation prevailed in a thin market and the grey metal traded one way to a low of $1053 (-3.8% off the high). Support was found around the 50 dma ($1054.50) closing just off that at $1057.

Price action was more subdued across the precious metals complex today. Gold opened up around $1338 and slowly plodded along into the SGE open confined to a $2 range ($1338-1340) trading modest volume. Shanghai investors and banks were again on the bid, even though the premium was a touch lower at $7-9 over spot. Gold continued to trade the range leading up to the SOTU address from Trump. There was not a great deal that happened around this, although the dollar did come off a bit towards the end of his speech which pushed the yellow metal through $1340. It appeared there were a few stops tripped there as the metal ran swiftly up to $1341.50 and remains around those levels as I write. Silver and the PGM's are all exhibiting modest gains on the day so far.

On the data front, Australian Q4 CPI came in weaker than expected with Headline coming in at +0.6% QoQ (+0.7% expected), +1.9% YoY (+2.0% expected) and Core at +0.4% QoQ (+0.5% expected), +1.8% YoY (+1.8% expected). Overall the data disappointed again as ongoing headwinds for inflation gain traction. AUD initially dropped 45 pips to 0.8054 lows before recovering partially to 0.8070. China's January manufacturing PMI was released shortly after this coming in below expectation at 51.3 (51.6 expected, 51.6 prior), while Non-Manufacturing PMI was improved to 55.3 (54.9 expected, 55.0 prior). At time of writing President Trump has just finished his State of the Union address, which focused on bringing back manufacturing to US shores, working on an immigration reform bill and talking up his tax reform. Markets didn't really react to his speech, the dollar tapering off mildly towards the end of the address. Quite a bit of data expected today including - Euro Zone CPI, German employment, Canadian GDP and U.S FOMC rate decision, ADP employment, pending home sales, Chicago PMI and mortgage applications.

 

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

DAILY REPORT : Wednesday 24 Jan 2018

MARKETS/MACRO: Markets focused on upcoming U.S corporate earnings with a lack of significant data and the US government shutdown largely ignored. Rosy views on earnings has continued to aid equities this month, with major U.S indices lifting to new record levels and European bourses also climbing. The Dow Jones Industrial Average closed mostly unchanged Tuesday down -3.79 points (-0.01%) at 26,210.81, the S&P500 was modestly higher up 6.16 points (+0.22%) to 2,839.13 and the NASDAQ Composite added +52.257 points (+0.71%) to 6,885.20. The best performing sector on the day was Telecom Services (+1.78%), while the worst performing sector was Materials (-0.53%). European indices were also improved, the Euro Stoxx 600 up +0.70 of a point (+0.17%) to 402.81 and Euro First 300 edging up +1.87 points (+0.12%) to 1,582.91. Regionally the DAX was strong up +0.71%, FTSE100 inclined +0.21% and the CAC40 dipped -0.12%. Crude oil prices rose sharply as the market continued to react positively to the reports that OPEC wants to extend the current cooperation on output into 2019. Growing expectations of another strong draw-down in inventories in the U.S also helped support prices. A Bloomberg survey shows that the market is expecting a 2 million barrel fall in US crude stockpiles, which would put them at a 2 year low. The WTI March contract rose +$0.60, or +0.91% to $64.47 a barrel on the day. For treasuries the curve flattened somewhat, with the U.S 2y yield rising 0.03 bps to 2.065% and the 10y down -0.17 bps to 2.658%.

In the first volley before the World Economic Forum Donald Trump imposed tariffs on imported solar panels and washing machines. Outside of stepping away from the TPP, this was the first real shift from protectionist rhetoric to actual action against China and others. This gave investors another excuse to sell the Greenback overnight with the DXY closing at new multi-year lows. EUR is threatening to overcome 1.2300 with German ZEW survey and Eurozone consumer confidence both reaching new cycle highs. Similarly, GBPUSD closed around 1.4000, with the backdrop of a potential soft Brexit outcome and a weak $ which has seen 1m risk reversals trading at a 5 year high according to Bank of America.

It was a quiet day in terms of data on Tuesday. The Richmond Fed manufacturing index ended up conforming to the moderation trend of other manufacturing indices in December, printing at 14 (19 expected, 20 prior). This decrease resulted from a decline in both shipments and employment. The third component, new orders, held steady. However, manufacturing firms saw an increase in backlogs in January and they expect growth to strengthen in coming months. There was more positive data out of Europe with the Euro Zone consumer confidence figure coming in at 1.3, much better than the 0.6 expected and 0.5 figure prior in December. Elsewhere Germany’s ZEW survey came in at an eight month high. The current conditions jumped to a record high of 95.2 and future expectations rose to 20.4 too. The rise likely reflects strong export prospects for German firms both within Europe and further abroad, which is currently superseding political uncertainty, a stronger Euro and higher oil prices for now.

PRECIOUS: Gold continued to rise higher Tuesday, buoyed by the softening USD and uncertainty regarding international trade, as Trump imposed international tariffs on imported solar panels and washing machines. Gold opened the day around $1333.50 and after a brief downturn, ran higher into the Chinese open. USDCNY tested lower after the fix and some good two-way flows were seen on the SGE as a result. The flows were primarily real money / producer clients who were sitting on the offer vs Chinese banks who were looking for bids, with the SGE premium stable around USD $8-9. The decent flows continued into the Asian afternoon with the spot price remaining firm between $1335-$1337.50. Flows were again mixed during the European day and limited to a tight $4 range until we moved into the U.S open. Gold was quickly sold off after the NY open to the tune of $5-6, down to the days lows, which was right around option expiry time with a heavy strike at $1332. Some 9 mio oz went through the market during this period according to traders and the market remained suppressed for 30 minutes or so. Not long after however, a headline "Pence says to deliver 'America First' message at Davos", combined with Trump announcing the aforementioned tarrifs, saw the USD sell off rather rapidly. This was supportive for gold and the metal quickly reversed back to the earlier intra-day highs around $1339. As the afternoon wore on good buying flows through Comex were seen and the metal pushed through $1340 and up to a late peak of $1341.70, then closing just shy of this. Interestingly, the gold has shrugged off any correlation to moves in equities and rates for the time being and is moving more in sync with the dollar. Given that the sell-off in USD looks to continue, for the time being, we see conditions remaining supportive for the metal. Initial support sits at $1330, while resistance is the previous YTD high around $1344-45. Gold ETF's continue to see inflows, with the SPDR's holdings increasing 13 tons since the start of January, a similar scenario seen with silver which is also a factor keeping the metals supported.

It was a quieter day in Asia today, with the underlying demand from Chinese banks keeping gold bid. We opened and initially pushed higher, inching through the previous days high to a peak of $1342.10, however, there were some thick offers in Comex above there. Producers were also eager early sellers happy to cash in on the overnight advance. When China opened up for business there was an initial dip in the spot market, accompanied by a brief sell-off in the SGE in light of a slightly lower premium ($7-8). This did not last long however, with Chinese banks again quick to buy the dip and curb any further decline. It was mainly moderate sized two-way flows thereafter with spot gold holding above $1340 throughout the afternoon. In other markets, equities were generally lower with the Hang Seng (-0.3%), Nikkei (-0.5%) and Shanghai Composite (-0.05%) all currently in the red. WTI crude is flat at $64.45, the dollar is weaker again across the board (USDJPY -0.4% or -45 pips, GBPUSD +0.3% or +40 pips, EURUSD +0.2% or +26 pips) and base metals are firmer. On the data calendar today look out for Euro Zone and U.S preliminary manufacturing, services and composite PMI's, UK employment figures and U.S existing 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 : Monday 05 Feb 2018

MACRO: Jobs data released out of the U.S. on Friday showed an addition of 200k payrolls during January (exp: 180k) to follow an upwardly revised 160k the month prior. The jobless rate held at 4.1% to match the lowest rate since 2000, while average hourly earnings increased +0.3% MoM (exp: +0.2%) to see the annualised figure to +2.9% YoY, the strongest print since 2009. Factory orders in the U.S. outpaced expectations during December to increase +1.7% (exp: +1.5%) from an upwardly revised +1.7% during November (prev: +1.3%). U.S. equities tumbled on Friday to continue recent weakness, seeing the DJIA underneath 26,000 to mark the worst points decline in a session since December 2008. The bourse ended the session -2.54% lower at 25,520.96 points to book a -4.1% weekly decline, while the S&P 500 saw all eleven components end in negative territory as the bourse ended -2.12% down on the session and -3.9% on the week. The greenback saw broad-based gains on Friday following the U.S. jobs data, with the DXY spiking +0.65%.

PRECIOUS: Following Friday's volatile U.S. session, bullion held a relatively narrow range to start the week in Asia as the recent dollar rally took time out to consolidate gains. The yellow metal handed back around -1.2% last week after breaking to Friday's low of USD $1,327.50, testing top-side resistance at USD $1,350 on multiple occasions over the week, however sent ultimately lower at the hands of a bid dollar and higher treasury yields. Early session weakness on Monday around the Chinese open saw bullion briefly test underneath USD $1,330 with little change to the on-shore premium, while afternoon pricing saw a modest pick-up in interest, however still hold rangebound. Vols have firmed marginally, however continue to remain low with 1m sitting around 10.3, 3m at 10.8 and 1 year just over 12. ETF's reported out-flows on Friday of around 100k ounces, while the latest COTR indicates a lightening in gold positioning as longs head for the exit. Expect broad support underneath USD $1,330 to USD $1,325 and at USD $1,315 below this, while resistance cuts toward USD $1,345.

 

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 30 Jan 2018

MACRO: U.S. personal income rose +0.4% MoM during December (exp: +0.3%) to follow a +0.3% increase during November, while personal spending increased +0.4% to be in-line with expectations. The robust print however came at the cost of savings, which fell to a 10-year low of 2.4% from 2.5% previously. The Federal Reserve’s preferred measure of inflation, the personal consumption expenditures price index (core PCE) increased +0.2% MoM (exp: +0.2%) to see the annualised figure hold at +1.5% YoY during December. The Dallas Fed manufacturing index of general business activity jumped to 33.4 during January (exp: 25.4) from a 29.7 read the month prior. January’s gains were largely attributed to strength across shipments (27.1 from 21.5 previously) and prices received (22.3 from 17.9 previously). U.S. equity markets tumbled on Monday as yields on the benchmark 10-year treasury note jumped above 2.7% to mark the highest level since April 2014. The DJIA sunk -0.67% to 26,438.48 points as Caterpillar Inc. (-2.7%) and Apple Inc. (-2.07%) saw the bourse to its worst single session result since September, while the broader S&P 500 saw heavy trade to energy stocks (-1.5%) also take the bourse -0.67% lower to 2,853.53 points. The Nasdaq composite didn’t escape unscathed either, shedding -0.57% to 7,466.505 points. Wall street’s ‘fear gauge’ the VIX jumped to the highest level in 5 months on Monday, surging nearly 25% to 13.84. Oil futures pulled back from recent highs on Monday, with the U.S. benchmark WTI handing back -0.9% following an increase in the domestic oil rig count by 12 to 759.

PRECIOUS: Higher treasury yields underpinned a bid session for the greenback on Monday, seeing the DXY around +0.33% higher to weigh upon bullion. Early Asian session weakness was compounded in late European / early U.S. trade as the yellow metal declined through USD $1,345, before further extending underneath USD $1,340 late in trade. CFTC positioning continues to increase, however the pace at which these increases are occurring has slowed. ETF demand remains elevated with further inflows recorded on Monday (holding +1.4% YTD), while vols remain firm out to 3m, with 1m extending to 10.25. Following a sluggish start, interest through Comex (J8 now most active) picked up on the break below New York’s low print, as dollar driven weakness provided an opportunity for bargain hunters. We continue to see interest on dips, particularly around the fib retracement level (Dec low – Jan high) of USD $1,335.50, however should further weakness become evident we are likely to stretch long positioning and could see an extension toward USD $1,325 or even USD $1,315. Although the FOMC are not expected to hike rates this week (rather in March) it will be interesting to see what language the committee uses in their statement, with many expecting a more hawkish bias that could give the greenback a boost and keep bullion under pressure. Silver continues to head toward another test of USD $17 following Monday’s -1.6% move. The grey metal should see broad interest around USD $17.10 - $17.15, however may be setting up for a move through the figure like we saw only last week. After a break of the important USD $1,000 level in New York (only to recover back through the figure), platinum has once again succumbed to selling pressure to trade sub USD $1,000 during Asia today, while palladium has been offered throughout afternoon pricing but thus far has held the New York low 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 23 Jan 2018

MACRO: US President Donald Trump signed a short term spending bill that will ensure the government is funded through to 8th February. Senate Democrats agreed to support the legislation in exchange for the promise of a future Senate vote on immigration, US equities pared early losses to finish ahead on the news that the Senate had voted 81-18 to pass the funding bill. The three major bourses posted fresh record highs, the Dow added 142.88 points, or 0.55%, to 26,214.60; the S&P 500 put on 22.67 points, or 0.81% to 2,832.97, while the Nasdaq climbed 71.652 points, or 0.98%, to 7,408.032. There were big wins for telecoms (+2.35%), energy (+2.10%), while materials (-0.21%) led the laggards. European shares were mixed, the EuroSTOXX rose 1.23 points, or 0.31%, to 402.11, the German DAX gained 29.24 points, or 0.22%, to 13,463.69, and the London FTSE 100 shed 15.35 points, or 0.20%, to 7,715.44. In the currencies, the US dollar index eased 0.18% to 90.407, the EUR traded up to 1.2263, while USD/JPY was as high as 111.18. US treasury yields were mixed, the 2 year yield rose 0.03 bps to 2.0650% and the 10 year yield lost 0.17 bps to 2.6575%. In commodities news, oil prices were higher as Brent added 0.76% to $69.13 and WTI firmed 0.19% to $63.49. Base metals were mostly higher, with aluminium (+1.31%) the biggest mover. In US economic data, the Chicago Fed National Activity Index rose to 0.27 in December from a downwardly revised 0.11 in November. In Asia today, as I write the Nikkei is at +0.90, the Shanghai composite is at +0.64%, the Hang Seng at +1.14%, and the ASX S&P 200 is at +0.75%. Tonight we have the ZEW Economic Sentiment Index and Consumer Confidence (Flash) out of the Eurozone.

PRECIOUS: Range-bound session for the precious as investors digest the news out of Washington. Gold opened at $1334 in Asia before dipping to hover around $1330-32 through the afternoon. The SGE premium was elevated at $8-9 though this only translated to fairly modest buying out of China. The market dipped below $1330 just prior to the London open but quickly recovered to trade around $1331-3 through the AM session. News of the government shutdown ending sent USD/JPY rocketing through 111 in early NY hours, but the yellow metal managed to hold well around $1331 and finish up at $1335. Silver had a slightly choppy run to finish right on the psychological $17 level. The biggest moves of the day were in the PGMs, platinum was dumped through the $1000 level during NY hours to a close at $996, while palladium was sold heavily to the days low of $1084 before an impressive bounce up to $1095. The Philadelphia gold and silver index added 0.38%. The SPDR gold trust holdings were unchanged at 846.67 metric tonnes. In todays trading, gold picked up a few dollars off the open to trade around $1335-36, with the SGE premium is around $7-8 over loco London. The yellow metal is at $1335.80 as I write. Silver is trading back above the $17 level, the grey metal sits at $17.01 as I write. PGMs are flat. Gold should see first support level at overnight low of $1331, with initial resistance expected at the recent highs of $1343 closely followed by the psychological $1350 mark, a consolidation above that level could be the signal for a push higher.

 

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.