DAILY REPORT : Thursday 6 July 2017

MARKETS/MACRO: U.S. stocks were generally higher on Thursday, inching higher after a weak start, with tech stocks attempting to snap a 3 day losing streak. The Dow Jones Industrial Average was fairly flat down -1.10 points, or -0.01%, to 21,478.17, the S&P500 advanced +3.53 points, or +0.15%, to 2,432.54 and the Nasdaq rallied +40.795 points, or +0.67%, to 6,150.855. The best performing sectors were tech (+1.04%) and healthcare (+0.54%), while energy (-2.01%) and REITs (-1.21%) were the laggards. European stocks rose for the second time in three days as a rally in financial services companies and retailers offset declines in the oil and gas names. The FTSE Euro First 300 index crept up +1.49 points, or +0.1% to 1,505.34 and the Euro Stoxx 600 index gained +0.69 of a point, or +0.18% to 382.99. Regionally the DAX was lifted +0.13%, FTSE100 +0.14% and CAC40 +0.1%. Oil prices collapsed yesterday as the U.S. opened following 8 straight days of gains, with investors taking a glass half empty approach to events in the market. Reports that Russia was against any proposal to deepen production cuts wasn’t taken kindly by investors, with futures selling off right from the opening bell. The move also suggests that last week’s gains were probably more due to short covering than any fundamental shift in sentiment. The focus will return to inventories this week, with the market expecting a draw-down of 2 million barrels (BBG survey). August WTI crude slumped -$1.84, or -3.9% to US$45.23 a barrel and closed a touch higher at $45.61. Treasuries rallied as the FOMC minutes came largely in line, with the notable hawkish surprise being the apparent willingness to start the balance sheet process in July vs the assumed September. The 2y note yield fell -0.38bps to 1.4063% and the 10y bond yield declined -2.49bps to 2.3249%.

On the data front new orders for U.S. made goods fell farther than expected in May, although this was evened out with slightly stronger orders for capital goods suggesting manufacturing remains on a moderate growth path. Factory orders fell -0.8% in May (-0.5% expected) from -0.3% a month earlier and Durable goods orders improved slightly down -0.8% as expected, better than the -1.1% prior read. The Commerce Department also noted that orders for non-defense capital goods excluding aircraft – seen as a measure of business spending plans - rose +0.2%, improving from the prior -0.2% read. The minutes from the June FOMC meeting down played recent inflation weakness, noted risks related to financial stability, and suggested that the easing in financial conditions strengthened the case for rate hikes. The minutes also appeared to indicate that some members favoured a July announcement of balance sheet normalisation, while others preferred to wait until September. Economic activity was characterised as “rising moderately on average”, with international risks appearing to “recede further.”

Tensions between Washington and North Korea continue to intensify with leader Kim Jong Un vowing his nation will never put its weapons programs up for negotiations, a day after test-launching its first inter-continental ballistic missile (ICBM). The rhetoric suggests more tests are imminent as the country works to perfect nuclear armed missiles capable of striking farther distances. The U.N. Security Council has just concluded an emergency open meeting regarding the aggression. U.S. Ambassador to the U.N. Nikki Haley told the constituents N Korea was "quickly closing off the possibility of a diplomatic solution" and the United States was prepared to defend itself and its allies. “One of our capabilities lies with our considerable military forces. We will use them if we must, but we prefer not to have to go in that direction" she said.

PRECIOUS: Gold hit a new cycle low overnight at $1217.80 during the early NYK hours, yet came back to close just off the Asia highs at $1227. Gold began the day in Asia around $1223.50 and some more provocative comments by North Korea began to hit the wires. Things like Kim Jong Un was prepared to send 'many packaged gifts to the US' for their independence day celebrations. This sent USDJPY south from 113.30 to 112.80 and gold off towards $1229.00. SGE traders, after being very dormant for the past few sessions, came out of the the blocks firing and were good buyers over the AM session. The premium approached $10 for onshore traders throughout the morning which was up a $1 or so from prior sessions and remained there into the lunchtime close. As the USDJPY started to bottom out, some offers began to appear in August gold. There was still good buying from Asian names on the way down but gold continued to slide into the European session. This continued into the NYK open, gold falling sharply in line with a plummeting oil price, tripping stops through $1220 and posting a fresh low of $1217.80. Gold then slowly and steadily turned around from there. The FOMC minutes announcement that 'the committee was unable to reach an agreement in June on the timing of the balance sheet reduction' prompted gold and silver higher again towards $1227 and $16.10 respectively. Gold sits now close to some fairly important levels to the downside, $1214.25 being the May low, followed by $1195-1200 which mark a series of troughs in March. To the topside the 200 dma is the first resistance which cuts in around $1231.50. For now we continue to watch the Yen, Gold's correlation with the currency remaining very strong at 0.78 on a rolling daily basis past 3 months.

This morning gold was quite volatile early on in what were very thin conditions. After opening around $1227 and initially falling off a few dollars the market was aggressively swept back higher to touch $1229 before easing back off. For a second day in a row there was heavy Comex offering ahead of $1230 (cash), with some chunky orders visible there. The metal dipped and then came back higher leading into the SGE open, with traders expecting there to be decent demand there similar to the previous day. It never emerged however, with light neutral trade experienced on the exchange. Some macro offers then swiftly brought the market lower and we continue to trade a $1224-27 range into the early afternoon. Traders next event to focus on will be Friday's NFP figures, which always have the potential to provide fireworks. Until then though we see the metal consolidating between $1215-35. In other markets equities were softer, Nikkei currently leading the decline off -0.55% on the day, the Hang Seng is -0.25%, Shanghai Composite -0.3% and ASX200 -0.05%. The dollar was reasonably subdued, moving most against the yen (USDJPY -0.25% @ 112.98 last) and was mixed. Crude bounced back from yesterday's rout the August WTI currently sitting at $45.50, up +$0.35 or +0.75% on the day.

 

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 30 Jun 2017

MACRO: US equities were well lower as tech shares took a solid beating. Despite being a leading light this year as the US markets made their record run, the tech sector has weakened significantly in recent weeks. It's worth noting also that Thursday was the second to last trading day in the quarter, a time during which investors often look to reposition their portfolios or take profits. The Dow lost 167.58 points, or 0.78%, to 21,287.03, the S&P 500 slipped 20.99 points, or 0.86%, to 2,419.70, and the Nasdaq plunged 90.06 points, or 1.44%, to 6,144.35. Financials (+0.65%) and energy (+0.12%) were the better performers but were unable to cover the heavy losses in tech (-1.83%) and consumer staples (-1.17%). European shares were sharply lower as markets digest the more hawkish tone in recent comments from the ECB, the EuroSTOXX shed 5.16 points, or 1.34%, to 380.66, Frankfurt DAX fell 231.08, or 1.83%, to 12,404.00. The London FTSE 100 declined 37.48, or -0.51%, to 7,293.00. In currency markets, the greenback continues to soften as the US dollar index sheds 0.47% to 95.56, it's lowest reading since October 2016. The EUR traded up to 1.1443, a fresh 2 year high, while USD/JPY traded down to 111.86. U.S. Treasury yields were higher on the positive GDP print, the 2-year note yield added 1.59 bps to 1.3692%, the 10-year bond yield increased 3.7bps to 2.2648%. In commodities news, oil markets rallied for a sixth consecutive session, WTI crude added $0.15, or 0.34%, to US$44.89 a barrel, Spot Brent crude gained $0.30, or 0.21%, to US$47.41 a barrel. Base metals were broadly higher with aluminium (+1.0%) and copper (+1.0%) leading the charge. In US economic data, GDP expanded at a seasonally adjusted 1.4% annual pace in the first quarter of 2017, The figure was revised upward from a the earlier estimate of 1.2%. The change was mostly due to a revision in the consumer spending rate from 0.6% to 1.1%, consumer spending makes up more than two thirds of economic activity in the US. Initial jobless claims rose 2k to a seasonally adjusted 244k in the week ending June 24. Continuing jobless claims increased to 1.948M. In Asia today, as I write the Nikkei sits at +1.18%, the Shanghai composite is at -0.19%, the Hang Seng at -0.88%, and the ASX S&P 200 at +1.48%. Tonight we have personal income, consumer spending, core inflation, Chicago PMI, and consumer sentiment out of the US; Inflation data out of the Eurozone; and unemployment numbers out of Germany.

PRECIOUS: A range-bound session for the precious in the absence of any real catalyst for price action. Gold traded through $1250 soon after the open in Asia, and the elevated SGE premium at $11+13 saw Chinese buying push the market to the days high of $1253, though flows were lighter than in recent sessions. The yellow metal started to slide in late Asian hours as USD/JPY spiked, falling back through $1250 in London AM. Further selling saw the metal hit the days low of $1239 not long after the open in NY, however the rebound was fairly swift and gold closed out the session at $1245. Silver gave back the early Asian gains to finish the day lower at $16.58. PGMs closed marginally lower. The Philadelphia gold and silver index lost 2.4%. Gold ETFs bought 125k ozs overnight. In todays trading, gold has been range-bound between $1243-48 as the SGE premium has come off slightly to $10 above loco London. The yellow metal is sitting at $1243.80 as I write. Silver is trading sideways, the grey metal is at $16.62 as I write. PGM's are flat. Gold appears to be sitting in the middle of the range at present, lacking a catalyst for price action in any direction. Central banks seem to be moving toward a more hawkish view and the resulting rise in the bond yield curve is putting downward pressure on gold prices. The US dollar has softened, though this does not appear to have had the positive effect on price as we might have hoped. Even the geopolitical tension that has characterised the first half of 2017 has been somewhat more subdued over the last few weeks. The technical support at $1239 appears to be holding firm and we expect nearest resistance at this weeks high of $1254.

 

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 26 Jun 2017

MACRO: New Home Sales in the U.S. recovered during May, increasing +2.9% MoM (exp: +3.7%) to a seasonally adjusted 610k annualised pace. The monthly print follows an upwardly revised -7.9% slump during April (prev: -11.4%), with the recovery being led by gains in the West (+13.3%) and the South (+6.2%), however tempered by a -25.7% decline in the Midwest. Inventory of new homes increased +1.5% to 268k units during May, at current sales pace taking 5.3 months to clear. Both the median house price and the average sales price hit record high levels last month, increasing to USD $310,200 and USD $406,400 respectively. IHS Markit reported their U.S. Composite PMI output index eased during June (flash), sliding to 53.0 from 53.6 previously to mark the slowest upturn in business activity in three months. The Markit Services PMI (flash) also slowed to 53.0 during June (exp: 53.5) from 53.6 previously, while the Markit Manufacturing PMI (provisional) pulled back to 52.1 (exp: 53.0) from 52.7 previously. Chief Business Economist at Markit, Chris Williams, commented with the release: "The economy ended the second quarter on a softer note. The June PMI surveys showed some pay-back after a strong May, indicating the second-weakest expansion of business activity since last September. The average expansion seen in the second quarter is down on that seen in the first three months of the year, indicating a slowing in the underlying pace of economic growth." A positive session for oil futures and further gains to technology stocks helped to see the major U.S. equity indexes generally higher on Friday. The S&P 500 added +0.16% to close the session at 2,438.30 points, supported by wins to energy (+0.75%) and information technology (+0.67%). The tech-laden Nasdaq outperformed to close +0.46% higher, while the DJIA ended generally unchanged, ticking down just -0.01% to 21,394.76 points. On a weekly basis the Nasdaq bounced +1.8%, the S&P 500 tacked on +0.2%, while the DJIA was relatively unchanged. Oil futures pushed higher on Friday, however were unable to recover from softness earlier in the week to book a fifth consecutive weekly decline. WTI crept +0.6% higher to settle just above USD $43 per barrel, however on a weekly basis the benchmark sunk -4.4% to fall into a bear market. Brent crude closed +0.7% higher in London on Friday to see the weekly result at -3.9%. U.K. stocks ended trade lower on Friday, posting a fourth consecutive session decline (longest such streak since April) as softer crude prices in Europe weighed upon the FTSE 100 (-0.2%).

PRECIOUS: Gold turned higher on Friday amid a softening greenback, bouncing off support around USD $1,250 to end the session +0.33% higher. Asian trade was a relatively muted affair, holding a narrow range throughout the session, however seeing solid underlying support from China to keep the price action buoyant. Early European names saw the metal through USD $1,255 on a mild stop loss run, while the session high of USD $1,259.40 came as the EUR ripped higher. The latest commitment of traders report shows sizeable long liquidation, while net futures and options length is sitting at a near 5-week low. Asian trade today saw early session interest take the metal toward the Friday high print, however a lack of follow through buying saw sellers wrestle back control into the Shanghai open. Gold had a generally sedate afternoon session to track either side of USD $1,255 in uninspiring trade, looking to hold support around USD $1,250 - $1,255 to continue its recent uptrend. Silver tracked higher on Friday to consolidate above the USD $16.50 support level, favored by a softer greenback to end the session +0.66% higher. Silver inched through Friday's high early Asian trade today, however much like gold, was unable to find enough interest to sustain the gains. Silver positioning has fallen in recent days, however driven by increased shorts rather than exiting longs. The main talking point on Friday was undoubtedly palladium's price action, collapsing nearly -4% following in increase in NYMEX futures margins. Both platinum and palladium saw muted action during Asian trade to kick off the week, trading with a modest offered bias within a narrow range. Data releases tonight include German IFO survey results, U.S. Durable Orders, U.S. Capital Orders and the Dallas Fed Manufacturing Index.

 

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

DAILY REPORT : Wed 5 July 2017

MACRO: North Korea test fired its first intercontinental ballistic missile (ICBM) at around 9:40am local time on Tuesday. The ICBM is expected to have a range of at least 3,500 miles, meaning it would be able to reach Alaska. The US has requested a closed door meeting of the UN Security Council, expected to take place on Wednesday. US markets were closed for the 4th of July holiday. European shares were lower, the EuroSTOXX lost 1.11 points, or 0.29%, to 382.30, the Frankfurt DAX fell 38.18, or 0.31%, to 12,454.50. The London FTSE 100 shed 19.86, or 0.27%, to 7,308.5. In currency markets, the US dollar index added 0.14% to 96.326, the EUR traded down to 1.1340, while USD/JPY traded up to 113.30. In commodities, oil markets were narrowly mixed as Brent slipped $0.07, or 0.14%, to $49.61 a barrel, while WTI edged higher $0.01, or 0.02%, to $47.08 a barrel. Base metals were mostly lower, with nickel (-2.24%) taking the biggest hit. There was no economic data release from the US due to the holiday. In Asia today, as I write the Nikkei sits at +0.03%, the Shanghai composite is at +0.24%, the Hang Seng at +0.35%, and the ASX S&P 200 at -0.22%. On the economic calendar tonight we have factory orders and FOMC meeting minutes out of the US; with Markit Services and Composite PMI, and retail sales out of the Eurozone.

PRECIOUS: Quiet day for the precious as US markets close for the holiday. Gold opened at $1221 in Asia and traded within the $1221-1225 through the day as the SGE premium sat around $9 over loco London. The high of $1226 was printed during the PM session as USD/JPY dipped below 113. The yellow metal traded tight $3 range through London and NY hours, finishing the session at $1222. Silver gave back early Asian gains with a sharp fall during the day, and ultimately finished where it started. PGM's fared better, platinum put on 1% to close at $912 while palladium surged $15 to the high of $858. Gold ETF holdings were unchanged overnight. In today's trading, Gold was well bid through the AM as USD/JPY dropped below 113 once again. SGE premium creeping up to $9-10. The market printed a high of $1228.50 before slipping on the dollar rebound, the yellow metal is at $1225.90 as I write. Silver traded to a high of $16.19 and is sitting at $16.15 as I write. PGM's are flat.

 

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

DAILY REPORT : Thursday 29 Jun 2017

MACRO: Pending Home Sales in the U.S. continued to slide during May, registering the third consecutive monthly decline according to the latest National Association of Realtors data. The NAR index declined -0.8% MoM (exp: +0.5%) to follow a downwardly revised -5.8% during April (prev: -5.4%). Pending sales were down -1.3% in the West, -1.2% in the South, -0.8% in the Northeast, while the Midwest was unchanged. The NAR's chief economist, Lawrence Yun commented with the release, "Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast." Equity markets in the U.S. recovered from previous session declines on Wednesday, led by strong performances to financial stocks as the 10-year yield continued to rally (2.22%). The DJIA added +0.68% to 21,454.61 points as J.P. Morgan helped to support the bourse with a +2.01% gain. The S&P 500 was led +0.88% higher by financials (+1.58%) and technology (+1.32%), ending the session at 2,440.69 points to post the largest single-session gain since April 24. The Nasdaq meanwhile recovered the majority of Tuesday's -1.61% fall, surging +1.43% on Wednesday to book the largest single-session gain since November 7. Oil futures recovered late in trade on Wednesday, jumping during New York hours following mixed data releases in recent days. The U.S. EIA reported on Wednesday that domestic crude production fell by 100,000 barrels per day to 9.25 million barrels per day during the week ended June 23, while U.S. domestic supplies edged up 100,000 barrels last week, a far cry from the 3.25 million barrel decline expected. WTI added just in excess of +1% to settle at USD $44.74 per barrel for a fifth consecutive session increase, while Brent crude jumped +1.4% to USD $47.31 per barrel. Equities in the U.K. were pressured lower by a stronger sterling on Wednesday, as the local currency found legs after BOE Governor Mark Carney said interest rates may need to increase should the U.K. economy continue to strengthen amid softer consumer spending. The benchmark FTSE 100 declined -0.63% to close at its lowest level since May 11, however declines were tempered somewhat by gains to energy and commodity stocks. In Europe markets ended trade modestly lower, seeing whippy trade amid a volatile EUR following comments from ECB Vice President Vito Constancio noting that President Draghi's recent comments did not state anything new that was not totally in line with the ECB's current policy. The Europe Stoxx 600 eased just -0.04%, however still booked the lowest close since April 21, while the German Dax slid -0.19%.

PRECIOUS: Gold spent Wednesday's session within a relatively narrow range, seeing uninspired trade hold the metal around the key pivot point of USD $1,250. Early Asian interest pulled the metal away from New York's soft close, edging back through USD $1,250 in Shanghai as physical demand out of the far East supported the price action. A modest bid tone in Europe saw the session high of USD $1,255 printed, while bid equities in New York restricted any further gains to see gold end the session generally unchanged at USD $1,250. ETF holdings ticked up modestly on Wednesday (100k ounces), while short dated vols continue to remain well offered. Asian hours on Thursday once again saw solid interest from the far East, dragging gold away from USD $1,250 in early pricing as the on-shore premium once again traded bid against loco London gold (USD $12). Ranges have narrowed leading into financial year end and while interest around USD $1,250 continues to keep the metal buoyant, any moves to the top-side are met with a wall of offers. Short-term support sits around USD $1,250, while below this the 200 DMA continues to prop up the market at USD $1,234.50. Silver continued to see interest in Asia today following Wednesday's +0.8% gain (from opening levels in Asia). The grey metal tested toward USD $16.90 as the greenback eased lower, now close to +3% higher in just over a week (21 June low of USD $16.37) and targeting a test of USD $17. After enduring whippy trade on Wednesday platinum is still struggling to consolidate around USD $920 - $925, while palladium held a tight range during Asian hours today, not straying far from USD $860. Data tonight includes German CPI, U.S. GDP, Personal Consumption, Core PCE, Initial Jobless Claims 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.

DAILY REPORT : Friday 23 Jun 2017

MARKETS/MACRO: US equities were narrowly mixed despite a rally in the healthcare sector as the US Senate released a draft of it's healthcare bill. The Dow lost 12.74 points, or 0.06%, to 21,397.29, the S&P 500 slipped 1.11 points, or 0.05%, to 2,434.50, and the Nasdaq edged higher 2.73 points, or 0.04%, to 6,236.69. There were wins for healthcare (+1.05%), while consumer staples (-0.66%) and financials (-0.64%) led the laggards. European shares were mixed, the EuroSTOXX increased 0.03 points, or 0.01%, to 388.53, Frankfurt DAX gained 19.74, or 0.15%, to 12,794.00. The London FTSE 100 fell 8.50, or -0.11%, to 7,439.29. In currency markets, the US dollar Index eased 0.03% to 97.532, the EUR traded up to 1.1177, while USD/JPY traded down to 110.94. U.S. Treasury yields were lower. 2-year note yield lost 0.81bps to 1.3401%. The 10-year bond yield fell 1.75bps to 2.1459%. In commodities news, a slight rebound in the oil markets after hitting 10 month lows, WTI crude added $0.49, or 0.47%, to US$42.72 a barrel, Spot Brent crude gained $0.38, or 0.85%, to US$45.20 a barrel. Base metals were higher, with zinc (+2.27%) leading the gains. In US economic data, the Conference Board's leading economic index increased 0.3% in May from a rise of 0.2% in April, inferring continued steady growth in the US economy. Initial jobless claims rose 3k to a seasonally adjusted 241k in the week ending June 17. Continuing jobless claims increased to 1.94M. In Asia today, as I write the Nikkei sits at +0.10%, the Shanghai composite is at -0.55%, the Hang Seng at +0.01%, and the ASX S&P 200 closed at +0.11%. We have Markit manufacturing PMI (flash), Markit services PMI (flash), and new home sales out of the US; along with Markit manufacturing PMI (flash) and Markit services PMI (flash) out of the Eurozone.

PRECIOUS: Positive session for the precious as gold finishes above $1250.Gold opened on the bid in Asia, trading through the $1250 in the AM session.Good buying out of China saw the market peak at $1254 as the SGE premium was steady around $10.London hours had the metal softening but there was good support to be found at $1250.A pop to the earlier highs on NY open was followed by a slide back to $1247 as the USD gained strength against the yen. The yellow metal managed to close out the day just ahead of $1250.Silver gave back some of the early Asia gains but still finished in positive territory at $16.56. PGM's were relatively unchanged, platinum and palladium closing at $924 and $889 respectively. The Philadelphia gold and silver index added 1.95%. Gold ETFs bought 14kozs overnight. Gold opened at $1249 but found the bid early, the market still appears to be well supported at the $1250 level with SGE premium is at $9 over loco London. The market is tracking quietly higher through the afternoon and touched the high of $1253.50 moments ago as we see the greenback soften, the yellow metal is at $1253.40 as I write. The nearest resistance is at the weeks high of $1257, following that a run through $1260 could trigger technical buying and a push higher for the XAU. Silver is enjoying a steady climb today, the grey metal is sitting at the days high of $16.64 as I write. Both platinum and palladium are narrowly in positive territory as I write.

 

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

DAILY REPORT : Tuesday 4 July 2017

MACRO: US equities enjoyed a positive start to the second half of 2017 with the markets mostly higher on the back of a strong performance from the energy and financial sectors ahead of the July 4th holiday. The banks were buoyed by an uptick in treasury yields following the release of positive manufacturing data from the ISM. The Dow added 129.64 points, or 0.61%, to 21,479.27, the S&P 500 rose 5.6 points, or 0.23%, to 2,429.01, and the tech-heavy Nasdaq slipped 30.36 points, or 0.49%, to 6,110.06. There were wins for energy (+2.01%) and financials (+1.34%) while a continuing decline in tech (-0.85%) and losses for utilities (-0.54%) weighed on the markets. European shares enjoyed a strong rally as financials, energy and the miners outperformed. The EuroSTOXX put on 4.04 points, or 1.06%, to 383.41, Frankfurt DAX rose 150.19, or 1.22%, to 12,472.50. The London FTSE 100 advanced 64.37, or 0.88%, to 7,313.00. In currency markets, the US dollar index rallied 0.6% to 96.196, the EUR traded down to 1.1355, while USD/JPY traded up to 113.45. US treasury yields were higher on the upbeat manufacturing data, the 2-year note yield added 2.84 bps to 1.4101%, the 10-year bond yield increased 4.62 bps to 2.3499%. In commodities news, the oil market rally continued for an eighth consecutive session, the longest run of gains so far in 2017. Brent firmed $0.81, or 1.66%, to $49.58 a barrel, while WTI gained $0.96, or 2.09%, to $47.00 a barrel. Base metals were mixed, with zinc (+1.7%) the best performer and copper (-0.15%) leading the losses. In US economic data, the Institute for Supply Management manufacturing index rose to 57.8 in June from 54.9 in May. The reading exceeds economists forecasts of 55.6% and is the highest level since mid-2014. The new orders sub-index rose to 63.5 in June from 59.5 in May. The Commerce Department advised that construction spending was unchanged at an annual rate of $1.23 trillion in May. Economists had predicted a 0.3% decline. The April figure was also revised to show a 0.7% decline, rather than the 1.4% originally reported. Private construction spending fell 0.6% in May following a 0.2% decline in April. In Asia today, as I write the Nikkei sits at -0.28%, the Shanghai composite is at -0.57%, the Hang Seng at -1.70%, and the ASX S&P 200 at +1.55%. On the economic calendar tonight we have PPI data out of the Eurozone. No data releases from the US due to the Independence Day holiday.

PRECIOUS: Horror session for the precious ahead of the US 4th of July holiday. Gold traded at $1242 following the open in Asian hours, this would prove to be the highs of the day as the steady rise in USD/JPY made the market look increasingly soft as the session wore on. The SGE premium was at $9 and this was not enough generate much buying out of China, the metal drifting through the $1239-40 support that had held so well over the past couple of weeks. By London open we were sitting on the 200 dma at $1236, and gold gave up couple more dollars through the AM session. The slide picked up speed on the open in NY, the mid-morning manufacturing data release saw dollar/yen trade above 113 and the yellow metal touch $1219, eventually printing the low of $1218 just prior the close. Silver's trading day mirrored gold's, the grey metal opened at the high and gave up 60c to test $16.00. Somehow palladium managed to avoid the rout, closing flat at $843. The Philadelphia gold and silver index lost 2.19%. Gold ETF's sold 356kozs overnight. In today's trading, gold has oscillated within the $1221-1225 range, reaching the high of $1225.90 as USD/JPY slipped below 113. The SGE premium has remained relatively unchanged around $9 over loco London. The yellow metal sits at $1225.20 as I write. Silver traded to the day's high of $16.19 during the AM session before being dumped to $16.04, the grey metal has pared some of the losses and is trading at $16.10 as I write. PGM's are in positive territory, with palladium surging $15 to print the high of $858 before pulling back to $852 as I write. The increase in bond yields as central banks position to move away from accommodative monetary policy, coupled with the continued strength in equities is weighing heavy on the precious complex. We should see support around the May low of $1214 and below that a break through the $1200 level would be a catalyst for a move lower.

 

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 28 Jun 2017

MACRO: The S&P/Case-Shiller U.S. National Home Price Index showed home prices increased by less than expected during April. The 20-city index added 5.67% YoY (exp: 5.90%) from a 5.88% increase previously, putting further strain on inventories. The Conference Board reported on Tuesday that U.S. Consumer Confidence jumped to 118.9 during June (exp: 116.0) from 117.6 previously. The present situation index led the headline print higher to reach its highest level since mid 2001 at 146.3 from 140.6 previously, however the expectations index eased lower to 100.6 from 102.3 to mark the lowest level since January. The Richmond Fed manufacturing index strengthened during June, increasing to 7 (exp: 5) from 1 previously, led by gains to the shipments index and the new orders index. U.S. equities traded lower on Tuesday as uncertainty over the republican's ability to pass their new healthcare legislation spooked investor's and tech stocks reversed recent session gains. The DJIA sunk -0.46% to end the session at 21,310.66 points after reversing early session gains, while the S&P 500 cratered -0.81% as technology (-1.67%) and telecoms (-1.43%) led all component of the bourse lower with financials (+0.51%) the only exception. The Nasdaq meanwhile collapsed -1.61% as Google parent Alphabet sunk -2.62% following news that European Regulators had hit the company with a €242.2 Billion antitrust fine, while biotech stocks took a hit following news of the cancelled healthcare vote. Volatility was back on the agenda on Tuesday, with Wall Street's fear gauge the VIX Index spiking nearly +12% to mark the largest single-session increase in 6-weeks. ECB President Mario Draghi spoke in Portugal on Tuesday, hinting that the Central bank may pull back monetary stimulus measures as the economy accelerates. While not directly addressing the timing of withdrawal, Draghi highlighted the recent positive developments within the Eurozone, putting particular emphasis on reduced political uncertainty. European equities traded lower on Tuesday, led by weakness across telecoms and industrials, while a stronger EUR following Draghi's comments created headaches for exporters. The Europe Stoxx 600 led declines to hand back -0.79%, while the German Dax pulled back -0.78% and the French CAC sunk -0.70%. Currency majors posted gains against the Greenback on Tuesday, notably the EUR spiked nearly +1.5% to trade above 1.13 following Draghi's comments.

PRECIOUS: Precious metals recovered the majority of Monday's flash crash on Tuesday, seeing gold back above USD $1,250 as the Greenback took a leg lower. Early Asian weakness was reversed once China opened, pulling the metal away from support around USD $1,240, while interest on the European open saw the metal rip through stops around USD $1,250 to print a session high of USD $1,252.90. Pricing during U.S. hours saw the yellow metal back underneath the USD $1,250 pivot point, ending the session just underneath the figure in tight trade for a modest +0.33% gain. Vols have inched marginally higher over the last few days, seeing 1m just underneath 10 after trading in the high 8's briefly last week. Asian hours today saw gold trade with a modest bid bias, running into offers around USD $1,250 in early pricing, before breaking above the figure on the back of solid interest out of the far East. The Shanghai gold exchange saw the on-shore premium move higher once again, testing toward USD $12 over loco London gold and registering solid volumes. Gold looks to be stuck within a USD $1,238 - $1,260 range over the short term, with the 200 DMA underpinning the lower end of the range, while on-going political concerns in the U.S. and global geopolitical concerns support higher price action. After whippy trade on Tuesday in the New York, silver was able to climb above the U.S. high during Asian trade today, printing a USD $17.83 high, before easing into the European open. Platinum once again struggled to consolidate above USD $920 in Asia today, while palladium held firm around USD $860 following Tuesday's soft session. Data tonight includes German Import Prices, U.K. House Prices, U.S. Wholesale Inventories and U.S. Pending Home Sale

 

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 22 Jun 2017

MACRO: Existing Home Sales in the U.S. pushed higher during May, bouncing +1.1% (exp: -0.4%) to follow a downwardly revised -2.5% during April (prev: -2.3%). The monthly increase saw sales at a seasonally adjusted annualised rate of 5.62 million (exp: 5.55 million), while the number of homes on the market increased +2.1%, however supply declined -8.4% from a year ago to see inventory fall for the 24th consecutive month on a year-on-year basis. At the current sales rate, it would take 4.2 months to clear inventory, down from 4.7 months one year ago. Equities in U.S. ended Wednesday generally lower, under pressure from further weakness to oil futures. The DJIA slipped -0.27% to 21,410.03 points as Caterpillar Inc (-3.34%) and du Pont Co (-2.65%) led more than half of the bourse's stocks lower. The S&P 500 (-0.06%) saw weakness across energy (-1.60%) and telecoms (-1.22%) lead eight of eleven major sectors lower, while the Nasdaq Composite bucked the trend to close +0.74% higher courtesy of strength across biotech shares following reports that the Trump administration has drafted an executive order that would ease industry regulations. Oil futures sunk further on Wednesday, dragged to a near 10-month low following a U.S. government report detailing further increases in domestic crude production. The U.S. Energy Information Administration reported that weekly domestic production increased by 20,000 barrels to 9.35 million barrels per day. WTI fell nearly USD $1 or -2.3% to settle at USD $42.53 per barrel, while Brent crude shed over -2.5% to settle below USD $45 per barrel. Markets in Europe turned lower on Wednesday, weighed down by soft trade to energy stocks amid the sell off to oil futures. The Stoxx Europe 600 extended losses from Tuesday's session to book a -0.18% decline, while the German Dax handed back -0.32% and the French CAC 40 fell -0.37%. In the U.K. the FTSE 100 struggled against headwinds generated by a stronger sterling, sliding -0.33% as financial and resource related stocks led the declines.

PRECIOUS: Gold rebounded from a 5-week low on Wednesday, surviving a brief period of weakness leading into New York hours to close toward the session high print. Gold ground steadily higher during early Asian hours on Wednesday, pushing the price toward USD $1,245, while demand out of China underpinned the price action to see the yellow metal around USD $1,247 leading into European hours. Offers leading into the U.S. open saw gold pare gains and trade to the session low of USD $1,240.55, however the weakness was short lived and the metal soon reversed course to once again test higher, with a softening greenback providing support. A softer USD and a risk-off bias following the recent declines to crude saw gold turn higher during Asian hours on Thursday. Stops around the previous session high took gold through USD $1,250 in thin early session trade, while the price action was further supported by interest out of China (premium around USD $10) to see the metal toward USD $1,254 leading into the Shanghai lunch break. Mild profit taking in afternoon pricing brought the metal off the session highs, however early European demand has so far underpinned Asia's gains to see gold toward USD $1,255 as London enters. USD $1,250 should act as a pivot point for the metal over the remainder of the week, with any moves below this likely to see extensions toward support at USD $1,240 and the 200 DMA around USD $1,236. Initial resistance should come in around USD $1,260 - $1,265. Silver rebounded from Wednesday's weakness in Asia today, making light work of USD $16.50, before triggering stops through USD $16.60 on the Chinese open. The grey metal touched a fresh 5-week low on Wednesday after declining below USD $16.40 and still trades almost -6% lower than the June 7th high of USD $17.75. Palladium turned higher on Wednesday on the back the recent supply squeeze, however held a narrow range throughout Asian hours today, while platinum broke through Wednesday's high print to trade above USD $930. Data releases tonight includes U.S. Initial Jobless Claims, U.S. House Prices and U.S. 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.

DAILY REPORT : Monday 3 July 2017

MARKETS/MACRO: U.S. equities closed mostly higher on Friday as Wall Street capped a strong first-half performance - DJIA +8.0% and S&P500 +8.2% YTD. The Dow Jones Industrial Average on Friday rose +62.6 points, or +0.29%, to 21,349.63, the S&P500 inched up +3.71 points, or +0.15%, to 2,423.41 and the Nasdaq was the odd one out, down -3.931 points, or -0.06%, to 6,140.42. The best performing sectors were industrials (+0.76%) and consumer discretionary (+0.56%), while utilities (-0.12%), tech (-0.11%) and healthcare (-0.11%) bought up the rear. European equities retreated for a fourth day as a drop in financial and chemical stocks outweighed a rally in technology companies. The FTSE Euro First 300 index fell -6.53 points, or -0.44% to 1,491.37 and the Euro Stoxx 600 index relinquished -1.29 points, or -0.34% to 379.37. Regionally the DAX shed -0.73%, FTSE100 -0.51% and CAC40 -0.65%. Oil prices rallied higher as concerns about oversupply eased. Earlier in the trading session, the US Energy Information Administration (EIA) released its monthly supply/demand estimates for April, with output being revised down by 190k b/d to 9.08mio b/d. Other data showed drilling activity fell in the U.S. for the first time in 23 weeks, the number of drill rigs operating down 2 to 756 (Baker Hughes). This exuberance may be tempered by news over the weekend that Libya oil production hit another record however. In FX, USDJPY edged up slightly by +0.2% to 112.40 while AUDUSD was range bound last Friday and closed just a touch higher around 0.7690. The dollar index edged up 0.01% to 95.628. In treasuries the 2y note yield inched up +1.25bps to 1.3817% and the 10y bond yield rallied +3.71bps to 2.3037%.

On the data front U.S. inflation eased for the third consecutive month and consumer spending was tepid in May adding further complications for the Federal Reserve as it charts a course for interest rates. The Fed’s preferred measure of inflation, the price index for PCE, rose +1.4% in May YoY (+1.4% expected) from 1.5% a month earlier, the lowest level in six months. Excluding the often-volatile categories of food and energy, so-called core prices were also up +1.4% YoY, the lowest level since December 2015. On a monthly basis, the PCE deflator fell -0.1% (-0.1% expected) in May from an April read of +0.2%. The University of Michigan on Friday said its consumer sentiment index was 95.1 in June, up from a preliminary June reading of 94.5 but down from 97.1 in May. The details for the report were mixed, with current economic conditions rising to 112.5 in June from 111.7 in May, while expectations about the future were down to 83.9 in June from May’s 87.7. The overall sentiment index hit its lowest level since November. Elsewhere, consumer spending - which accounts for around two thirds of U.S. economic activity - was sluggish, rising +0.1% for May (+0.1% expected) according to the Commerce Department. This was down from a read of +0.4% a month earlier. Personal income rose +0.4% in May (+0.3% expected), up from a downwardly revised +0.3% a month earlier. Across the Atlantic Euro area inflation was a touch stronger than expected in June, at +1.3% YoY (+1.2% expected), with core inflation at +1.1% YoY (+1.0% expected). Within the index, services inflation, which accounts for 45% of the index, rose +1.6% YoY. The data hints that euro area inflation is continuing to base but remains a long way short of target 2%. It is evidence that the ECB’s policies are being successful, but not evidence that an early withdrawal of stimulus is warranted. The data complemented the tone of Draghi’s speech earlier in the week that deflationary risks are abating and reflationary forces are emerging.

PRECIOUS: With treasury yields and USDJPY grinding higher for the majority of the day last Friday, gold remained under pressure throughout although did manage to cling onto a $40 handle. In Asia we opened just below $1245 and initially pushed higher on the back of some early SE Asian retail demand. By the time the SGE came on line however we were trading back through $1245. A decent premium of above $10 on the exchange was quickly eroded as the USDCNY began to sell-off quite sharply. The premium traded to a low of $9 as a result and saw some gold demand drop off as the afternoon wore on. Buying out of China has certainly been slowing down over the past few months evidenced by fewer bullion imports, and this trend looks set to continue over the short to medium term. By the time London traders opened for business, the USDJPY began to show some signs of bouncing and gold had a leg lower towards $1240. Around the NYK open gold briefly dipped below $1239 (the 5th time this has happened in an hourly chart and ended as a shadow incidentally), yet recovered with some decent macro buying seen in the low $1240's and below. It was mainly light two way trade into the close between $1240-44 as U.S. traders wind down into independence day long weekend (holiday 4th July, although it is expected a number of participants will take the Monday off also). Ultimately the yellow metal closed around $1241.50. The yellow metal had a fairly lacklustre month, tumbling -2.15% in June as longs unwound. Things are certainly looking better for the half however, H1 gains now sitting around +7.75%. Silver was down -4.4% on the month and a stark -9.0% for the quarter, although retains a positive return for the calendar year of +4.3%. Palladium on the back of supply concerns continues to muscle its way higher, up +3.0% on the month, +6.1% for the quarter and an impressive +24.1% H1.

After opening around $1241.50 and making a brief tick up to $1242.50 the gold began a very slow descent over the course of the morning, with some fast money and macro traders looking for bids. The USD was also firmer across the board which added further momentum to the slide. China were fairly neutral on the SGE open but as the USDCNY began to tick higher the buyers retreated and spot gold lost some its morning support. There were bids sitting at $1240 which were given shortly after the SGE open and the metal fell through $1240 and failed to push back through that for the rest of the day. AUDUSD fell back towards 0.7665 after trading at 0.7695 earlier in the day and the USDJPY pushed back through 112.00 and traded up towards 112.60. Caixin China manufacturing PMI was released early afternoon and was a positive number at 50.4, taking the reading back into expansionary territoy (49.6 prior, 49.8 expected). This was another drain on gold as riskier assets benefitted from the strong numbers. Gold continues to look weak as I write trading down to a low of $1235.70 and silver $16.58. Ahead today there is not a great deal of activity expected with a number of American participants expected to be out for an extended long weekend. On the data front we have a number of European PMI's, Eurozone employment data and U.S. ISM manufacturing and construction spending.

 

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 27 Jun 2017

MARKETS/MACRO: U.S. equities traded generally higher Monday as a rise in the utilities and financial sectors helped offset losses from large-cap technology stocks. The Dow Jones Industrial Average crept up +14.79 points, or +0.07%, to 21,409.55, the S&P500 inched up +0.77 of a point, or +0.03%, to 2,439.07, while the Nasdaq slumped -18.10 points, or -0.29%, to 6,247.149. The best performing sectors were Utilities (+0.78%), Telco (+0.62%) and Financials (+0.53%), while the worst performing sectors were Tech (-0.59%) and Energy (-0.24%). European stocks were firmer, with banks doing the heavy lifting as Italy reached a deal to wind up two failed regional banks and Nestle climbed to a new record high after an activist investor urged changes at the company. The FTSE Euro First 300 index advanced +6.32 points, or +0.41% to 1,529.84 and the Euro Stoxx 600 index gained +1.43 points, or +0.37% to 389.05. Regionally the DAX rose +0.29% on the day, FTSE100 was +0.31% and CAC40 +0.56%. Weak U.S. durable goods orders lent support to the bond market overnight (the benchmark 10y UST yield falling below 2.12% at one point), as the low inflationary growth outlook persisted. On the day the 2y note yield fell -0.81bps to 1.3323% and the 10y bond yield edged down -0.88bps to 2.1335%. Oil prices remained broadly steady as the impact of investors selling abated. Exchange data showed that speculators had cut their net long positions in WTI and Brent to its lowest level in 10 months last week. Traders are also looking ahead to the EIA Energy Conference in Washington, where US shale oil producers are expected to give their view of current market conditions. April WTI crude ticked up for a third session adding +$0.40, or +0.93% to US$43.41 a barrel. FX markets remained fairly subdued overnight. In G10, there still appears a bias to be long USD especially vs EUR and JPY given how little is now priced through 2018. Investors will look to Yellen's speech tonight to see if she keeps up her defiant tone on the recent turn in US inflation & PCE on Thursday.

In Data overnight US durable goods orders disappointed, falling -1.1% MoM in May (-0.6% expected) after falling a downwardly revised -0.9% a month earlier. Meanwhile core orders fell -0.2% MoM (+0.4% expected), the data suggesting there may be some loss of momentum in the recent recovery in equipment spending. The German June IFO, which measures the business climate across manufacturing, trade and construction, rose to 115.1 (114.5 expected) after positing 114.6 in May, continuing the run of strong survey data for the euro area.

Over the past 24 hours, the Fed’s Williams and Dudley both hinted at a desire to continue normalising US monetary policy. Williams noted that, “some special transitory factors have been pulling inflation down…. But with some of these factors now waning, and with the economy doing well, I expect we’ll reach our 2% goal sometime next year”. Williams added, "Gradually raising interest rates to bring monetary policy back to normal helps us keep the economy growing at a rate that can be sustained for a longer time". Dudley stated that “Monetary policy makers need to take the evolution of financial conditions into consideration and when financial conditions ease – as has been the case recently – this can provide additional impetus for the decision to continue to remove monetary policy accommodation”. So, at least with regards to these senior Fed members, the message has not changed despite recent data hiccups. All eyes will be on Fed Chair Yellen's comments later today for more insight.

PRECIOUS: The talk of financial markets yesterday was the dramatic Comex led sell-off in gold, right around the time of the London open. In what is suspected to have been a 'fat finger' or erroneous trade in August gold, the metal plunged $20 from around $1254 to $1236.40 in a matter of seconds. Some 18,000 lots (1.8 million oz) were dumped on the market which triggered the rout and left traders scratching their heads as to the cause. Prior to this Asia had been somewhat smooth sailing, gold ticking up early on but failing to advance through $1260 (GCQ7). As the morning progressed the USDJPY steadily ground its way higher which kept gold on the backfoot, despite pockets of Asian buying on the way down. The metal meandered slowly lower and then held between $1254-56 throughout the Asia afternoon. The above mentioned sweep then occurred as early European traders manned their stations, thrashing the gold $20 lower in a matter of seconds as algo's etc kicked in. The posted low was $1236.40, just above the 200 dma ($1235.30), trading there very briefly before sharply rising back towards $1245. Some weak macro longs remained on the offer following the dip and capped any upside recovery beyond $1248. Vols went briefly bid on the sell-off lower, but sellers returned in the aftermath, particularly in the 1m-2m area. Gold 1m atm ol is 9.0, 3m 10.65, 6m 12.2, 12m 13.75. Gold had another dip in early NYK trade although this was quickly paid, returning to $1245 and trading around that into the close. In summary the gold managed to survive the brutal sell-off in London and not proceed lower, we do however think that the gold bulls confidence will be dented. Elsewhere, some worrying signs in the physical market emerged, with imports of gold into china from HK falling for a second consecutive month. During May 44.8 tons was imported, compared with 74.9 tons in April and 107.4 in March.

In Asia today traders where still trying to ascertain the reason for yesterday's sharp sell-off with a vast amount of media coverage on it, yet no clear reason. The metal had managed to refrain from falling further with some light Asian buying seen below $1240 and some technical profit taking orders seen ahead of the 200 dma (today $1234.90). Flows were modest this morning in Asia with caution from traders prevalent leading into the SGE and Tocom opens. Gold trickled gingerly lower into the SGE open, but once that opened some light buying was seen on the exchange which helped to push spot gold back towards the opening levels. The premium on the SGE remained at $8-10 over the loco London price which kept the bids active throughout the afternoon. Around the time London came in there was some decent buying seen through Comex. The market consequently sharply rose through $1247 all the way to $1252 in a matter of seconds, as stops were tripped. Since then we have held onto the 1250 handle with bids accumulating at that level. It will be interesting to see whether gold can continue higher today.

 

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

DAILY REPORT : Wed 21 Jun 2017

MARKETS/MACRO: U.S. equities traded lower Tuesday, pulling back from Monday's record highs, as oil prices plummeted to their lowest levels since November 2016. The Dow Jones Industrial Average fell -61.85 points, or -0.29%, to 21,467.14, the S&P500 declined -16.43 points, or -0.67%, to 2,437.03 and the Nasdaq slumped -50.981 points, or -0.82%, to 6,188.031. The best performing sectors were Healthcare (+0.3%) and Utilities (+0.1%), while every other sector posted a negative return led by weakness in Energy (-1.25%) and Consumer Discretionary's (-1.25%). European equities started the day on a positive footing, although were quick to retreat as the crude began to decline, forcing energy stocks lower. The Euro First 300 index retreated -10.10 points, or -0.66% to 1,530.69 and the Euro Stoxx 600 dipped -2.73 points, or -0.70% to 389.21. Regionally the DAX shed -0.58%, FTSE100 -0.68% and CAC40 -0.32%. Oil prices weakened again with the recent rout turning into a bear market according to JP Morgan, as persistent concerns surrounding the over-supply of oil weighed on prices. April WTI crude fell -$0.97, or -2.2% to $43.23 a barrel, its lowest level in 10 months. The fall came despite a reduction in crude inventories of ~2.72m barrels. Other energy prices also suffered, with Brent crude, gasoline and heating oil all falling more than -2%. Global yields fell led by gilts, as BoE’s Mark Carney sounded warnings over the complications of Brexit negotiations. Gilt yields fell 3-5bps across the curve, while the 2y U.S note yield fell -1.2 bps to 1.3439% and the 10y bond yield compressed -3.32 bps to 2.1547%. The yield curve continues to flatten with the back end falling further than the front end on weaker oil prices and a less bullish future growth outlook.

With no significant data releases overnight, attention was on Central Bankers. Chicago Fed President Charles Evans said on Tuesday he is increasingly concerned that a recent softness in inflation is a sign the U.S. central bank will struggle to get price pressures back to its 2% objective. "In a world of global competition and new technology, I think competition is coming from new places. New partners are choosing to merge and sort of changing the marketplace, and there's more competitive pressure potentially on price margins". Across the Atlantic, BoE governor Mark Carney presented a dovish front at a speech at Mansion House saying, "From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment [rate rises]”. With the dovish comments GBP was whacked, trading some 100 pips lower on the day.

PRECIOUS: The commodities sector as a whole was under pressure yesterday led by crude, with gold continuing to new lows, although managing to close the day modestly lower. As expected Asian traders were decent buyers of gold, pushing the metal off the $1243.50 open level up towards $1246 shortly after the SGE open. Decent buying was expected although volume wise it was better than anticipated, especially given the strength of the USD. The SGE traded at a premium of +$10 over the loco London price for onshore traders, up from about $8-10 a day earlier. Over the Asia afternoon the yellow metal continued to plod its way higher, running into a bit of technical selling ahead of $1250 and capping out at $1247.60 for the time being. It slowly dropped off in London only to pop higher right on the NYK open and post a very brief intra-day high of $1247.90. There was decent selling there ahead of the $1250 mark yet again and gold quickly did an about face, trading to the days lows over the next few hours ($1242.10). The momentum certainly seems to be lower for the moment, that said, there does seem to be a little renewed buying interest below $1250, so we feel a period of consolidation is likely. Initial support sits at $1240, while resistance sits at $1248-50 (100 dma) and then $1256-58 (50% retracement of the May-June rally & 50 dma). Gold vol continues to soften moving further into the single digits - 1M ATM vol currently 9.25 which is a 10 year low.

ASIA TODAY: Gold ground steadily higher this morning and for much of the day for that matter. We opened at $1243.25 and some light SE Asian buying was prevalent early on in the day pushing the price towards $1245. China came in and were buyers yet again despite the premium dropping back below $10 over the loco London price. Flows remained skewed to the buy side into the afternoon with the price topping out just shy of $1247 and maintained a $1245-47 range into early European trade. In other markets equities were lower, following their European and U.S. counterparts, the Nikkei at time of writing sitting at -0.45%, ASX200 -1.6% and Hang Seng -0.5%. The Shanghai Composite bucked the trend however currently sitting up +0.2%. WTI crude clawed back some ground currently trading at $43.55 (+0.4%) and base metals were higher Nickel and Zinc leading the charge. Another quiet day on the data calendar today, the only thing of note being 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.