DAILY REPORT : Thursday 4 Jan 2018

MARKETS/MACRO: It was another strong performance by U.S equities overnight, with all 3 major indices continuing their early 2018 rally and all closing at fresh record high's. The Dow Jones Industrial Average advanced +98.67 points (+0.40%) to 24,92.68, the S&P500 rallied +17.25 points (+0.64%) to 2,713.06 and the NASDAQ composite led the pack, up an impressive 58.632 points (+0.84% on the day and +2.3% for the year so far) to 7,065.531. European equities followed suit with the FTSE Euro First 300 Index improved +7.40 points (+0.48%) to 1,533.52 and the Euro Stoxx 600 up +1.87 points (+0.48%) at 390.22. Regionally the DAX and CAC40 were strong performers up +0.83% and +0.81% respectively and the FTSE100 ticked higher +0.30%. For USD the overnight session was a bit of a mixed bag, with the recent weakness retracing somewhat against most of the G10 - particularly the GBP and EUR. This is more or less in line with seasonality patterns that the USD tends to rally in the first week of January, and then fall off by the second trading week. A pop was seen late in the day for USD, supported on the back of the Fed minutes which indicated a meaningful improvement in the Committee’s expectations for US economic activity. GBP was the biggest G10 loser while NOK out-performance overnight was noteworthy. It was a choppy session for treasuries as the yield curve, while range-bound, continued to flatten with 2y note yields up 1 bp and 30y bonds down -2 bps. The flattening was driven predominantly by Fed speak, specifically: "Participants discussed several risks that, if realised, could necessitate a steeper path of increases in the target range”. In commodities, crude rallied today with WTI up +$1.40 and Brent up +$1.30 at highest levels in over 2 years on concerns about the ongoing protests in Iran.

The minutes from the December FOMC meeting were consistent with a meaningful improvement in the growth outlook but provided little new information about monetary policy. The improvement in the Committee’s growth expectations primarily reflected a greater number of participants factoring in anticipated fiscal policy changes. The Committee’s views on core inflation appeared little changed also. The minutes again mentioned the possibility of potential alternative monetary policy frameworks, this time including nominal GDP targeting. Most economists continue to believe that there are 3-4 interest rate hikes imminent over the course of 2018 - with consensus suggesting the first rise in March.

PRECIOUS: Gold finally saw a little consolidation overnight with a some two-way volatility returning to the market. Gold opened in Asia yesterday around $1317 and initially popped through the previous days highs and traded through $1320, remaining there for the first few hours of the day. As the Chinese market opened we saw the USDCNY rise from 6.495 to above 6.500 and the premium on the exchange continue to angle lower - sitting around $6-8 over loco London compared to $10-12 a week earlier. Chinese banks as a result were on the offer and quickly sold into the morning's strength, forcing the metal to swiftly retreat back below $1315 to a low of $1312.50. A base was found around that level for the interim and the metal then proceeded to grind slowly higher again throughout Europe and most of the U.S session. Once the FOMC minutes were released, the positive tone surrounding the committee's expectation of economic activity drove the dollar higher. Gold consequently sold off sharply to the days low of $1307.80 only to reverse just as quickly and return to where we traded before the release ($1315-16). As we moved into the close there was some further liquidation so we closed around $1312. We still feel that gold has come a long way and may correct a little further from here. That being said we view a pullback towards $1290-95 as a decent buying opportunity. Initial topside resistance will be yesterdays high ($1321.50) followed by the 76.4% retracement of the Sep-Dec fall ($1329.00). XPD is outshining the rest of the PM’s and is close to testing all-time highs at $1095. A break would shift the focus toward the next price projection at $1200.

Further liquidation was seen today for gold as speculators and Chinese traders continued to sell. After opening at $1312.50, there was a brief tick higher to $1313.50 at the open, although that was the only real push over the rest of the session. Japan re-entered the market for the first day of the new year and they were noticeable sellers at the Tocom open. Spot gold marched lower into the SGE session pushing through $1310 with 5 minutes to go. Once the exchange opened they were again on the offer with the premium remaining around $6.50-7.50, so up a touch, but still at the low end of the recent range. Chinese banks were again looking for bids and the metal continued to decline as low as $1306.50 about half an hour after the SGE opened. From there it was only very light two-way trade seen as gold consolidated quietly between $1306.50-1308. Silver followed gold lower but ran into some solid support at $17.00, before edging back up toward $17.05. Platinum, which was the best performer overnight, was under a lot of pressure from Japanese specs, who were eager sellers given the significant rise over the past week while they have been out. The white metal fell some $10 (1.1%) over the day and continues to look soft as I write.

On the data front today look out for a host of European Services and Composite PMI's, U.S ADP employment and 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 : Wed 27 Dec 2017

MACRO: U.S. home prices increased +6.2% YoY during October according to the latest S&P CoreLogic Case-Shiller data. Seattle recorded the strongest annual gains to improve +12.7%, while of the 20 metro areas recorded by the index, Washington DC reported the lowest gain, edging just +3.1% higher. The Richmond Fed manufacturing index sunk to 20 (exp: 21) during December from 30 previously, while the Dallas Fed manufacturing activity index jumped to 29.7 (exp: 20.0) from 19.4. Equity markets in the U.S. softened marginally following the Christmas Day break, as declines to Apple (-2.54%) dragged the broader market lower. The DJIA eased just -0.03% to 24,746.21 points, while the S&P 500 declined -0.11% to 2,680.50 points and the Nasdaq Composite fell -0.34% to 6,936.25 points. Oil futures turned higher on Tuesday following reports of supply disruptions in Libya. WTI surged +2.6% to settle just underneath USD $60 per barrel, while Brent crude jumped +2.7% to settle at USD $67 per barrel.

PRECIOUS: Gold logged its best finish in nearly 4-weeks on Tuesday, supported by a softer greenback in New York and heavy trade to global equities. Interest out of China kicked off the bid tone, pulling bullion away from Friday's closing level to add around USD $4 in early Shanghai pricing. The yellow metal however saw further gains through USD $1,280 capped by offers around the figure and a lack of follow through buying in thin liquidity leading into European trade. A leg higher to the greenback put the brakes on further upward momentum in European hours, however a reversal to the fortunes of the dollar in New York soon buoyed the metal through USD $1,280 to a USD $1,283.75 session high print. Asian trade on Wednesday was a relatively subdued affair, void of Tuesday's Chinese interest, the metal held a narrow range throughout the session. Late afternoon dollar declines did little spark interest in bullion as pricing remained stagnant leading into European hours. Geopolitical concerns regarding developments in Spain may be contributing a mild risk premium to bullion currently, however this is expected to be a short term pricing factor and as we move out of Christmas holiday liquidity we are likely to see the yellow metal drift back through the USD $1,280 pivot point towards support at USD $1,270 - $1,274. Data releases today include German retail sales, U.S. Conference board consumer confidence and U.S. pending 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 19 Dec 2017

MACRO: The NAHB U.S. housing market index improved to 74 during December (exp: 70) from a read of 69 during November. Measures of home buyer traffic, current sales conditions and sales expectations all increased to see the headline figure to the highest level since mid 1999. Equity markets in the U.S. continued to extend recent gains on Monday as confidence grows that tax reform may pass as early as this week. Broad based gains saw eight of eleven sectors of the S&P end in positive territory as the bourse gained +0.54% to a fresh record closing level of 2,690.16 points. The DJIA added +0.57% to 24,792.20 points, the seventh positive close in eight sessions for the bourse and the 70th record close this year to mark the highest number of record closes in a single calendar year. Not to be outdone, the Nasdaq printed a fresh record close of its own, jumping +0.84% to 6,994.76 points as Google (+1.22%) helped the bourse through 7,000 points intra-session for the first time in history.

Oil futures reversed early European gains late in trade on Monday, with prices weighed down by an EIA forecast of increases in shale supply in January and position squaring ahead of the expiration of the January WTI contract on Tuesday. WTI ended the session around -0.3% lower at USD $57.20 per barrel, while the continued closure of the North Sea Forties pipeline supported Brent prices as the global benchmark added around +0.2% to end at USD $63.39 per barrel. The greenback reversed Friday’s gains on Monday, slipping against major rivals to see the DXY index -0.3% lower. The euro clawed back ground to trade above 1.18, while the dollar also pulled back relative to the yen, however managed to pare declines late in trade. Treasury yields in the U.S. traded mixed, seeing the 10-year around 3bps higher to 2.39% and the two-year 0.8bps lower to 1.827%

Equity markets in Europe bounced on Monday, with the anticipated tax reform in the U.S. buoying financial stocks. The Stoxx Europe 600 jumped +1.2% to 392.66, marking the highest close since November 8, while the German Dax surged +1.59% and the French CAC 40 ripped +1.33% higher. In the U.K. the FTSE 100 posted its second consecutive session gain to end at the highest level in around 5-weeks. A stronger sterling weighed upon regional equites however, seeing the bourse add +0.62% to underperform European markets.

PRECIOUS: It was generally one-way traffic for bullion on Monday, steadily climbing off early Asian lows toward USD $1,250, before triggering a stop loss run through the USD $1,260 resistance in New York to end +0.6% higher on the session. The metal saw sustained demand throughout the session, no doubt benefitting from a softer greenback. Asian trade on Tuesday saw a continuation of Monday's bid tone, albeit tied within a narrow range as bullion once again had to overcome early session offers. The previous session's resistance of USD $1,260 has now turned supportive, providing a base as offers either side of the Chinese open weighed upon the price action. Further dollar declines into the afternoon underpinned a move higher in bullion, testing toward Monday's New York high print around USD $1,264. Resistance for the metal now sits toward USD $1,269, while support lies broadly between USD $1,255 - $1,260. Platinum was the stand-out performer on Monday, ripping nearly +2% higher to reclaim the USD $900 handle. Over the past two sessions the metal has gained around +3.3% as a recently reported increase in European car registrations fuels speculative interest in the metal and the South African ZAR strengthens following the ANC leadership election. It is also worth noting that the latest CFTC data showed non-commercial shorts toward all-time high positioning, potentially opening up further top-side gains on a short squeeze should pricing remain bid. Data releases today include German IFO survey results, U.S. housing starts and building permits and the U.S. current account balance.

 

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 3 Jan 2018

MARKETS/MACRO: The S&P kicked off the year in impressive fashion notching up a new all time high, with the Dow and NASDAQ hot on its heels. The S&P jumped +22.20 points, or +0.83% to 2,695.81, while the Dow Jones Industrial average rose +104.79 points (+0.42%) to 24,824.01 and the NASDAQ surged +103.51 points (+1.50%) to close at 7,006.898. The enthusiasm was not shared by their European Investor counterparts however with the EuroFirst 300 Index down -3.45 points (-0.23%) to 1,526.12 and Euro Stoxx 600 declining -0.83 of a point (-0.21%) to 388.35. In FX, the Greenback continued to sell off against all the G10 and most of the emerging market currencies. Key resistance levels were broken in GBPUSD and EURUSD which led us to test the cycle highs at 1.3600 and 1.2081 respectively, though as the New York session wore on those chasing USD lower seemed to run out of steam. More broadly, the USD has depreciated more than 2% since mid December and there doesn’t seem to be a near term catalyst to reverse the trend. Goldman Sachs traders believe the market is still significantly long dollars, which could mean more pain for USD longs, very similar to what we saw at the start of 2017. Treasuries sold-off overnight as the curve bear steepened. They began their move lower in the London session, in-line with EGBs which were down due to hawkish ECB rhetoric and the return of sovereign supply. In commodities, crude was little changed (-$0.05 in WTI, -$0.32 in Brent) with price action very muted. Attention was focused on protests in Iran, which have not yet impacted crude production, but could be used by the U.S Congress as a reason to act on the Trump Administration’s recent decertification of Iran’s compliance with the 'Joint Comprehensive Plan of Action'.

In data, the Euro area Final Manufacturing PMI was in line with the December Flash estimate and remains in strong growth territory at 60.6 (60.6 expected). The German and French Manufacturing PMIs both rose on the month (despite a downward revision relative to the December flash estimate in France), to 63.3 and 58.8 respectively. Both Italian and Spanish Manufacturing PMI data – for which no flash estimate is published – disappointed consensus expectations, falling on the month to 57.4 (58.5 expected) and 55.8 (56.5 expected), respectively. Things were also positive in the U.S, with Markit's manufacturing PMI coming in slightly above expectations at 55.1 (55.0 expected).

PRECIOUS: Gold continued its good fortune yesterday, driven higher by the persistent sell-off in the USD and in spite of U.S equities hitting fresh records and treasuries softening. During Asia the market was initially range-bound with spot gold oscillating between $1302-1308. The SGE premium remained stable around $7-9 over the loco London price, with a move lower in USDCNY supporting the premium despite the higher metal price. Once the yellow metal took out $1310 during the early European hours it was a steady grind higher which persisted throughout much of the day. Signs of seasonal Asian buying are yet to be seen in any meaningful way, which does make it difficult to chase this move higher, although we do expect this to begin filtering in over the next week or so. Speculators have played a role in the move over the past week and half, increasing their bullish positions by around ~26% on the CME. Volatility and skews are also starting out the year firmer, with the last ATM vols around the following 1m 9.25, 3m 9.6, 6m 10.7 and 12m 12.1. Looking at the charts, RSI for gold is definitely sitting in overbought territory (75+), however, general flows suggest that a slow grind higher to stable pricing is likely. The next upside target sits at $1329 (Retracement of Sep-Dec sell-off) while support will kick in around $1315 followed by $1288-92. On the physical front the GFMS reported that India's 2017 gold imports rose to 855 tons, from 510 tons in 2016.

Gold continued on in an unwavering fashion this morning opening around $1317.50 and pushing up through $1320 during the first hour of trade. There was noticeable selling interest up there which curbed any further advance, however, it did manage to stay above that level into the Shanghai open. SGE traders were on the offer as a result of the higher prices and the premium did come a little lower than what we have seen the previous days to trade around $6-8 over the spot price. Spot gold was sold back through $1320 immediately following this although quickly recovered. The weight of the selling had grown though, with some speculative traders happy to cash-in on the higher prices given the lack of Chinese follow through. The yellow metal consequently ripped lower towards $1312 before finding any support and never recovered back through $1315 into the afternoon. It will be interesting to see whether early London traders sell it. Silver had pushed up against $17.20 for the final few hours of the NYK session and did the same for the first few hours in Asia, with some chunky sell orders sitting around there at the spot equivalent on Comex. When gold retreated the silver followed suit and moved back through $17.10. Ahead on the data calendar look out for U.K construction PMI and employment data out of Germany, as well as U.S ISM manufacturing, consumer spending, and the FOMC minutes from Dec 12-13.

 

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 22 Dec 2017

MACRO: US equities were higher in fairly quiet trading as things wind down ahead of the holiday period. The three major index are still close to record highs, the Dow added 55.64 points, or 0.23%, to 24,782.29; the S&P 500 rose 5.32 points, or 0.20% to 2,684.57, while the Nasdaq inched higher 4.401 points, or 0.06%, to 6,965.361. There were wins for energy (+2.08%) and financials (+0.85%) while utilities (-1.19%) and REITs (-0.38%) led the laggards. European shares were higher, the EuroSTOXX gained 2.32 points, or 0.60%, to 390.69, the German DAX put on 40.57 points, or 0.31%, to 13,109.74, and the London FTSE 100 advanced 78.76 points, or 1.05%, to 7,603.98. In the currencies, the US dollar index slipped 0.06%, the EUR was as high as 1.1887 while USD/JPY traded down to 113.28. US treasury yields were mixed, the 2 year yield firmed 2.08 bps to 1.8775% and the 10 year yield eased 1.62 bps to 2.4808%. In commodities news, oil markets were higher as Brent rallied 0.34% to $64.78 while WIT rose 0.31% to $58.27. Base metals were broadly higher, with aluminium (+1.23%) the best performer. In US economic news, GDP growth for the third quarter 2017 was revised down to a 3.2% annual rate from the previously announced 3.3%. The Philly Fed Manufacturing Business Outlook Survey climbed to 26.2 in December from a 22.7 reading in November, the result was a surprise for economists who were predicting a slight retracement to 21.8. The Conference Board's leading economic index rose 0.4% in November after a 1.2% increase in October. Initial jobless claims rose 22k to 245k in the week ending December 16. Continuing jobless claims increased by 43k to 1.93M, In Asia today, as I write the Nikkei is at -0.02, the Shanghai composite is at +0.11%, the Hang Seng at +0.24%, and the ASX S&P 200 at +0.19%. Tonight we have durable goods orders, core capital goods orders, personal income, consumer spending, core inflation, new home sales, and consumer sentiment out of the US; and Gfk consumer confidence out of Germany.

PRECIOUS: A range-bound session for the precious in the wake of Wednesdays tax news out of Washington. Gold opened at $1265 in Asia pushed higher to $1268 as the USD/CNY tumbled, the SGE premium was at $12 over loco London which also helped support the market. We were back at the opening level by the time London came in and the NY opening bell saw the yellow metal print the days low of $1263. The metal found some buying support down here and spiked to a session high $1268 as the greenback was sliding against the yen. Silver traded generally sideways through the session, the grey metal finished slightly softer at $16.12. Palladium was the pick of the bunch, climbing $13 to close on the high of $1037. The XPD has added over 5% since December 6th. The Philadelphia gold and silver index added 0.45%. The SPDR gold trust holdings were unchanged at 836.02 metric tonnes. Today is the final trading day before the Christmas break it seems investors are thus far happy to sit on the sidelines. Gold opened at $1266.30 and has remained within a tight $2 range through Asian hours with the SGE premium still elevated at $11-12. The yellow metal sits at $1265.80 as I write. Silver is flat at $16.12, and no price action for the PGMs either. Gold has been on a grind higher since touching a 4 month low in early December, there is a raft of data set for release tonight, including core inflation figures, and weakness in the numbers could see gold make another attempt on the 200 DMA at $1269. The 100 DMA at $1286 would be the next point of resistance after that. On the down side there appears to be support at $1263 and below that the weeks low of $1253.

 

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 18 Dec 2017

MACRO: Last minute negotiations between Republican leaders and Senator Marco Rubio (R-Fla.) looks to have secured the votes required to pass the $1.5 trillion tax package, paving the way for President Trump’s first major legislative victory. Senator Rubio dug his heels in over demands to expand a child tax credit for modest-income families, however looks to have reached a compromise after announcing on Friday that he would support the bill. It is expected that the House and the Senate will vote on the bill this week, with expectations President Trump would sign it into law before Christmas.

Industrial production in the U.S. edged marginally higher during November, however was unable to sustain October’s +1.2% pace. The Federal Reserve reported a +0.2% MoM increase during November (exp: +0.3%) as manufacturing output increased just +0.2% to follow a +1.4% gain during October. Output within the volatile mining sector helped to underpin the headline print, jumping +2.0% during November as oil and gas extraction returned to normal levels following recent storm activity. Capacity utilization edged higher to 77.1% (exp: 77.2%) from 77.0% previously. The Empire State manufacturing index eased modestly during December, sliding to 18.0 (exp: 18.7) from 19.4 previously. Equity markets in the U.S. ripped higher to fresh closing records on Friday, buoyed by expectations over tax reform. The DJIA added +0.58% to 24,651.74 points to see the bourse +1.3% higher over the week, while the S&P 500 surged +0.90% to 2,675.81 points as technology led ten of eleven components higher to see the bourse gain +0.9% over the week.

Oil futures edged higher on Friday, finding modest support following a report that the number of active oil rigs in the U.S. declined by 4 to 747 to follow three consecutive weekly increases. WTI added +0.5% to settle at USD $57.30 per barrel, while on a weekly basis the U.S. benchmark eased -0.1%. Brent crude ended the session relatively flat at USD $63.25 per barrel, down around -0.3% on the week. U.S. treasury yields ticked mildly higher on Friday to see the 10-year add 0.4bps to 2.35% and the two-year 2.4bps higher to 1.836%. The greenback clawed back some of its recent session weakness during U.S. hours on Friday, seeing the DXY index end +0.5% higher after making notable gains against the Yen and the Euro.

European markets ended trade mixed on Friday as retail and banking stocks traded heavily. The Stoxx Europe 600 declined -0.19% to 388.19 points, while the French CAC 40 slipped -0.15% and the German Dax bucked the trend to climb +0.27%. In the U.K. the FTSE 100 rebounded from early session weakness to book a +0.57% gain as the pound softened following reports that EU leaders had agreed to move onto the second phase of Brexit talks.

PRECIOUS: Bullion kicked off the week in a quiet fashion during Asian hours today, trading with a mild offered bias in early session flows before Chinese demand underpinned price action throughout the afternoon. The greenback opened with a bid tone following the weekend tax reform headlines, seeing gold underneath USD $1,255 in early trade to drift below Friday's closing level. Chinese interest once again stepped in to support price action, as the on-shore premium continued to remain elevated toward USD $11 relative to loco London prices, however not quite reaching last weeks' USD $12 level. Coming into year-end we expect price action to remain relatively subdued, holding within the USD $1,260 - $1,240 range. The recent COTR report has shown a lightening of overall positioning, with gold now sitting around 30% of all-time high positioning, potentially increasing scope for further top-side gains once the dollar settles post tax reform. Data releases tonight are light with Eurozone CPI the main print of note.

 

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 2 Jan 2018

MARKETS/MACRO: In what was an extremely strong year for U.S equities they did close on a low point for the final day of trade in very thin holiday conditions. The Dow Jones Industrial Average dipped -118.29 points, or -0.48% to 24,719.22 (+20% over 2017), the S&P500 retreated -13.93 points, or -0.52% to 2,673.61 (+19% over 2017) and the NASDAQ composite relinquished -46.77 points, or -0.67% to 6,903.389 (+27.5% over 2017). Euro area stock indices faired better with the Euro First 100 Index off -1.31 points (-0.09%) to 1,529.57 and the Euro Stoxx 600 declining -0.36 of a point (-0.09%) to 389.18 to round out 2017. U.S 10y treasury yield was unchanged at 2.41% while the 10y German bund rose to 0.44%. In the currency space, USD retreated against most of its counterparts as the dollar index dipped -0.5% to 92.12, and down just under -10% over the course of the year. USDJPY was down slightly to 112.69 and EURUSD was up +0.5% to 1.20. Meanwhile, oil prices continued to rise as WTI crude oil climbed 1% to $60.42 (+12% over 2017).

North Korean leader Kim Jong Un began the new year with the offer of an olive branch to South Korea, raising the possibility of dialogue to ease tensions on the Korean peninsula. In a change of tone, Mr Kim on Monday acknowledged the need to reduce military tension with the South and said the path to dialogue was open, raising expectations for an improvement in North-South Korean relations. The dictator also said Pyongyang would consider sending a delegation to the Winter Olympics which will be held in South Korea next month. In terms of the U.S however, Mr Kim again reiterated that the entire country was in range of the North Korean nuclear arsenal.

PRECIOUS: Gold finished the year on a positive note last Friday, continuing its steady climb seen over the final week of the year and ultimately closing above $1300 ($1303), up +13% for the calendar year. During Asian trade Friday, the yellow metal initially hovered around $1295. Very light interest from onshore Chinese traders was seen as the SGE remained level around USD $8-$9 premium. With soft USD throughout early NY, gold took-out the resistance and quickly traded to highs of $1307.50 easily absorbing any year-end selling. On the forward side, the market has been normalising with the year-end turn out of the way, short dates are back trading ~1.8%, and the GC Feb EFP is down to around $1.80-1.90. Interest has been fairly muted in Asia over the past few weeks as the premium stayed fairly range bound around $8-$10, although seasonal buying in January ahead of Chinese New Year should provide support in our time zone. So there is very real potential for physical interest to drive the XAU price even higher throughout January. From here, dips below $1290 should be well supported, while next major resistance stands around $1325-$1330. Silver was firmer Friday breaking through $17.00 but ultimately closing around $16.93 (+6% over 2017), platinum was fairly flat on the day and up +2.75% for the year, while palladium was slightly lower Friday yet took the gong for most impressive performance amongst it precious peers, up a whopping +56% for the calendar year.

The first trade day of the year carried on Friday's momentum with gold opening a touch higher and running strongly in thin, pre-SGE trade. The yellow metal after opening around $1303 swiftly made its way higher in the first 30 minutes to the Friday highs of $1307.50 before running into resistance. Decent sell orders in Feb gold were seen up around that spot equivalent and capped proceedings over the day. Despite not being able to break through the Friday peak, any dips throughout the AM were well supported by SE Asian and Chinese buyers. The SGE was still largely inactive with light selling seen initially which gave way to small buy clips later during the morning session - premium was unchanged around $8-9. This kept spot gold for the most part range-bound between $1305-1308. Silver followed the gold higher initially although continued to run into offers around the $17 handle, while the PGM's both traded in narrow ranges and at this point in time are both higher. Wishing you all a very happy and prosperous 2018 from everyone here at MKS.

 

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 21 Dec 2017

MACRO: The U.S. Senate passed historic tax reforms on Wednesday, delivering President Trump his first major legislative victory. The bill is the first major tax reform since Ronald Reagan was in the White House and is likely to be signed by President Trump within days. Existing home sales in the U.S. surged to a near 11-year high during November, gaining +5.6% MoM (exp: +0.9%) to an annualised rate of 5.81 million. Sales in the South following recent storm activity gained +8.3% to underpin the headline figure, while sales in the Northeast added +6.7% and sales in the Midwest jumped +8.4%. Sales in the West lagged -2.3%. Equities in the U.S. eased modestly following the historic tax reform, retreating from strong opening levels. The DJIA slipped -0.11% (28.1 points) to 24,726.65 points after being up as much as 80 points in early trade, while real estate (-1%) led seven of 11 components of the S&P 500 lower to see the bourse down -0.08% to 2,679.25. The greenback saw mixed trade in New York, however ultimately ended -0.1% lower, while treasury yields jumped to see the 10-year 3.3bps higher to 2.497% after briefly breaking above 2.50%.

PRECIOUS: Bullion saw mixed price action during Asian hours on Thursday, trading well bid throughout early pricing before turning offered into the afternoon. Regional demand was evident from the re-open as participants followed the overnight lead to take gold toward USD $1,267 into the Chinese open. The on-shore premium in Shanghai continued to remain elevated, pushing toward USD $12 relative to London pricing to underpin a push through the New York high print. Price action remained buoyant throughout the afternoon, knocking against USD $1,268, however unable to make headway through the figure. The tide turned once European names began to filter in late in Asia, sending gold sharply lower toward opening levels to pare back the earlier gains. The 200 DMA around USD $1,269.50 is currently weighing upon any attempts higher and this level will act as an important pivot point over the near term. Data today includes U.S. GDP, personal consumption, Initial jobless claims, the Chicago Fed Nat activity index, the FHFA house price index, Bloomberg consumer confidence and the U.S. leading index.

 

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

DAILY REPORT : Friday 15 Dec 2017

MACRO: US equities closed lower after giving back early gains amid news that some Republican senators support for the proposed tax bill was wavering. The Dow slipped 76.77 points, or 0.31%, to 24,508.66; the S&P 500 fell 10.84 points, or 0.41% to 2,652.01, while the Nasdaq fell 19.273 points, or 0.28%, to 6,856.525. Consumer discretionary (+0.27%) was the only sector to finish unscathed as materials (-1.09%), healthcare (-1.05%) and telecoms (-0.94%) led the losses. European shares were lower, the EuroSTOXX declined 1.79 points, or 0.46%, to 388.91, the German DAX fell 57.56 points, or 0.44%, to 13,068.08, and the London FTSE 100 gave up 48.39 points, or 0.65%, to 7,448.12. In the currencies, the US dollar index lost 0.09% to 93.517, the EUR was as high as 1.18541 before a drop to 1.772, while USD/JPY traded down to 112.06. US treasury yields were higher, the 2 year yield firmed 3.67 bps to 1.8110% and the 10 year yield added 0.71 bps to 2.3493%. In commodities news, oil prices were higher as Brent gained 1.44% to $63.34 and WTI put on 0.78% to $57.04. Base metals were broadly higher, with aluminium (+2.02%) leading the way higher. In US economic data, retail sales rose 0.8% in November following a 0.5% increase in October, the gain was well in excess of the 0.4% movement forecast by economists. Internet retailers reported a 2.5% surge in sales as consumers increasingly switch to shopping online. The import price index rose 0.7% in November, while import prices excluding fuel were unchanged. Business inventories lost 0.1% in October after remaining flat in September. The IHS Markit manufacturing PMI flash reading rose to 55 in December from 53.9 in November, while the services PMI flash reading fell to 52.4 from 54.5. Initial jobless claims slipped 11k to 225k in the week ending December 9. Continuing jobless claims fell by 27k to 1.89M, In Asia today, as I write the Nikkei is at +0.03, the Shanghai composite is at -0.95%, the Hang Seng at -1.14%, and the ASX S&P 200 at -0.25%. Tonight we have industrial production, capacity utilisation, and the Empire State index out of the US; and Balance of Trade out of the Eurozone.

PRECIOUS: Reasonably quiet session for the precious as gold holds above $1250. Gold opened at $1255 in Asia and reached the days high of $1258 as the $11 SGE premium prompted some buying action. The market drifted lower though the PM but London were buyers as they came in, we were back at $1258 for the NY open. The yellow metal dropped to a session low $1250 following NY open as investors dumped the euro, finally settling to finish at $1252. Silver was unable to hold above the $16 level following the previous days strong showing, the grey metal went sideways for a large portion of the session before dropping to a low of $15.77 in NY. Palladium surged $26 off the lows to print a fresh post-2001 high of $1034. The Philadelphia gold and silver index lost 0.26%. Gold ETFs sold 4.7koz overnight. In todays trading, gold opened at $1252.70 and has been range bound with the SGE premium at $12 over loco London, the yellow metal is at $1254.40 as I write. Silver is flat at $15.88 as I write. Palladium has thus far avoided price taking after yesterdays surge and is holding above the $1030 level. We should see initial support for gold at the $1250 level followed by the recent lows of $1237. On the upside, yesterdays high at $1258 should be the first point of resistance, followed by the 200 DMA at $1268 and the 100 DMA at $1286.

 

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

DAILY REPORT : Thursday 28 Dec 2017

MACRO: US equities edged higher in very light trading. The Dow added 28.09 points, or 0.11%, to 24,774.30; the S&P 500 rose 2.12 points, or 0.08% to 2,682.62, while the Nasdaq inched higher 3.087 points, or 0.04%, to 6,939.336. There were wins for utilities (+0.41%) and REITs (+0.40%) while energy (-0.32%) and telecoms (-0.23%) led the laggards. European shares were mixed, the EuroSTOXX gained 0.26 points, or 0.07%, to 390.54, the German DAX edged lower 2.77 points, or 0.02%, to 13,070.02, and the London FTSE 100 advanced 28.02 points, or 0.37%, to 7,620.68. In the currencies, the US dollar index fell 0.22% to 93.08, the EUR broke above 1.19 while USD/JPY saw some volatility but remained relatively unchanged. US treasury yields were higher, the 2 year yield was unchanged at 1.8990% and the 10 year yield firmed 1.50 bps to 2.4260%. In commodities news, oil prices were higher as WTI added 0.16% to $59.75. Base metals were mostly higher with zinc (+0.72%) the best performer. In US economic news, the Conference Board reported consumer confidence in the US softened in December, sliding to 122.1 from a 128.6 reading in November. US pending home sales rose by 0.2% in November following a 3.5% increase in October. In Asia today, as I write the Nikkei is at -0.06, the Shanghai composite is at +0.58%, the Hang Seng at +0.65%, and the ASX S&P 200 closed at +0.30%. Tonight we have weekly jobless claims, advance trade in goods, and Chicago PMI out of the US.

PRECIOUS: Another positive session for the precious as gold continues to push higher. Gold opened at $1282 in Asia and stuck to a very tight $1281-82 range in quiet trade, the SGE premium at $10 was not enough to move the market. We saw a bump up to $1285 in early London trading as the EUR started to firm against the US dollar. NY were on the bid from the opening bell, the yellow metal traded steadily higher through the 100 DMA to a top of $1288, before easing a couple of dollars at the finish. Silver opened right on the $16.50 level and took advantage of the dollar weakness to climb to a December high $16.70. Palladium surged to a high of $1065 before enduring some whippy trade in NY hours, the metal still managed to close near the highs at $1062. The Philadelphia gold and silver index lost 0.39%. Gold ETFs bought 7koz overnight. In todays trading, gold opened at $1286.90 and has climbed higher as the day progress as the greenback continues to tank. The SGE premium has softened a little but this has done little prompt any selling action. The yellow metal is at $1291.30 as I write. Silver opened at $16.61 and has tracked higher through the day, the grey metal sits at $16.74 as I write. In the PGM's, palladium is flat and platinum has risen to $924 as I write. Gold has climbed a healthy 2% over the past 7 days and now trades above the the 200 and 100 DMA, the latter of which should provide initial support at $1286. On the upside, the yellow metal should meet some staunch resistance at the $1300 level.

 

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

DAILY REPORT : Wed 20 Dec 2017

MARKETS/MACRO: U.S. stock market indices cooled on Tuesday after a recent strong run, as the House of Representatives passed a bill that would deliver sweeping corporate tax cuts, before sending it to the Senate. The Dow Jones Industrial Average fell -37.45 points, or -0.15%, to 24,754.75, the S&P500 retreated -8.69 points, or -0.32%, to 2,681.47 and the NASDAQ slumped -30.91 points, or -0.44%, to 6,963.852. The best performing sector was Consumer Staples ( 0.18%) and the worst performing sector was REITs ( -1.90%). European stocks closed lower as investors weighed US tax cuts against a disappointing reading on German business sentiment. The Euro First 300 Index slumped -7.95 points, or -0.51% to 1,538.29 and the Euro Stoxx 600 faired better but still dipped -1.64 points, or -0.42% to 391.02. Regionally the DAX declined -0.72%, CAC40 slid -0.69% and the FTSE100 bucked the trend up +0.09%. Crude oil prices inched higher on expectations of another strong draw-down in U.S inventories, WTI crude up +$0.30 on the day (+0.52%) to +$57.46. A Bloomberg survey showed that investors are expecting crude oil stockpiles to fall by 3.15m barrels. Repairs continue on the Forties pipeline which has stopped crude oil flowing from the North Sea, with Ineos having a 2-4 week restart target from when the line was shut down on 11 Dec. There was a sharp rise in U.S bond yields in what seemed to be a delayed reaction to the tax plan after holding steady for the past few months amidst the debate.

On the data front, U.S housing starts rose +3.3% in November (-3.1% expected) from the prior month to a seasonally adjusted annual rate of 1.297 million. Last month’s gains were buoyed by new single-family construction, which grew to its highest levels in a decade. Single-family building in the South and West both reached their highest monthly rates since July 2007. Residential building permits, which can signal how much construction is in the pipeline, fell -1.4% to an annual pace of 1.298 million last month (-3.5% expected) after being revised upwards to +7.4% a month earlier. In Germany, the IFO business climate index dropped to 117.2 in December, down from 117.6 in November and missing forecasts of a 117.6 reading. The Expectations reading also fell short at 109.5 (110.7 expected), down from a 111.0 reading a month earlier. In Australia, the RBA’s last formal communication for the year was up-beat about the outlook for the local and global economy. Its main note of caution was that, “household consumption continued to be a significant risk”. It also noted the strength in the labour market and its increased confidence that this, and an improvement in price growth, will continue over the next year. The outstanding question for the Bank is how much more improvement is needed to see a bolstering of wage growth?

The U.S House of Reps gave its final approval Tuesday to the Republicans sweeping $1.5 trillion rewrite of the tax code, putting law-makers one step away from delivering their first major legislative victory since President Donald Trump took office. The 227-203 vote sends the bill to the Senate, where Majority Leader Mitch McConnell said law-makers will pass it later this evening. Trump is expected to sign it as soon as Wednesday if passed.
PRECIOUS: There was very subdued price action across the precious complex overnight, despite rates trading firmer and stocks easing. In Asia, the gold opened yesterday around $1263 and similar to the previous session was initially under pressure. By the time the SGE opened up for trade it was trading a little lower, with the premium dropping back a few dollars to $9 over spot. Chinese banks were on the offer initially which drove the price a few dollars lower towards $1260. Things steadied from there as some light short covering began to take place and drive gold higher into the London open. This continued throughout much of the European day hitting a peak of $1265 spot, where there were some decent resting sell orders in Comex. Gold reversed a little as the 10y UST rate took off from 2.4% to 2.47% and news began to circulate about the passing of the tax bill through the House of Reps. It was slow going though, the metal eventually ticking through $1260 briefly, but rallying toward the close to finish the day around $1262.50. Silver ground steadily higher into the NY open, but then turned sharply lower in line with the gold and bonds to below $16.10. Both platinum and palladium closed slightly higher on the day, trading modest volumes throughout.

It was another slow day for the metals in Asia with the gold opening more or less where we did yesterday. Some light bids for gold and silver crept in ahead of the Shanghai open and the former began to edge higher. The buying accelerated after the SGE opened with a strong premium of around $11-12 over the loco London price, after trading around $9 the day before. Spot gold ticked higher following the SGE open pushing up towards $1265, but running into some thick offers around there (overnight high). Silver also ticked higher but to lesser degree than gold running into some Comex offers around $16.15 (cash) and remaining there into the afternoon. PGM's remained flat on the day so far. In other markets equities are currently narrowly mixed with the Nikkei -0.05%, Shanghai Composite -0.2%, Hang Seng +0.1% and ASX200 +0.05%. Crude has carried on its ascent, WTI up +$0.10 (+0.17%) to $57.75 at last check and Brent is up +$0.15 (+0.2%) at $63.92. USD is narrowly mixed against the majors. A slow night for data tonight, German PPI and U.S existing home sales and mortgage applications the only thing of note. 

 

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 14 Dec 2017

MACRO: House and senate Republican’s reached an agreement on tax reform on Wednesday, paving the way for the bill to pass before Christmas. It is expected that the corporate tax rate would be reduced to 21% from the current 35%, a percentage point higher than the 20% proposed by both the house and the senate previously, while the top individual tax rate would be reduced to 37% from 39.6% proposed by the house and 38.5% in the senate.

As widely expected the FOMC decided to raise interest rates by 25bps to a range between 1.25% – 1.50% at the December meeting. With regards to the dot projections, the medians for 2017-19 were unchanged at 1.375%, 2.125% and 2.688% respectively, while 2020 rises by 19bps to 3.063%. This is expected to result in 3 rate increases in 2018, around 2 hikes in 2019 and between 1 and 2 hikes in 2020. U.S. consumer inflation increased +0.4% MoM (exp: +0.4%) during November to follow a +0.1% increase previously, however disappointingly core CPI (ex food and energy) inched just +0.1% higher MoM (exp: +0.2%) from a +0.2% gain in October. On an annual basis CPI increased to +2.2% (exp: +2.2%) from +2.0% previously, while core CPI eased to +1.7% (exp: +1.8%) from +1.8% previously. Apparel prices fell -1.3% to mark the largest decline since late 1998, healthcare services eased -0.1% and food prices held generally unchanged.

Equity markets in the U.S. ended generally higher on Wednesday to see the DJIA to a fresh record closing level, however the S&P 500 softened late in trade to pare earlier gains. The DJIA extended its winning run to five consecutive sessions, adding +0.33% to 24,585.43 points, while weakness across financials (-1.27%) hit the S&P 500 late in trade as the bourse snapped a four session winning streak to end -0.05% lower at 2,662.85 points. The Greenback traded lower on Wednesday following the FOMC rates decision, with a lack of further direction as to 2018 policy disappointing many searching for a hawkish tilt. The DXY index ended the session -0.6% lower as the greenback triggered a stop loss run through 113.00 against the yen, while the euro traded through 1.18.

U.K. lawmakers voted on Wednesday to amend Prime Minister Theresa May’s blueprint for Brexit, voting 309 to 305 in favour of an amendment that requires any final deal with the EU to be approved by the parliament. The news did little to sway the FTSE 100 as the bourse swung between minor gains and losses to ultimately end -0.05% lower. Jobs and wages data out earlier in the session were generally in-line with estimates. Equities across Europe traded under pressure on Wednesday as investor’s awaited the FOMC rates decision. The Stoxx Europe 600 eased -0.24% after printing the highest close in five weeks on Tuesday, while the German Dax booked a -0.44% decline and notably the Italian FTSE MIB index dropped -1.44% following reports that a general election will be held on March 4 next year.

PRECIOUS: Bullion reversed recent weakness in New York on Wednesday, seeing solid support toward USD $1,240 before ripping higher on the back of dollar weakness following the FOMC rates decision. After four successive sessions of declines and trading to a near six-month low, the yellow metal caught a bid in New York trade, with the FOMC disappointing many with their lack of hawkish policy direction in 2018 and beyond. Gold was able to break above USD $1,250 late in trade to book a +0.8% gain as shorts scrabbled to cover positions and ETF's saw solid inflows. Early Asian flows saw gold trade with a mild offered bias on Thursday, sliding back below USD $1,255, however underlying interest restricted any further declines. Demand out of China continued to see the on-shore premium hold above USD $10 relative to London pricing, and in conjunction with further declines to the greenback saw bullion through the New York high print toward resistance around USD $1,260. A lack of follow through buying during the Chinese lunch break saw bullion pull back toward USD $1,256, however remaining resilient into European trade. Following Wednesday's price action bullion will look to hold support at USD $1,250, while any further declines will once again see USD $1,240 in play. Initial resistance sits at USD $1,260, however the key for further gains will be the 200 DMA at USD $1,268.

Data releases today include Eurozone auto registrations, French CPI, U.K. retail sales, Markit manufacturing / composite / services PMI's from France, Germany and the Eurozone, the BOE decision and the ECB decision. Out of the U.S. we see initial jobless claims, retail sales, Markit manufacturing / composite / services PMI's and Bloomberg consumer confidence

 

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.