DAILY REPORT : Wed 25 July 2018

MARKETS/MACRO Risk traded broadly higher last night, continuing the momentum from the previous session as stronger U.S earnings saw the S&P etch out another moderate gain while UST's remained relatively stable. We saw the dollar take a step back against most G10 pairs with firming commodity prices helping AUD and CAD higher while trade tensions remained in focus ahead of today’s meeting between President Trump and European Commission President JeanClaude Juncker. The US president fired off a series of tweets last night and this morning calling for the EU to drop all tariffs and trade barriers while also tweeting that tariffs are the ‘greatest’. U.S. stocks pared early gains, but were still trading higher on the day, powered by a number of positive earnings results, including the parent company of Google that posted results that came in much stronger than expected. The Dow Jones Industrial Average gained +197.65 points (+0.79%) to 25,241.94, the S&P500 advanced +13.42 points (+0.48%) to 2,820.40 and the NASDAQ Composite remained flat, inching down -1.105 points (-0.01%) to 7,840.768. The best performing sector intra-day was Telecom Services (+1.76%), while the worst performing sector was REITs (-0.32%). European equity markets enjoyed one of the best daily climb's since late June amid well received corporate results (Peugeot +15.0% / UBS +4.3% / Randstad +3.9%) and improved manufacturing data. The EuroFirst 300 jumped +13.55 points (+0.9%) to 1,521.21 and the Stoxx 600 index gained +3.3 points (+0.86%) to 388.18. Regionally the DAX ran +1.12%, FTSE100 +0.7% and CAC40 +1.04%. Crude oil prices rose as investors become increasingly confident that inventories would continue to fall. A Bloomberg survey showed that the market is expecting a draw-down of around 3m barrels in the U.S last week. WTI crude rose +$0.63 (+0.9%) to $68.52 and Brent rose +$0.74 (+1.0%) to $73.80. Fixed income markets treaded water yesterday, with the U.S 10y yield down -0.55 bps to 2.948% and 2y yields up +0.44 bps to 2.633%.

On the data front the IHS Markit U.S Manufacturing PMI edged up to 55.5 in July from 55.4 in June and above market expectations of 55.4, flash estimates showed. The reading pointed to a slightly stronger growth of the manufacturing sector amid a robust rise in new orders and a solid upturn in both production volumes and employment. IHS Markit U.S Services PMI however, dropped to 56.2 in July from the previous month's 56.5 and below market consensus of 56.5. Still, the latest reading signalled a robust rise in service sector output, due to another sharp rise in new business intakes. Also, backlogs of work fell for the first time since April 2017 and business optimism regarding the outlook for the year ahead improved, while employment growth eased to a six-month low. On the price front, input cost inflation remained high and prices charged rose the most since the survey began in October 2009. In the Euro Area, IHS Markit Eurozone Manufacturing PMI rose slightly to 55.1 in July from the previous month's 19 month low of 54.9, and above market consensus of 54.6, while the services PMI fell to 54.4 in July from a four month high of 55.2 in June, and missing market expectations of 55.

PRECIOUS Gold closed the session almost unchanged yesterday, the metal still floundering around towards the recent lows and still trading beneath the 200 dma on the weekly chart ($1234.30). Asia opened around $1225 Tuesday, with the metal initially sagging as the USD strengthened against a number of G10 currencies. USDCNH also began to surge an hour prior until the the SGE open, running from 6.8130 to 6.8330 by the time Shanghai opened for business. The pair continued it's upward trajectory to hit a peak of 6.8446, with gold struggling and trading back towards $1220.50 after the opening half-hour of Shanghai trade. Chinese banks were good sellers by volume, with the on-shore SGE premium soft at around $1.75-2.25 over the loco London price. The gold continued to sell-off over the Asia afternoon, falling through $1220 to an intra-day low of $1218.50. It bounced once European traders came, partially due to the USD easing and partly due to some early profit taking. USDCNH did a sharp about face and the yellow metal continued to climb hitting the days pinnacle of $1229.10 just after U.S traders kicked off their day. There was still plenty of visible selling around $1230 cash on COMEX, which prompted some selling later in the day, the metal then remained quiet between $1224-1226 into the close. Gold seems to be trying to find a base at present, so we feel a little bit of work is likely to be done between $1205-1235 in the coming week or so. Further, we feel a break and close below/above either of these levels will likely build momentum in their respective directions. This week has seen some positive inflows for ETF's after a month of heavy liquidation, which when coupled with COMEX spec short positioning sitting at multi-year highs, may finally be giving bulls some form of encouragement. Elsewhere, Swiss gold exports to China during H1 2018 came in at 274.7 tons compared 299.8 tons exported to China for the whole of 2017. This suggests a major change in the way the Chinese are sourcing imports, with more direct imports and less indirect imports via HK. PGM's had a strong rally throughout the day yesterday on the back of strength in base metals, after Beijing signalled that it is prepared to defend growth and has shifted its policy stance away from the original de-leveraging and towards fiscal stimulus. The rally did not last however as there was some eager profit taking into the back-end of NY. Both Pt and Pd did manage to close in the green on the day though. It was a slow day for the precious complex today, gold remaining confined to a tight $3 range for the majority. Light two-way trade was seen during the lead up to Shanghai, with the gold slowly making its way a few dollars higher. The SGE opened and was very quiet throughout the morning, with the premium remaining at the low end of the recent range and generating little in terms of interest. Light selling was seen throughout the backend of the Asian AM session, but there was no real follow through and we held around $1224, after dipping to the lows. As I write we have ticked up to the days highs with early European traders showing mild demand. Not a great deal to report today. Ahead on the data calendar, look out for German IFO and U.S new home sales and mortgage applications as well as the Trump Juncker meeting.

 

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 19 July 2018

MARKETS/MACRO US equities were mostly higher after a strong showing by the banks. The Dow added 79.40 points, or 0.32%, to 25,199.29, the S&P 500 rose 6.07 points, or 0.22% to 2,815.62, while the Nasdaq inched lower 0.674 points, or 0.01%, to 7,854.444. There were wins for financials (+1.53%) and industrials (+1.13%) while consumer staples (-0.65%) led the laggards. European equities were higher, the EuroSTOXX advanced 2.08 points, or 0.54%, to 387.06, the German DAX rallied 104.4 points, or 0.82%, to 12,765.94, and the London FTSE 100 gained 49.95 points, or 0.65%, to 7,676.28. In the currencies, the US dollar index firmed 0.09% to 95.07, the EUR was as low as 1.1614, while USD/JPY traded down to 112.78. US treasury yields were mixed, the 2 year yield lost 0.61 bps to 2.6093% and the 10 year yield rose 0.92 bps to 2.8692%. Oil prices were higher, Brent rose 1.15% to $72.99 while WTI gained 1.00% to $68.76. Base metals were mostly lower, with nickel (-1.32%) taking the biggest hit. In US economic data, housing starts dropped to a seasonally adjusted annual rate of 1.173 million in June from 1.337 million in May. Building permits fell to an annual rate of 1.273 million in June from 1.301 million in May. The Federal Reserve's Beige Book showed that 11 out of 12 regions in the US were growing at a modest rate or faster. However, growth was being curtailed by a shortage of skilled workers and a rise in the costs of some raw materials. In Asia today, as I write the Nikkei is at +0.02%, the Shanghai composite is at -0.49%, the Hang Seng is at +0.01%, and the ASX S&P 200 is at +0.36%. On the data front tonight, we have weekly jobless claims, the Philly Fed index, and leading economic indicators out of the US.

PRECIOUS A flat session for the precious as the metals claw back early losses. Gold opened near the previous day's low at $1227 in Asia and came under pressure as USD/CNH traded higher. The metal was sold to a fresh low of $1222 despite an SGE premium of $1-2 prompting some onshore buying. The London AM session saw the market move lower still, touching $1221 as USD/JPY went above 113. NY trading was kinder to the yellow metal, recovering all the early the losses to trade around up to $1227 in the afternoon and close flat. Silver posted a 2 year low $15.42 before paring the early losses. PGMs recovered to finish at $817 and $906 respectively. The Philadelphia gold and silver index added 0.17%. In today's trading, gold popped up to the day's high $1228.30 early on but faced a sell off once USD strengthened against the yen. The yellow metal printed a low of $1221.00 and is slightly higher at $1221.80 as I write. Silver slumped to a low of $15.38 and is currently sitting at $15.39. Palladium is flat while platinum is at near the lows at $807. Gold should find first support at yesterdays low of $1221, with the psychological $1200 level to follow. Resistance at $1229 with this weeks high of $1245 above that. 

 

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

DAILY REPORT : Friday 13 July 2018

MACRO: Consumer prices in the U.S. increased +0.1% MoM during June (exp: +0.2%), while on an annualised basis prices increased +2.9% YoY to mark the biggest gain since February 2012. Excluding the volatile food and energy components prices increased +0.2% MoM (exp: +0.2%), lifting the annualised figure to +2.3% from +2.2% previously, marking the largest rise since January 2017. Initial jobless claims in the U.S. decreased by 18,000 to 214,000 (exp: 225,000) during the week ended July 7. The weekly print saw the four-week moving average ease 1,750 to 223,000, while continuing claims fell 3,000 to 1.73 million. Trade concerns were cast aside on Thursday as equity markets in the U.S. booked solid returns on the back of technology gains. The DJIA added +0.91% to 24,924.89 points, while technology stocks (+1.79%) led the S&P 500 +0.87% higher to 2,79.29 points as 10 of eleven components of the bourse ended higher. The Nasdaq Composite was the stand out, jumping +1.39% to a record closing level of 7,823.916 points. The greenback booked a modest advance on Thursday, notably hitting a fresh six-month high against the yen. The DXY index gained around +0.1% as the buck added +0.5% against the yen, while easing against the Chinese currencies.

PRECIOUS: A relatively subdued session for bullion on Friday in Asia, while the greenback continued to make ground against majors to weigh upon the metal. Modest gains in early Chinese trade saw bullion break briefly through USD $1,248 as USD/CNH declined underneath 6.6700, however notably USD/CNY turned well bid to temper early session gains and drag the metal lower. Price action continued to be dictated by dollar flows throughout the afternoon as a strengthening greenback saw gold slide underneath USD $1,245 leading into London hours. The metal continues to see interest toward USD $1,237 - $1,240 to provide supportive price action, however is likely to remain within its recent range, still unable to make any meaningful top-side gains as the dollar reigns supreme. ETF flows are also creating headwinds for the metal, with a further decrease of 140,000 ounces on Thursday. Silver was unable to recapture the USD $16 handle today and looks to target down-side support toward USD $15.80, while both platinum and palladium turned offered in afternoon trade.

 

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 24 July 2018

MARKETS/MACRO Overnight news out of the White House has seen President Donald Trump lash out at Iranian President Hassan Rouhani in an all-caps tweet. The tweet in which President Trump warns Rouhani to “NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE.” was in response to comments made by Rouhani in Tehran regarding alleged hostile policy by the U.S. toward Iran. Existing home salesin the U.S. booked a third consecutive monthly decline during June,sliding -0.6% MoM (exp: +0.2%) to a seasonally adjusted annual pace of 5.38 million. The number of homes on the market has increased only +0.5% YoY to 1.95 million, while median sales prices in June were +5.2% YoY higher at USD $276,900. During June, sales declined in the West and South but were higher in the Midwest and Northeast. The Chicago Fed National activity index rebounded during June, printing +0.43 (exp: +0.25) from a downwardly revised -0.45 in May (prev: -0.15). Production related indicators contributed +0.36 points to the index to underpin the headline figure. Equity markets in the U.S. ended mixed on Monday, largely supported by financial and tech names. The DJIA eased -0.06% to 25,044.09 points as a -1.54% decline to 3M Co. weighed upon the bourse. The S&P 500 added +0.18% to 2,806.98 points, however only financials (+1.32%), technology (+0.52%) and healthcare (+0.24%) were able to end in positive territory, while the Nasdaq Composite outperformed to post a +0.28% gain to 7,841.87 points. The greenback started the week on a positive note as participants put to one side President Trump’s commentsregarding the dollar made late last week. The DXY index added +0.2% to push back above 111.00 against the yen, while also strengthening further against the yuan. Treasury yields spiked on Monday to see both the 10 and 30-year yields at the highest level in 6-weeks, while the two-year gained 3.4bpsto 2.633%, the highest level since July 2008.

PRECIOUS Gold continued to trade heavily during Asian trade on Tuesday as dollar headwinds pressured the metal lower. Early offers out of Japan saw the metal test the New York low around USD $1,222, with mildly supportive bids restricting further declines. Once again USD/China turned sharply bid on the Shanghai open to trigger a stop loss run toward USD $1,220, however the dollar tempered somewhat following the initial move to provide a period of respite. Afternoon flows saw a brief move underneath USD $1,220, however once again supportive price action restricted further declines and the metal soon pared losses into London hours. With gold positioning still quite light we should continue to see supportive price action underneath USD $1,220, with extension through to USD $1,210 - $1,200 should the dollar strength continue. Notably ETF’s recorded inflows on Monday of 175k ounces, potentially removing some of the down-side bias we have seen in recent months. Top-side targets initially sit toward USD $1,230, while the key pivot point is USD $1,240. Silver failed to recapture the USD $15.50 pivot point after losing touch with the figure on Monday, while the white metals have remained robust, thus far trading relatively immune to the dollarstrength. Data releases today include Markit services/ composite / manufacturing PMI prints from France, Germany, the Eurozone and the U.S.

 

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 18 July 2018

MARKETS/MACRO Powell’s testimony last night in front of a Senate Banking committee was broadly positive for the dollar, strengthening against most G10 pairs, with USDJPY breaking above 113 as risk assets traded on a firmer footing. In his testimony, Powell reiterated his positive outlook for the US economy, noting that the best path forward is to keep gradually raising the Fed funds rate for now (without any firm commitment) and importantly remain flexible in the face of changing conditions. U.S equities welcomed Powell's stance extending its recent upswing, the DJIA rising +55.53 points (+0.22%) to 25,119.89, the S&P500 advancing +11.12 points (+0.40%) to 2,809.55 and the NASDAQ Composite gained +49.399 points (+0.63%) to 7,855.118. European equities advanced also as investors digested further corporate results and EUR softened against the USD. The Eurofirst 300 index advanced 3.87 points (+0.26%) to 1,506.94 and the EuroStoxx 600 climbed +0.93 of a point (+0.24%) to 384.98, while regionally the DAX rose +0.8%, FTSE100 +0.34% and CAC40 +0.24%. Crude ended the day softer, although did manage to curb some of the recent severe weakness with the WTI down -$0.45 (-0.66%) to $67.61 and Brent down -$0.16 (-0.22%) to $71.68 intra-day. Investor's focused on declining U.S stockpiles, with a BBG survey revealing that consensus is for a decline of about 4 million barrels later this week. This was offset however by several producers, namely Russia, Saudi Arabia and the U.S, reporting rising output. Elsewhere in the G10 space, cable fell close to -1% on the day to below the 1.31 handle as concerns over Brexit and the future of May’s government was firmly in the spotlight again.

Federal Reserve Chairman Jerome Powell reiterated on Tuesday that it was appropriate to follow the central bank’s plan to gradually increase interest rates, although he warned that uncertainty surrounding current trade tensions made analysis difficult. "With a strong job market, inflation close to our objective, and the risks to the outlook roughly balanced, the FOMC believes that, for now, the best way forward is to keep gradually raising the federal funds rate", he said in his semiannual monetary policy report to Congress. Powell indicated that he and his fellow policy-makers at the Fed believed that the job market will remain strong and inflation will stay near its 2% target over the next several years. He explained that financial conditions remained favourable to growth, that a stronger financial system was in a good position to meet the credit needs of households and businesses, tax and spending policies would likely continue to support the expansion, and the outlook for economic growth abroad remains solid despite greater uncertainties in several parts of the world. However, he admitted that "it is difficult to predict the ultimate outcome of current discussions over trade policy as well as the size and timing of the economic effects of the recent changes in fiscal policy".

On the data front U.S industrial output rose +0.6% MoM in June 2018, recovering from an upwardly revised -0.5% contraction in May and matching market expectations. The production of motor vehicles and parts rebounded last month after truck assemblies fell sharply in May because of a disruption at a parts supplier. 

PRECIOUS Gold broke through the key support at $1236.50 yesterday (Dec 2017 low pivot) and crashed to a low of $1226.50, as heavy macro and ETF liquidation took its toll. Gold opened on soft footing in Asia yesterday with topside Comex offers exuding pressure on the yellow metal above $1240-42 (cash). We dipped off following the Shanghai open towards $1237.50, although there were some bids under $1240 and ahead of the $1236.50 support which steadied proceedings. During early Europe there were some signs of resilience, the metal pushing back through $1240 and pushing as high as $1244.75, before early selling from U.S traders curbed any further advance. From there it was basically all one-way for gold, as ETF and Macro supply outweighed some very light physical demand. After holding 3 times since early July, the $1236.50 support level gave way as the USD rallied strongly - particularly vs. the GBP, JPY and EUR. Stops were tripped and the metal sharply sank toward $1230, recovering soon after back to $1234.50 only to be sold heavily by technical traders to fresh lows ($1226.50). The damage had been done prior to Powell's address and the metal sat quietly into the close either side of $1228 spot. Technically there is not a great deal of technical support now until we hit $1204.50 (July 2017 low), while we expect a decent amount of resistance on any move back toward $1230-1236.50. The break lower will likely draw out further ETF selling over the coming days, so we suspect gold will remain under pressure in the near term.

Gold opened this morning at $1228 and traded quietly sideways throughout the early morning, with bias remaining slightly skewed to the sell side. Once China stepped in, there was some light demand from them although given the premium on the SGE was little changed despite the fall this was limited. Spot gold edged up a few dollars as a result but fell short of traversing $1230. Over the early afternoon we remained in a fairly tight range, although downside momentum began to pick up when China re-opened for their PM session and USDCNY and USDCNH began to rally. We broke through the overnight lows ($1226.50) and continued to $1225.00 where some two-way interest was seen. As early London traders walked in further liquidation was seen and so far we have traded to a low of $1222.70, with the whole precious complex feeling heavy. Nothing of note in terms of data in Asia today, although ahead today look out for UK CPI and PPI, EuroZone CPI and U.S Housing Starts, Building Permits and the Beige Book. Have a good day ahead.

 

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 12 July 2018

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

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

 

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

DAILY REPORT : Monday 23 July 2018

MARKETS/MACRO Equities in the U.S. ended modestly lower on Friday despite a number of positive earnings releases, with concerns over trade war headlines and comments from President Trump directed toward the Federal Reserve continuing to weigh upon investor appetite. The DJIA eased -0.03% to 25,058.12 points, while heavy trade to real estate (-0.92%) and utilities (-0.76%) saw the S&P 500 end -0.09% lower at 2,801.83 points. Over the week the DJIA notched a +0.2% gain and the S&P 500 inched just under +0.1% higher. The greenback was well offered on Friday following comments from President Trump accusing both China and the European Union of currency and interest rate manipulation. The DXY index ended the session - 0.7% lower to slip into negative territory on the week, notably seeing high volatility against both CNY and CNH after the PBOC weakened the yuan by the most in 2-years on Friday via the setting of their reference rate. The euro consolidated through 1.17 to add +0.7% on the session and the yen jumped close to +0.9%. Treasury yields in the U.S. saw a steepening of the curve as the 10-year added 5.5bps to 2.893% and the two-year held relatively unchanged at 2.593%. European markets finished lower on Friday as trade wars concerns were stoked by President Trump and the euro pushed higher. Declines to autos weighed upon equities in Germany to see the DAX end -0.98% lower at 12,561.42 points, while the Stoxx Europe 600 slipped -0.15% to 385.62 points. In the U.K. the FTSE 100 inched -0.07% lower as the pound reversed early weakness against the dollar to add +0.9% on the session.

PRECIOUS A positive session for gold on Friday after the metal was able to reverse previous session weakness and find support on the back of a softer dollar. It wasn’t allsmooth sailing for the yellow metal however, seeing early session weakness in Asia after the PBOC weakened the yuan by the most in 2-years. The initial dollar bid in Shanghai saw bullion turn sharply offered, breaking underneath USD $1,220 and extending to a session low of USD $1,215.70. The metal was able to climb back above USD $1,220 during the Chinese lunchbreak and continued to see interest in London to test shorts on a move back through USD $1,225. Further dollar declines in New York saw another round of short covering through USD $1,230 and the metal was able to close above the figure even amid good supply to end +0.7% higher on the session.

Asian trade on Monday saw mixed price action for bullion, extending briefly through USD $1,235 in early trade, however softening in China as the dollar regained footing amid once again volatile USD/China pricing. The early bid tone was largely driven by a leg lower to USD/JPY, moving underneath 111.00 following Friday’s weakness. Interest toward USD $1,230 has kept price action buoyant even as shortterm players look to take profit above the figure, while USD $1,240 looms as a key top-side pivot point. Recent price action suggests gold has been able to build a base around USD $1,220, however near-term risks of a reversal toward USD $1,210 - $1,200 are still in play. Gold vols have firmed following the recent price action, with 1m edging toward 10.6 as participants look for exposure following the recent weakness. The latest COTR data shows (week ending July 17) gold positioning has lightened further to sit at around 15% of the all-time high, while platinum positioning remains net-short to open up top-side potential. Data releases today include the Chicago Fed National activity Index 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 : Tuesday 17 July 2018

MARKETS/MACRO Retail sales in the U.S. improved +0.5% MoM during June (exp: +0.5%) to follow an upwardly revised +1.3% gain in May (prev: +0.8%). Core retail sales (ex auto, gas, building materials and food) were however unchanged during June to follow an upwardly revised +0.8% gain in May (prev: +0.5%). Equities in the U.S. started the week in mixed fashion, as investors considered the mixed retail sales data while also monitoring the meeting between U.S. President Trump and Russian President Putin. The DJIA held onto a +0.18% gain to 25,064.36 points, led higher by strong performances to the major banks. The S&P 500 eased -0.10% to 2,798.43 points as declines to energy (-1.18%) weighed upon the bourse, while heavy trade to tech names saw the Nasdaq Composite -0.26% lower to 7,805.719 points. The greenback softened on Monday ahead of Fed Chairman Jerome Powell's two-day testimony scheduled to begin on Tuesday. The DXY index declined -0.35% as the euro consolidated above 1.1700, while the USD/JPY pulled back toward 112.20. Treasury yields in the U.S. ticked higher to see the 10-year add 3.1bps to 2.858% and the two-year yield 1.9bps higher to 2.596%. Oil futures sunk on Monday following a report that the Trump administration is considering a release from the U.S. strategic petroleum reserves as a result of rising gasoline prices. Brent crude collapsed -4.6% to USD $71.84 per barrel, marking the lowest close for a mostactive contract since mid-April. WTI meanwhile declined -4.2% to end just above USD $68 per barrel, the lowest finish to a most-active contract in nearly a month. heavy trade to the big miners saw European markets generally lower on Monday. The Stoxx Europe 600 pulled back -0.25% to 384.05 points, the French CAC 40 fell -0.36% to 5,409.43 points and the German DAX 30 bucked the trend to book a +0.16% gain as Deutsche bank shares ripped +7.20% higher. In the U.K. the FTSE 100 declined -0.80%, largely due to weakness across mining and oil shares.

PRECIOUS Gold was unable to capitalise on a softer greenback during Monday's session, once again failing to see any safe-haven flows and holding a relatively narrow range throughout the session. The metal started the week on a positive note after seeing interest during Asian hours as USD/China softened, however failed to sustain a move through USD $1,245 and saw declines accelerate in New York. Once again bullion tested toward the important USD $1,236 - $1,237 support band, holding the level and seeing 2 modest late session interest to close above USD $1,240. Palladium was the main mover on Monday, handing back -2.2% following a break below the technically important USD $930 support, opening up potential for a further extension toward USD $900.

Gold struggled to pull away from the overnight low in early session pricing during Asian trade today, testing the depth of bids around USD $1,237 leading into the USD/CNY fix, before the dollar reversed early strength to underpin price action. The metal continues to see a level of interest underneath USD $1,240 and spent the afternoon well supported above the figure. Key down-side support remains around USD $1,236 - $1,237, while USD $1,245 will act as a top-side pivot point for an extension through USD $1,250. Expect participants to remain quiet leading into today's testimony by Federal Reserve Chairman Powell, with any rallies toward USD $1,245 to remain offered. Silver held the New York low today around USD $15.76 and extended higher in afternoon pricing, while the white metals remain heavy. Aside from Federal Reserve Chairman Powell's testimony today we also see U.K. employment data, U.S. industrial production and U.S. treasury flows.

 

 

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

 

 

DAILY REPORT : Wed 11 July 2018

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

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

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

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

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

 

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

DAILY REPORT : Friday 20 July 2018

MARKETS/MACRO President Trump weighed in on the recent dollar strength on Thursday, commenting that a strong greenback “puts us at a disadvantage”. Trump also discussed interest rate increases by the Federal Reserve, noting with reference to the increases that he is “not thrilled”, however he would not tell the Fed what to do. The comments saw an immediate reversal to the dollar, erasing earlier session gains to see the DXY index end flat after trading +0.6% higher in early New York.

Initial jobless claims in the U.S. fell by 8,000 to 207,000 (exp: 220,000) during the week ended July 14, marking the lowest reading since early December 1969. The weekly print saw the four-week moving average 2,750 lower to 220,500, while continuing claims increased by 8,000 to 1.751 million during the week ended July 7. The Philadelphia Fed business outlook survey jumped to 25.7 during July (exp: 21.5) from 19.9 the month prior, predominately led by strong gains to new orders. Equities in the U.S. opened sharply lower on Thursday as financial stocks were sold off following comments from President Trump regarding dollar strength. The DJIA snapped a 5-session winning streak to end -0.53% down at 25,064.50 points, while financials (-1.44%) led 9 of eleven components of the S&P 500 lower to see the bourse off - 0.40% to 2,804.49 points. The Nasdaq Composite slipped -0.37% to 7,825.30 points, while the small-cap Russell 2000 bucked the trend to post a +0.56% gain to 1,700.35 points. U.S. oil futures ripped higher in New York on Thursday following news that Saudi Arabia’s exports are expected to fall next month. WTI jumped +1% to USD $69.46 per barrel, while Brent crude pared gains following the end to a Norwegian shipowner’s strike, ending -0.3% down at USD $72.58 per barrel. European equity markets traded generally lower on Thursday as the Euro strengthened and mining stocks declined. The Stoxx Europe 600 slipped -0.23% to 386.17 points and the German Dax ended -0.62% lower at 12,686.29 points. In the U.K. the FTSE 100 benefitted from a weaker pound, adding +0.1% to 7,683.97 points.

PRECIOUS After touching a fresh cycle low of USD $1,211.50 on Thursday, gold again skewed to the down-side during early Asian trade on Friday. A familiar story for the metal, with price action dictated by dollar flows and most notably USD/China as USD/CNY fixed higher and USD/CNH followed to add around +0.7% in early trade. The bid tone to the dollar saw bullion initially under pressure, moving sharply through USD $1,220 to see weakness extend toward USD $1,215. Afternoon pricing saw the dollar reverse gains to support gold back above closing levels in New York and we have started to see heightened interest in the metal following the overnight break lower. USD $1,240 remains a pivot point for the yellow metal, while supportive price action should extend toward USD $1,210 - $1,200. Silver was able to base around the 2017 low of USD $15.19 on Thursday and while sold in early Asian trade today has continued to see underlying interest and has spent little time underneath USD $15.30. Base metals are beginning to show signs of a recovery, which may buoy silver back toward USD $16 in addition to supporting a recovery to the white metals, notably platinum after the metal recovered back above the USD $800 pivot point.

 

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 16 July 2018

MACRO: The cost of imported goods in the U.S. declined -0.4% in June to mark the largest decline since February 2016. Excluding fuel, import prices declined -0.3%. The DJIA reclaimed the 25,000 points handle on Friday, gaining +0.38% to 25,019.41 points, while gains to consumer staples (+0.63%) helped the S&P 500 +0.11% higher to 2,801.31 points. The Nasdaq Composite pushed +0.03% higher to mark a fresh record close of 7,825.98 points. Over the week the DJIA gained +2.3%, the S&P 500 added +1.5% and the Nasdaq finished +1.8% higher. The greenback eased modestly on Friday after paring earlier gains in New York, sliding -0.17% after notably losing ground against the euro and the yen. Treasury yields in the U.S. eased on Friday as trade tensions buoyed demand for bonds. The 10-year declined 2.2bps to 2.83% and the two-year dipped 1.2bps to 2.58%. European stock markets booked modest gains on Friday, however trade concerns continued to remain in focus. The Stoxx Europe 600 ended the session +0.17% higher to 385.03 points for a +0.7% weekly return, while the German DAX gained +0.38% to 12,540.73 points and the French CAC 40 rose +0.43%. In the U.K. the FTSE 100 inched +0.14 higher to 7,661.87 points, with gains tempered somewhat by a stronger pound late in trade.

PRECIOUS: Gold continued to see price action dictated by dollar flows during Asian trade today, recovering from early session weakness to break above the USD $1,245 pivot point in afternoon trade. An initial bid to USD/China saw heavy trade in early Shanghai, reversing an initial move through USD $1,244 and extending back toward opening levels. The weakness was however short-lived as the Chinese currencies regained the ascendancy following the 2Q GDP print of +6.7% YoY (exp: +6.7%) and a mild uptick to retail sales to +9.0% YoY (exp: +8.8%). Bullion tracked steadily higher throughout the afternoon on the back of the softer dollar, pushing above USD $1,245, before running into offers around the figure. The yellow metal tested support around USD $1,237 last week and although closing above the figure continues to remain weak, while ETF outflows are creating headwinds for the metal, with around 1.2 million ounces liquidated so far this month. Key down-side support remains around USD $1,236 - $1,237, while USD $1,245 will act as a top-side pivot point for an extension through USD $1,250. Focus this week will be on Federal Reserve Chairman Jerome Powell's testimony before congress tomorrow, while on the data front today we see Empire manufacturing and U.S. retail 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 : Tuesday 10 July 2018

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

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

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

 

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