DAILY REPORT : Friday 09 Mar 2018

MARKETS/MACRO: Draghi’s comments that trade tariffs could hurt growth and inflation and the USD could strengthen took the shine off the euro yesterday. The euro initially rallied and bunds sold off, but these moves unwound as the European session progressed. Attention turned to Trump’s signing of the announced tariffs on steel and aluminium later in the day and some speculation that they may not be as far reaching as initially announced. U.S equity markets as a result pushed higher towards the close after looking soft during the middle of the day. The Dow Jones Industrial Average gained +93.85 points (+0.38%) to 24,895.21, the S&P500 advanced +12.17 points (+0.%) to 2,738.97 and the NASDAQ added +31.296 points (+0.42%), to 7,427.945. The best performing sector was Consumer Staples, while energy lagged. Across the Atlantic, European equity indices surged to a one-week high after the ECB offered a brighter assessment of economic growth within the Euro-Zone. The EuroFirst 300 rallied +14.85 points (+1.02%) to 1,473.37 and the Euro Stoxx 600 leapt +3.91 points (+1.05%) to 376.62. Regionally the DAX ran +0.90% higher, the FTSE100 inclined +0.63% and the CAC40 rose +1.28%. Crude oil fell overnight, WTI down -$0.95 (-1.5%) to $60.33, as the market continues to struggle to shake off an excess supply. The supply is from a growing US shale patch (albeit at a slower rate), which is more than offsetting cuts in output from OPEC and its allied members. A stronger dollar and a rise in equities also did no favours for the oil market. In FX, EURUSD ended a volatile session at the end the day lower by -0.8% to 1.2312 while USDJPY ticked up +0.2% to 106.23. The German 10y bund yield eased -2.7bps to 0.63% and the US 10y bond yield retreated by -2.6bps to 2.86%.

President Donald Trump followed through on his pledge to impose stiff tariffs on imported steel and aluminium, while excluding Canada and Mexico and leaving the door open to sparing other countries on the basis of national security. The president signed a proclamation authorising the tariffs at a meeting Thursday afternoon with workers from the steel and aluminium industries. The U.S. will levy a 25% duty on steel and 10% on aluminium, the same level Trump promised when he revealed the plan March 1. The tariffs will take effect in 15 days, according to an official who was there. “Today I’m defending America’s national security by placing tariffs on foreign imports of steel and aluminium”, Trump said, flanked by workers from the industries and economic advisers who had backed the plan.

On the data front, initial jobless claims in the U.S rose by +21k to 231k in the seven days ended March 3, which is the highest level in six weeks. Jobless claims are always a little volatile throughout February because of winter weather and other seasonal quirks, but the latest swing doesn’t alter the picture of a vibrant employment scene. Continuing claims fell by -65k to 1.87 million over the period. The ECB left its refinancing rate unchanged at 0%. Mario Draghi said economic growth in the Eurozone is improving faster than the bank had anticipated, leading it to nudge up its 2018 growth forecast to 2.4% from 2.3%. It slightly reduced its 2019 inflation forecast to 1.7% from 1.9%.

PRECIOUS: It was a reasonably subdued session for gold yesterday, the metal edging lower pre-SGE, but finding some demand below $1325 from Japanese banks and early Chinese investors. Once the SGE opened up for trade the price recovered with the premium jumping back through $8 and light demand around. The spot price ticked higher throughout the afternoon although there was noticeable supply around $1330 futures ($1328.50-1329.00 spot). The EURUSD was volatile following the ECB announcement spiking at first but then gradually making its way lower. This prompted gold to gradually retreat throughout the European day and stabilise around $1325 leading into the NY open. News headlines began to do the rounds early in NY that perhaps President Trump's tariffs on materials would not be as far reaching as initially expected, with rumours doing that rounds that there may be some exemptions - namely for Canada and Mexico. This saw the safe-haven gold give up some more ground and briefly trade below $1320. Again though we saw orders for Asian names soaking up the selling around $1320. It still seems we are trading the range at this point with support between $1310-20 likely strong and selling interest above $1335 expected to slow down any bounce.

In Asia today we are expecting a reasonably slow one in lieu of the U.S non-farm payrolls which are to be released later today. Gold traded with a small downside bias leading into the SGE open this morning slowly trickling lower towards $1320. The selling however began to very gradually pick up steam following the headline: *TRUMP TO ACCEPT INVITE TO MEET WITH N. KOREA'S KIM: WHITE HOUSE. The surprise announcement came from Chung Eui-yong, South Korea's National Security Director on White House grounds following high level talks. Trump has reportedly agreed to meet Kim Jong Un by May, after the latter extended an invitation and offered to suspend nuclear and missile tests. USDJPY rose steadily following the headlines and gold came under further pressure as a result, slipping beneath $1320. At time of writing gold has failed to recover back through $1320 despite Asia buying. The relative USD has strength has kept a lid on a move higher. We are currently sitting around $1317.50-1318.50.

On the data calendar, we have had Chinese CPI which came in over expectation today at +2.9% (+2.5% expected, +1.5% prior) as well as PPI which was a touch under at +3.7% (+3.8 expected, +4.3% prior) - the USDCNY gradually pushing lower on the back of the release. We also had the BoJ, who came back with their fastest decision since June 2016. They maintained the policy balance rate at -0.10% and JGB purchasing targets as expected. They also kept inflation expectations unchanged. Ahead today the main focus point will be the U.S employment report, but we also have German, French and UK industrial production and U.S wholesale inventories.

 

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

 

DAILY REPORT : Monday 05 Mar 2018

MARKETS/MACRO: The market remained cautious Friday as fears of a trade war heightened amidst the U.S decisions to impose trade tariffs on steel and aluminium imports. European Union officials have said they would respond "firmly" if U.S President Donald Trump presses ahead with his plan for steep global duties on metals. EU trade chiefs are considering slapping 25% tariffs on around $3.5bn (£2.5bn) of imports from the U.S, according to Reuters. President Trump fired right back Friday saying that the U.S “will simply apply a TAX” on cars made in Europe if the European Union retaliates. Despite the concerns most U.S equity indices managed to close in the black. The Dow Jones Industrial Average fell -70.92 points, or -0.29%, to 24,538.06, the S&P500 rose +13.58 points, or +0.51%, to 2,691.25 and the NASDAQ Composite gained +77.305 points, or +1.08%, to 7,257.867. European equities finished sharply lower Friday, trading for the first time since Trump announced the potential resource tariffs. The Euro First 300 Index slumped -31.33 points (-2.13%) to 1,437.14 and the Euro Stoxx 600 retreated -7.82 points (-2.09%) to 367.04. Regionally the DAX tanked -2.27%, FTSE100 -1.47% and CAC40 plunged -2.39%. Crude oil prices were also higher, with Brent up nearly 1% as traders returned their focus to supply-side issues. A relatively unchanged number of rigs drilling for oil in the U.S saw concerns about surging output ease. Chevron also reported that the Alba oil field in the North Sea was shut in, following a weather related power outage. However, this was mitigated by data showing that Libyan oil production jumped to 1.19m b/d in February, up +22% from the previous month. In FX, USD was softer, USDJPY moderating -0.7% to 105.51 and EURUSD was up +0.7% to 1.2353. Treasuries slumped with the dollar; the US 10y bond yield higher by +5.7bps to 2.86% and the 2y note yield up +3.01 bps to 2.24%.

On the data front, the University of Michigan’s consumer sentiment index in February was the second-strongest it has been in 14 years, though the final reading was revised lower a touch to 99.7 (99.5 expected, 99.9 estimated prior). Expectations for future inflation was little changed in February. Consumers on average saw 2.7% inflation over the next year and 2.5% inflation in five to 10 years, the same as in January. Germany’s retail sales fell by -0.7% MoM in January in real terms, missing the BBG consensus forecast for a +0.7% gain and came after an upwardly revised drop of -1.1% in December.

PRECIOUS: The Trump trade war rhetoric strengthened gold's position on Friday in line with a weaker USD and softer global equities. During Asia gold predominantly drifted sideways clinging to $1315-17 quietly, following Thursday's late surge after Trump's tariff comments. The SGE premium remained stable around $8-9 over the loco London price and Chinese participants were relatively neutral, the metal more than happy to drift sideways into the European morning. Volatility increased marginally during this period, yet the metal still comfortably clung around $1315-17. Tumbling equities, weaker USD and sliding yields around the NY open shot the yellow metal through $1320 to $1324 and eventually on to the $1325.40 high, although there seemed to be some decent producer and technical selling around $1325, capping proceedings. We briefly dipped back below $1320 although it was short lived, the gold ultimately closing at $1322.50 to round out the week marginally softer (-0.45%). We feel that the current macro environment should remain supportive for gold in the short term, with the divisive Italian elections a close call and ongoing global tension regarding trade protectionism a certainty. We still like to buy dips around $1300-1310. Commitment of traders report showed speculators cut their COMEX long gold position to the least bullish in 8 weeks whilst silver specs increased their net short position to the most bearish on record going back to 2006 (Short only total is the highest in 2 months). This may help silver to outperform in the short term in the event of a sustained rally. Platinum and palladium remain under pressure after steeper than expected U.S car sale declines for February and after the mayor of Rome announced that the city will ban diesel cars by 2024. This follows the decision from the German courts earlier this week allowing a legal prohibition on these cars.

Gold opened this morning and pushed higher immediately on the back of some early Asian trading house demand. By the time the SGE kicked things off, spot gold was trading around $1325, soon receiving a boost from Chinese participants. The premium on the exchange was a touch softer than what we saw last week ($7-8 during the am), although still holds above $7 which has remained unbroken for some time now, indicating clear demand post Chinese NY. Spot gold jumped through $1325 and failed to venture back under there, up to time of writing at least. Silver remained bid throughout the morning holding firmly above $16.50 and trading up toward $16.60. The PGM's showed modest signs of recovery early, platinum still up on the day but palladium flat. In other markets equities continue their wash out, the Nikkei currently -1.05%, Hang Seng -1.15%, Shanghai Composite -0.2% and ASX200 -0.7%. Both WTI and Brent are up around +$0.25 at $61.48 and $64.62 respectively, while the USD is mixed vs. the majors. Looking ahead today on the data calendar - Eurozone, U.S and British Markit Services and Composite PMI's and U.S ISM non-manufacturing composite.

 

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 Feb 2018

MACRO: New home sales in the U.S. slipped to a 5-month low during January, falling -7.8% (exp: +3.5%) to book a second consecutive monthly decline following December’s -7.6% print. Weakness in the Northeast (-33.3%) and the South (-14.2%) weighed upon the headline print, while sales in the West inched +1.0% higher and sales in the Midwest surged +15.4%. Near record low inventory, particularly within the lower end of the market is driving up prices and sidelining first home buyers. The Chicago Fed’s index of national economic activity eased modestly during January, slipping to 0.12 (exp: 0.25) from a downwardly revised 0.14 (prev: 0.27) during December. Weakness across the factory sector was the main drag on the headline figure, sliding to -0.01 during January. Smoothing out month-to-month volatility, the three-month moving average declined to 0.12 in January from 0.26 in December. Equity markets in the U.S. ripped higher on Monday, buoyed by broad based gains led by technology shares. The DJIA ended trade +1.58% higher at 25,709.27 points, while gains to technology (+1.58%) and financials (+1.51%) saw the S&P 500 +1.18% higher to 2,779.60 points. Oil futures extended recent gains on Monday in New York, underpinned by political issues in Libya, which has shut down the el-Feel oil field. WTI ended the session +0.6% higher to USD $63.98 per barrel, while Brent crude added +0.3% to USD $67.50 per barrel. The greenback traded mixed, however ultimately ended the session with a modest decline as the DXY index eased -0.1%, while treasury yields softened to see the 10-year down around -0.9bps to 2.856%.

PRECIOUS: Bullion saw mixed trade on Monday, subject generally to dollar flows to extend to a USD $1,341.50 session high in London, before paring gains in New York. Chinese interest pushed the on-shore premium higher to underpin the spot market, making light work of resistance around USD $1,330 to extend gains to USD $1,338 into the lunch break. Afternoon price action continued to see the yellow metal well supported, as early European names took over some of the heavy lifting from the far East to push the metal above USD $1,340. The bid tone was however extinguished once New York opened and bullion pared gains against a stronger greenback, although notably able to hold USD $1,330, which now will be viewed as a short-term pivot point. Vols softened modestly on Monday, with 1m sitting around 10.35, 6m at 11.3 and 1 year toward 12.25.

Bullion opened with a mild offered bias in Asia on Tuesday amid light flows, holding within a narrow USD $1,331 - $1,333 range leading into the Chinese open. A break below 107.00 for USD/JPY leading into the Shanghai open gave the yellow metal a boost toward USD $1,335, while further USD/China weakness further supported the metal to a USD $1,336.80 session high. Firm interest on the Shanghai exchange kept bullion buoyant at a USD $7 on shore premium relative to London pricing, however layered offers toward USD $1,340 restricted further top-side price action throughout the afternoon. The metal continues to see interest amid stronger global equities, while the correlation to dollar movements has firmed over recent months. Inflationary pressures out of the U.S. are likely to see bullion supported over the medium-term, however susceptibility remains to a test toward USD $1,305 - $1,310 over the short-term. Initial support for the metal holds around USD $1,325 - $1,330, while resistance cuts in broadly between USD $1,340 - $1,345.

All eyes today on Federal Reserve Chairman Jerome Powell's first semi-annual testimony before the House Finance Committee, while data out of the U.S. includes durable goods, wholesale inventories, house prices and 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 : Thursday 08 Mar 2018

MACRO: US equities were mixed in the first trading session following the resignation of Gary Cohn, the head of Trump's National Economic Council, on Tuesday night. Markets were hammered early, the Dow was down 350 points at one stage, but managed to pare some of the early losses. The Dow lost 82.76 points, or 0.33%, to 24,801.36, the S&P 500 edged lower 1.32 points, or 0.05% to 2,726.80, while the Nasdaq gained 24.64 points, or 0.33%, to 7,396.650. There were wins for tech (+0.55%) and REITs (+0.52%) while consumer staples (-0.93%) and energy (-0.83%) led the laggards. European shares were higher, the EuroSTOXX put on 1.34 points, or 0.36%, to 372.71, the German DAX rose 131.49 points, or 1.09%, to 12,245.36, and the London FTSE 100 put on 11.09 points, or 0.16%, to 7,157.84. In the currencies, the US dollar index was all but flat at 89.615, the EUR traded down to 1.2387, while USD/JPY was as high as 106.12. US treasury yields were mixed, the 2 year yield firmed 0.4 bps to 2.2539% and the 10 year yield eased 0.18 bps to 2.8845%. In commodities, oil markets were sharply lower as the EIA reported a second straight rise in US crude inventories, Brent sold off 2.05% to $64.44 while WTI gave up 2.17% to $61.24. Base metals were broadly lower, with aluminium (-2.33%) leading the losses. In US economic data, ADP reported that the private sector added 235k jobs in February following an upwardly revised 243k in January. The US trade deficit rose 5% to $56.6 billion in January from $53.9 billion in December, exports fell 1.3% while imports were unchanged. The deficit is close to a 10 year high and is 16% higher than January 2017, the month Trump took office. Productivity for the fourth quarter 2018 was revised upward from -0.1% to show no change, while unit labor costs were revised to show a 2.5% instead of 2% rise. The Federal Reserve's Beige Book reported growth at a moderate to modest pace in January and February, districts are reporting an increase in wages but so far no significant increase in prices. Consumer credit rose $13.9 billion to a seasonally adjusted $3.85 trillion in January, reporting an annual growth rate of 4.3%. In Asia today, as I write the Nikkei is at +0.45%, the Shanghai composite is at +0.25%, the Hang Seng at +1.44%, and the ASX S&P 200 is at +0.52%. Tonight we have household debt and weekly jobless claims out of the US; and the ECB interest rate decision out of the Eurozone.

PRECIOUS: Fairly disappointing session for the precious as gold fails to consolidate above $1330. Gold opened sharply higher at $1338 as USD/JPY plunged below 106, testing $1340 a couple of times during the morning. The Chinese were sellers with the SGE premium easing to $5-6 and the market drifted to $1331-32 by the time London came in. The metal looked fairly heavy through the London AM session and into NY trading and dropped to $1323 when the EUR dipped below 1.24. There was a brief bounce back to $1327 followed by a retreat to the days low of $1322. The yellow metal firmed a little late in the day to close at $1325. Silver opened at the days high around $16.80 and only travelled one way as the day progressed. The grey metal stalled around $16.68 through London AM before dropping to the $16.44 low in NY. The PGM's were also heavily sold, palladium printed a 4 week low of $964 while platinum tumbled to a 2 month low of $948. The Philadelphia gold and silver index lost 2.48%. The SPDR Gold Trust holdings fell 0.3% to 833.73 metric tonnes. In Asia today, gold has remained range-bound after an early dip. The SGE premium was slightly firmer at $8 over loco London, Chinese buying has helped support the market at $1327, the yellow metal is at $1327.30 as I write. Silver is flat, the grey metal sits at $16.51 as I write. In the PGMs, palladium is creeping higher, sitting around the highs at $975. Gold should find close support at $1316-18 with the psychological $1300 level below that. On the upside, first target will be the key resistance at $1340.

 

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

DAILY REPORT : Friday 02 Mar 2018

MARKETS/MACRO: U.S. equity indices sank Thursday led by heavy selling in industrial stocks after President Donald Trump said he would impose tariffs on steel and aluminium imports, raising concerns of protectionist trade policies that could impact U.S. corporations and consumers. The Dow Jones Industrial Average crumpled -420.22 points, or -1.68%, to 24,608.98, the S&P500 retreated -36.16 points, or -1.33%, to 2,677.67 and the NASDAQ Composite slumped -92.447 points, or -1.27%, to 7,180.562. European stocks were also lower, hit for a third straight session after a batch of lacklustre corporate earnings reports. The Euro First 300 Index plunged -18.73 points, or -1.26% to 1,468.47 and the Euro Stoxx 600 fell -4.77 points (-1.26%) to 374.86. Regionally the DAX was slammed -1.97%, FTSE100 -0.78% and CAC40 -1.09%. Crude oil prices were down sharply in early trading, with the stronger-than-expected inventory build yesterday still weighing on investors minds. However a reversal in the USD strength saw investor appetite improve late in the session, with crude oil prices recovering. Libya said oil output was holding steady as higher production from two its biggest oil fields was helping offset the impact of a shutdown at a deposit operated by Eni SpA. In the end April WTI crude closed down -$0.33 (-0.45%) at $61.34.

President Trump said on Thursday that he will impose stiff tariffs on imports of steel and aluminium, thwarting some of his top pro-trade advisers and rattling stock markets as a possible global trade fight loomed. Mr. Trump said he would formally sign the trade measures next week and promised they would be in effect “for a long period of time”. The measures would impose tariffs of 25% on steel and 10% on aluminium. At a White House meeting on Thursday, Mr. Trump told a group of executives that he did not want any nation to be exempted from the order, arguing that if one country was exempt, all other countries would be in line to ask for similar treatment. The trade action stems from a Commerce Department investigation that concluded imported metal threatens national security by degrading the American industrial base. “People have no idea how badly our country has been treated by other countries”, Trump said, “..They’ve destroyed the steel industry, they’ve destroyed the aluminium industry, and other industries... We’re bringing it all back”. The head of the American Petroleum Institute, Jack Gerard, however raised serious concerns with the Department of Commerce’s recommendations for tariffs saying, “Today’s announcement by the Department of Commerce to recommend sweeping tariffs around all steel and aluminium imports, in the guise of national security concerns, doesn’t make sense for the U.S. economy...These tariffs would undoubtedly raise costs for U.S. businesses that rely heavily on steel and aluminium for the majority of their products - and ultimately consumers".

Federal Reserve Chairman Jerome Powell said Thursday that there are no "decisive" signs of wage inflation yet. Speaking in testimony before the Senate Banking Committee, the central bank governor also said more gains can come in the labour market without causing harmful levels of inflation. The remarks are significant in that during Powell's speech two days ago before the House Financial Services Committee were interpreted as being more concerned about inflation, leading the Fed to a more aggressive path in interest rate hikes. "We don't see any strong evidence yet of a decisive move up in wages. We see wages by a couple of measures trending up a little bit, but most of them continuing to grow at 2.5%", he said. "Nothing is suggesting to me that wage inflation is at a point of accelerating. I would expect that some continued strengthening in the labour market can take place without causing inflation".

PRECIOUS: It was a volatile session for gold yesterday, edging slowly lower throughout Asia and Europe and then bouncing round like a yo-yo during the U.S session. The metal opened with a fairly muted tone in Asia on Thursday before steadily edging it's way lower toward $1315, where it spent the vast majority of the Asia day. The SGE premium remained well bid ($8-9) and modest buying from onshore Chinese participants and banks was persistent. It failed to lift the spot price however, with COMEX offers still fairly voluminous and specs seemingly hunting for down-side stops. The spot gold dipped to $1310-12 later in Europe and did a little work around there on decent sized volumes. On the NY open, the metal was swiftly sold off to a fresh yearly low of around $1305 but just as quickly surged back to $1311. We chopped back and forth a number of times between the low ($1303.40) and $1312 and it was only when President Trump announced his intention to bring in the commodities tariffs that the gold shot higher - in line with a firmer USD and weak equities. Starting from $1305 the metal pushed as high as $1320.80 bid late in the day, encountering a little profit taking around $1320 and then closed at $1317 - ~$1.00 lower on the day. Technically speaking, the impulsive rejection of the 100 dma and critical $1300 level bodes well for the gold in the short term. It will no doubt boost support around that level, with bulls who missed the move happy to sit on the bid there. Resistance sits between $1321-26 (last night high and 50 dma). Palladium was the real big mover overnight cratering from $1045 to as low as $980, and clearing out a number of weak longs. Unlike the other metals in the complex, palladium failed to recover to the same levels as gold, silver and platinum, closing around $992 (-5.0% on the day).

With the gold opening more-or-less where it did yesterday, it was a fairly muted first few hours with traders happy to wait and see how China would react to the overnight developments. The SGE opened and spot gold fell a couple of dollars toward $1315, yet similar to yesterday there were small bids there. The premium on the SGE had rolled back a little to $7-8, which had slowed the buying a little from what we had seen compared to the past week. All in all though it was an exceptionally quiet end to the week remaining in a $2 range for most of the session so far. In other markets, Asian equities are lower at time of writing (Nikkei -2.9%, Hang Seng -1.4%, Shanghai Composite -0.25% and ASX200 -1.05%), the USD is a touch softer across the board and crude is down -$0.37 at $60.97.

 

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 Feb 2018

MACRO: Equity markets in the U.S. finished the week on a positive note, benefitting from further declines to U.S. treasury yields to climb into positive territory over the week. The DJIA added +1.39% to 25,309.99 points, while the S&P 500 saw strength across Energy (+2.20%) and technology (2.17%) as all sectors finished in the black to support the bourse +1.60% higher to 2,747.30 points. The Nasdaq meanwhile snapped a four-session run of declines to bounce +1.77%. Over the week the DJIA added +0.4%, the S&P 500 gained +0.6% and the Nasdaq jumped +1.4%. The greenback saw mixed trade on Friday, ending modestly higher as the DXY pared early European gains in New York. The dollar regained the 107.00 handle against the yen amid whippy price action, while making notable gains against the euro to see the pair slip below 1.23 late in trade as the DXY booked a +0.1% gain. Oil futures turned bid in New York following tepid Asian/European trade on Friday, seeing WTI +1.5% higher to USD $63.60 per barrel, while Brent crude withstood early European offers to end +1.6% higher at USD $67.30 per barrel.

PRECIOUS: Asian trade on Monday saw Chinese interest return to the market follow their 'soft' opening late last week, with the Far East piling into bullion underneath USD $1,330 following the recent New Year holiday. With the yellow metal trading around USD $25 lower than it was when Shanghai closed for the Lunar New Year holiday, participants wasted no time bidding up the metal through mild resistance at USD $1,330, with interest extending as far as USD $1,338 into the Chinese lunch break. Physical demand piggybacked a softer greenback as USD/China took a leg lower to underpin bullion price action, with late Asian trade pushing through USD $1,340 to see the yellow metal trade +0.9% higher into European hours. Over the near-term bullion is likely to see a tug-of-war between a (historically) generally weaker Q2 (in addition to further downwards pressure from the Fed) vs. inflation pressures and potential further gains to U.S. treasury yields. We still expect the metal to remain range-bound with a test toward USD $1,305 - $1,310 not out of the question, while top-side targets sit toward USD $1,345 and $1,350. Silver ripped through the USD $16.50 pivot point to outperform and add +1.5% during Asian trade today, while platinum importantly reclaimed the USD $1,000 handle and palladium made light work of USD $1,050.

 

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

DAILY REPORT : Wed 07 Mar 2018

MACRO: In the US, Gary Cohn has resigned as White House chief economic advisor, the decision comes after Cohn clashed with President Trump over the issue of proposed tariffs in the steel and aluminium industries. Earlier in the day, the Mexican peso and Canadian dollar rallied as Treasury Secretary Steve Mnuchin said that the tariffs may not apply to Mexico and Canada provided the renegotiation of NAFTA is successful. US equities endured a turbulent session as investors consider the potential impact a trade war would have on the stock market. The Dow edged higher 9.36 points, or 0.04%, to 24,884.12 but was down over 150 points at one stage during the session; the S&P 500 added 7.18 points, or 0.26% to 2,728.12, while the Nasdaq gained 41.302 points, or 0.56%, to 7,372.007. There were wins for materials (+1.09) and consumer discretionary (+0.72%) while utilities (-1.36%) led the laggards. European shares were higher, the EuroSTOXX put on 0.5 points, or 0.13%, to 371.37, the German DAX advanced 23 points, or 0.19%, to 12,090.87, and the London FTSE 100 rose 30.77 points, or 0.43%, to 7,146.75. In the currencies, the US dollar came under pressure as amid the tariffs debate. The US dollar index slipped 0.50% to 89.634, the EUR traded up to 1.2419, while USD/JPY traded down to 105.83. US treasury yields were mixed, the 2 year yield firmed 0.4 bps to 2.2481% and the 10 year yield eased 0.91 bps to 2.8717%, In commodities, oil markets were mixed as Brent added 0.24% to $65.70 and WTI gave up 0.11% to $62.50. Base metals were broadly higher on the dollar weakness, with nickel (+1.86%) leading the gains. In US economic data, factory goods orders fell 1.4% in January following a 1.8% rise in December, orders for capital goods excluding aircraft fell 0.3% in January. In Asia today, as I write the Nikkei is at -0.11%, the Shanghai composite is at +0.34%, the Hang Seng at +0.02%, and the ASX S&P 200 is at -0.88%. Tonight we have ADP employment, trade deficit, productivity, unit labor costs, the beige book, and consumer credit out of the US; and GPD growth rate out of the Eurozone.

PRECIOUS: A strong session for the precious complex overnight as the greenback came under pressure amid further trade war speculation. Gold opened at $1319 in Asia and traded up to $1324 with the SGE premium constant at $8. London were on the bid from the opening bell as first the sterling and then the euro were bought heavily against USD. Gold had firmed to $1328 by the time NY came in and they were happy to buy into the strength. The yellow metal ran into resting orders ahead of $1340, printing the days high of $1338 before settling to $1334 at the close. In a similar session, silver traded sideways through Asian hours before surging over 40c to a March high $16.86. Palladium was the lone disappointment, finishing flat after a whippy session. The Philadelphia gold and silver index added 2.15%. In Asia today, gold opened $4 higher at $1338.80 as USD/JPY plunged below 106. The market tested the $1340 level a couple of times during the morning but has drifted lower on Chinese selling with the SGE premium easing to $5-6. The yellow metal sits at $1335.10 as I write. Silver opened higher but has been on a downward trajectory ever since, the grey metal is at 16.70 as I write. PGMs are flat. Gold is sitting just ahead of the near support at $1333 and we would expect to see buying interest below that at $1320-25. Resistance remains at $1340 and the $1350 level above that.

 

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

DAILY REPORT : Thursday 01 Mar 2018

MARKETS/MACRO: Markets settled somewhat overnight following the hawkish tilt implied in new Fed chair Powell's Congressional testimony on Tuesday. The USD remained steady, yet still traded with a firm tone, the major outlier the Cable which dropped some -150 pips on the day against the USD. U.S. stocks slid Wednesday amidst data that was seen to somewhat underpin strength in the economy that might warrant the Federal Reserve to turn more hawkish and increase corporate borrowing costs. The Dow Jones Industrial Average retreated -380.83 points, or -1.50%, to 25,029.20, the S&P500 sold off -30.45 points, or -1.11%, to 2,713.83 and the NASDAQ Composite gave up -57.346 points, or -0.78%, to 7,273.009. Across the Atlantic, European equity markets followed Asia lower as investors are beginning to price in the probability that the Fed may ramp up the pace of rate hikes. The Euro First 300 index declined -10.86 points (-0.72%) to 1,487.20 and the Euro Stoxx 600 dropped a similar -2.76 points (-0.71%) to 379.63. Crude oil prices fell after data showed another strong increase in oil inventories in the U.S (WTI -$1.29, -2.1% to $61.55). EIA’s weekly report revealed that US stockpiles rose by 3.02 million barrels, higher than the market had been expecting. This was compounded by reports that OPEC production had risen in February, JBC Energy estimating that the groups output had increased by 130kb/d to 32.4mb/d. This was driven by a incline in Libyan, Nigerian and Venezuelan production. Treasuries traded higher and the curve flatter overnight with what seemed better selling of the front end against buying further out from real money accounts. The U.S 10y yields decreased -2.37bps to 2.8697% and the U.S 2y yield fell -0.2bps to 2.2580%

The data pulse was mixed overnight and market reaction was minimal. The second estimate of Q4 US GDP eased slightly to 2.5% QoQ (2.5% expected, 2.6% prior). The composition of the revision was more favourable however, as personal consumption growth was unrevised at a solid 3.8% pace, and the modest downward revisions to inventory investment suggest a slightly larger contribution to Q1 growth. The Atlanta Fed GDPNow model is pointing to 2.6% QoQ annualised in Q1. Looking beyond, investment should remain firm and consumption solid amid tax reform/cuts. Elsewhere, U.S pending home sales and Chicago PMI both disappointed. In Europe, core inflation (+1.0% YoY) remains benign despite decent economic growth. This likely leaves the ECB policy debate on forward guidance, rather than any direct policy action in coming months. Lastly German unemployment remained steady, with the trend in strong job growth continuing (+631k in the last 12 months).

PRECIOUS: It was an uneventful, range-bound session for gold yesterday, covering a $6 range throughout. Good support was seen from onshore China during the Asia session, as the SGE premium traded to a post Chinese New Year highs of ~$9 over the loco London price. Despite the moderate Chinese demand spot gold remained fairly subdued carving out a quiet $2 range during the Asia afternoon between $1316.50-1318.50. London and NY traders welcomed the overnight breather, with the stable USD providing little direction for the metals. The New York open saw a quick sweep lower, but from there quickly traded up to the days highs with some specs happy to cash in on the weeks move lower. At the close the metal was unchanged at around $1318. Gold vols were a bit lower into the close with light selling interest on the front end of the curve. 1m 9.6%, 3m 10.15%, 6m 11.1% 1yr 12.15%. Gold sits right on a support line dating back to early Feb ($1314-15) and a break of that could see a quick test down to the 100 dma ($1300.30). On the topside we believe COMEX supply above $1325 (spot equivalent) will be plentiful. Platinum remains soft after the German courts earlier in the week ruled that individual cities have the right to ban diesel cars – this would affect ~10m vehicle owners in Germany and have a knock on effect across Europe.

Again it was a calm range-bound session through Asia. The gold opened up around $1318 and after a brief push above $1320 in the opening minutes cooled and traded lower into the China open. There was modest demand from onshore Chinese sources and the premium of the SGE was again fairly lofty at around $8-9 over the spot price. Despite the modest demand, spot gold flatlined throughout the proceeding hours pinned between $1315-1316 with only very light volume going through Globex. In other markets equities in Asia are generally lower (Nikkei -1.6%, ASX200 -0.9%, Hang Seng -0.1%), the Shanghai Composite is currently bucking the trend however, up +0.4% at time of writing on the back of a firmer than expected Caixin Manufacturing PMI (51.6 vs 1.3 expected). The USD remains flat, the only real mover the AUDUSD which is currently off 30 pips at 0.7732 and crude is up around +$0.20 at $61.73. Looking ahead, all eyes will be on Fed Chair Jerome Powell who will appear before the Senate Banking Committee for a second day of testimony. Also look out for U.S personal income and spending data, jobless claims and ISM Manufacturing. There are also a host of European and U.S Markit manufacturing PMI's to be released.

 

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 Feb 2018

MACRO: US equities finished higher despite erasing some of the early gains. The Dow added 164.7 points, or 0.66%, to 24,962.48; the S&P 500 gained 2.63 points, or 0.10% to 2,73.96, while the Nasdaq lost 8.14 points, or 0.11%, to 7,210.09. There were wins for REITs (+1.14%) and energy (+1.08%), while financials (-0.78%) led the laggards. European shares were lower, the EuroSTOXX shed 0.76 points, or 0.20%, to 380.34, the German DAX slipped 8.58 points, or 0.07%, to 12,461.91, and the London FTSE 100 fell 29.18 points, or 0.40%, to 7,252.39. In the currencies, the US dollar index eased 0.30% to 89.72 after a week long rally the EUR surged to 1.2343 while USD/JPY was sold through 107 to trade as low as 106.61. US treasury yields were lower, the 2 year yield fell 1.61 bps to 2.2500% and the 10 year yield lost 3.3 bps to 2.9170%, In commodities news, oil markets rallied as US crude stocks fell unexpectedly, Brent advanced 1.24% to $66.23 while WTI firmed 1.49% to $62.60. Base metals were mostly lower with aluminium (-0.73%) taking the biggest hit, however copper bucked the trend and rose 0.60%. In US economic data, the Conference Board's leading economic index surged 1% in January, it's fourth straight monthly gain and the largest in three months. The main drivers were building permits and the financial sub-components, with 8 out of 10 indicators showing positive readings for the month. Initial jobless claims fell by 7k to 222k in the week ending February 17th, the reading was well below economists 230k forecast. Continuing claims fell by 73k to 1.88M. In Asia today, as I write the Nikkei is at +0.36%, the Shanghai composite is at +0.09%, the Hang Seng at +0.66%, and the ASX S&P 200 is at +0.83%. Tonight we have the Feds monetary report to Congress in the US; and inflation data from the Eurozone.

PRECIOUS: Better session for the precious as gold snaps a 4 day losing streak. Gold opened at $1324 in Asia and traded up to $1326 before the Chinese open. On the first day of trading following the Chinese New Year holidays, the SGE premium was around $4-5 and we saw relatively light buying out of China, the market drifting to the days low of $1320 late in the day. A mild bid tone through the London AM session led into a strong NY open as the greenback fell further out of favour. Gold made a push higher as USD/JPY traded below 107 and the EUR surged through 1.23. The yellow metal hit resistance at $1330 in the form of resting COMEX orders before making another more successful move through the level later in the day. Gold closed a touch off the session high at $1331. Silver tested the overnight lows around $16.40 but found support in NY to print a high of $16.67. Palladium was the pick of the PGMs, the metal added $20 to the opening level to a high of $1040. The Philadelphia gold and silver index lost 0.61% to 80.02. In todays trading, gold opened at $1331.20 and has drifted lower through the day as the US dollar is firming. The SGE premium is slightly higher today at around $6 but buying is still fairly light. The yellow metal reached a low of $1326.50 and is at $1327.50 as I write. Silver is drifting lower also, the grey metal sitting just off the low at 16.56 as I write. PGMs are flat. Gold should find support where the 50 DMA meets the overnight low at $1319-20, and the Feb low of $1308 below that. On the upside, broad resistance between $1331-35 will be followed by the $1350 psychological 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 : Tuesday 06 Mar 2018

MACRO: US equities rallied as fears of a global trade war receded. The Dow rose 336.70 points, or 1.37%, to 24,410.03; the S&P 500 added 29.69 points, or 1.10% to 2,720.294, while the Nasdaq gained 72.84 points, or 1.00%, to 7,330.70. Utilities (+1.95%) and financials (+1.37%) led a broad advance in the markets. European shares were higher, the EuroSTOXX put on 3.83 points, or 1.04%, to 370.87, the German DAX advanced 177.16 points, or 1.49%, to 12,090.87, and the London FTSE 100 rose 46.08 points, or 0.65%, to 7,115.98. In the currencies, the US dollar index firmed 0.16% to 90.075, the EUR was as low as 1.2276, while USD/JPY traded up to 106.23. US treasury yields were mixed, the 2 year yield lost 0.2 bps to 2.2398% and the 10 year yield rose 2.2 bps to 2.8863%, In commodities news, oil markets were higher following a reported fall in US crude stocks, Brent added 1.90% to $65.5 while WTI gained 2.27% to $62.64. Base metals were mostly lower, with zinc (-1.76%) the big mover. In US economic data, the ISM non-manufacturing index eased 0.4 points to 59.5 in February from a 55.9 reading in January. The services sector measure fell 6.6 points to 55 while the new orders reading rose 2.1 points. The IHS Markit services PMI rose to 55.9 in February from 53.3 in January, while the composite output index rose to 55.8 from 53.8. In Asia today, as I write the Nikkei is at +2.12%, the Shanghai composite is at +0.07%, the Hang Seng at +1.22%, and the ASX S&P 200 is at +1.22%. Tonight we have factory orders out of the US; retail PMI fro the Eurozone; and construction PMI from Germany.

PRECIOUS: A subdued session for the precious as gold remains range-bound. Gold opened at $1323 and crept up to $1326 as the $8 SGE premium prompted light buying out of China. We saw the days high of $1327 just after the opening bell in London, but it was all downhill from here. US equities shrugged off trade war concerns and made a push higher on the positive economic data, while the yellow metal gave up the gains in Asia to print the $1317 low. A modest bounce into the close saw gold finish the session at $1320. Silver reached a high of $16.59 in during Asian hours before sinking to the overnight low at $16.36. Palladium looked like testing the $1000 level early on before being sold to Friday's low at $978. The Philadelphia gold and silver index added 0.44%. In todays trading, a mild bid tone in the gold market as we see some buying action from China with the SGE premium at $8 over loco London. Todays high was $1322.80 and the yellow metal is at $1322.10 as I write. Silver has been range-bound during Asian hours, the grey metal sits at $16.43 as I write. PGM's are creeping higher, platinum and palladium are at $962 and $986 respectively. We are expecting gold should find support at $1316-17 and the all important $1300 level (which coincides with the 100 DMA) below that. On the upside, initial resistance at the week-high $1327 printed last night followed by broad resistance between $1335-40.

 

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 Feb 2018

MACRO: Federal Reserve Chairman Jerome Powell made his first address to Congress since taking over the role earlier this month. Powell said he is optimistic about the economy, and that "further gradual increases in the federal-funds rate " will allow the Fed to meet it's goals. US equities finished lower following the Powell testimony as the hawkish comments spooked investors that were already concerned about the effect of further rate hikes on the markets. The Dow lost 299.24 points, or 1.16%, to 25,410.03; the S&P 500 fell 35.32 points, or 1.27% to 2,744.28, while the Nasdaq sold off 91.11 points, or 1.23%, to 7,330.35. There were no winners in the stock markets today as REIT's (-2.15%), consumer discretionary (-2.12%) and telecoms (-1.84%) led a broad sell-off. European shares were lower, the EuroSTOXX shed 0.76 points, or 0.20%, to 380.34, the German DAX slipped 8.58 points, or 0.07%, to 12,461.91, and the London FTSE 100 fell 29.18 points, or 0.40%, to 7,252.39. European shares were also lower, the EuroSTOXX shed 0.70 points, or 0.18%, to 382.36, the German DAX slipped 36.31 points, or 0.29%, to 12,490.73, and the London FTSE 100 fell 7.13 points, or 0.10%, to 7,282.45.In the currencies, the greenback found broad support on the back of the new Fed Chair's testimony, the US dollar index climbed 0.56% to 90.352. The EUR traded down to 1.2226, while USD/JPY rose as high as 107.56. US treasury yields were higher, the 2 year yield firmed 4.02 bps to 2.2621% and the 10 year yield rose 3.66 bps to 2.8989%, In commodities news, oil markets were lower on the USD strength, Brent fell 1.53% to $66.47 and WTI slashed 1.60% to $62.89. Base metals were mostly lower, with copper (-1.25%) the big mover. In US economic data, durable goods orders dropped 3.7% in January, the decline was well in excess of economists 1.7% expectation. Core capital goods orders fell 0.2% in January following a 0.6% drop in December. The Conference Board's consumer confidence index rose to 130.8 in February from 124.3 in January, the highest reading since November 2000. The S&P/Case-Shiller national home price index rose a seasonally adjusted 0.7% in the December quarter and was up 6.4% compared to a year before. In Asia today, as I write the Nikkei is at -0.36%, the Shanghai composite is at -1.15%, the Hang Seng at -1.49%, and the ASX S&P 200 is at -0.56%. Tonight we have GDP, Chicago PMI and pending home sales out of the US; inflation data out of the Eurozone; and consumer confidence and unemployment numbers out of Germany.

PRECIOUS: A rough session for the precious as markets take a hit on broad strength in the greenback. Gold opened at $1332 in Asia and traded up to what would be the days high of $1336 as Chinese markets opened. The SGE premium started around $9 which prompted strong buying action out of China, which only served to support the market around the opening levels as weakness crept in. The metal was range-bound between $1332-35 through he London AM. NY were on the offer from the opening bell, gold was quickly dumped to $1325 on the broad strength of the dollar before bouncing back to $1330. By the time Fed Chair Powell began his testimony the yellow metal was back at $1325, it was clear investors had interpreted his comments as hawkish as the USD rally gained velocity and gold plunged to the days low of $1313. The yellow metal firmed a little through the afternoon and closed the session at $1318. Silver sold off nearly 2% to a 2 week low of $16.34. PGMs were hammered also, platinum and palladium shed $16 and $29 respectively. The Philadelphia gold and silver index dropped 2.82%. The SPDR Gold Trust holdings were unchanged at 831.03 metric tonnes. In todays trading, gold has been range-bound through Asian hours, the $10 SGE premium failing to spark much buying out of China. The yellow metal is at $1317.70 as I write. Silver has drifted slowly lower since the open and is trading around last nights low, the grey metal sits at $16.37 as I write. Palladium has seen the biggest move today, grinding higher off the open to print a high of $1047. Expect gold to find first resistance at the post-CPI release low of $1321 and the $1330 level above that. We should see support at the Feb lows around $1307-10 and at the key $1300 level after that, a break below here could be the catalyst for a significant sell off.

 

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.

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DAILY REPORT : Thursday 22 Feb 2018

MARKETS/MACRO: U.S. equities rose to near session highs on Wednesday after the Federal Reserve’s policy-setting committee released minutes from its January meeting, with investors finding few reasons to believe that the central bank would quell the buying mood on Wall Street. The Dow Jones Industrial Average gained +31.64 points, or +0.13%, to 24,996.39, the S&P500 rallied +12.16 points, or +0.45%, to 2,728.42 and the NASDAQ Composite added +35.188 points, or +0.49%, to 7,269.496 points. Industrials (+0.59%) were the best performer, while REITs (-1.59%) fared the worst. European markets were mixed as investors received disappointing updates on manufacturing and services activity in the Euro Zone. The Euro First 300 Index rose +1.69 points, or +0.11% to 1,491.58 and the Euro Stoxx 600 inclined +0.59 of a point, or +0.16% to 381.10. Regionally the FTSE100 gained +0.48%, the CAC40 was up +0.23%, while the DAX shed -0.14%. Crude oil was weaker (WTI -$0.61 to $61.18) on concerns over higher inventories, along with record U.S output. U.S inventories are expected to have risen some 29 million barrels over the past week, which if confirmed would be the fourth consecutive gain. In FX, the USD gained further ground post FOMC minutes with the DXY index rising +0.3% to 90.00. EURUSD eased for the second consecutive day to 1.2284 and the USDJPY rose +0.4% to 107.78. In rates the U.S 10y yield increased +5.12bps to 2.941% and the U.S 2y yield rose +5.14bps to 2.270%.

The minutes from the January FOMC meeting indicated further improvement in the growth outlook and slightly more hawkish views on inflation. The minutes also supported a hawkish interpretation of the word “further” in the January statement, noting that stronger growth would increase the odds of an upward trajectory in the funds rate. However, the characterisation of wage growth was surprisingly dovish. The minutes again briefly mentioned the possibility of potential alternative monetary policy frameworks, such as an inflation target range or some form of price-level target. Officials concluded that "upside risks" to economic growth had increased thanks to tax cuts, increased consumer spending and confidence and a general plethora of signs that growth was moving along at a sustained pace. "Almost all participants" saw inflation moving up to the Fed's 2% inflation goal over the "medium term" as growth remained above trend and the labour market "stayed strong".

Euro-area February composite PMI slipped a touch to 57.5, but is still at healthy levels, with Manufacturing and services data from France falling short of expectations and German manufacturing activity hitting a six-month low. The drop was led by new orders and a reduction in the backlog of work. Whilst moderating from January's record, the index still points to solid and above trend growth. In the U.S the National Association of Realtors noted that existing home sales dropped -3.2% to a seasonally adjusted annual rate of 5.38 million units (5.60 million units expected) last month. December’s sales pace was also revised down to 5.56 million units from the previously reported 5.57 million units. Still in the U.S, Markit's flash manufacturing PMI rose to 55.9 (55.5 expected) from 55.5 and the services barometer climbed to 55.9 (53.7 expected) from 53.3. Chris Williamson, chief business economist at Markit mentioned that even faster growth is signalled for the coming months.

PRECIOUS: Gold traded lower overnight, with significant volatility displayed around the release of the FOMC minutes, the metal initially pushing to the days highs only to be thrashed lower as the USD climbed. Gold opened in Asia Wednesday in what was again quiet trade with China out enjoying the final day of the Lunar New Year holiday. Gold was heavy throughout much of the Asia session, with the USDJPY steadily recouping recent losses and trading up to 107.90. The yellow metal traded through the overnight low around midday triggering some light stops through ($1328.50) but the metal did find some support ahead of $1325 and held there. During London and most of New York the metal traded quite comfortably either side of $1330, with medium sized flows seen via Comex. As soon as the minutes were released however, gold gapped higher from $1330 to the days high of $1335.95, in line with a firmer EURUSD (1.2360) and softer USDJPY (107.30). The run higher however was momentary, stalling around $1335 and then plunging more than $10 through the previous daily low to $1322.50. Some Asian names were on the bid beneath $1325 and steadied the ship, the metal ultimately closing around $1324.50. Vols were soft most of yesterday, but firmed up a bit on the close with equities culling their gains. 1m atm vol 11.3%, 3m 11.8%, 6m 12.25%, 1yr 12.85%. Gold yields also continue to soften fairly relentlessly from investor desire for USD's. Gold is precariously holding a trend-line from December 2017 lows at present, so we expect some support around here, especially with China back. A break of this $1322-25 area however, could see gold test down to the 50 day MA of 1319.25 then the 100 day MA of 1298.50 if USD strength persists.

Given that spot gold is trading around $10 lower from where they last saw it, there was some anticipation today as to what Chinese traders would be looking to do on their first day back - the answer, not a great deal. Spot gold opened and there was some light spec demand and profit taking which angled gold a few dollars higher prior to the SGE open. As soon as Shanghai opened though spot gold quickly tumbled back through the opening levels to $1323.50. Some light demand emerged around this level with the SGE premium holding fairly close to where it was a week ago ($4.50-5.50). The metal remained fairly subdued as we moved into the afternoon, confined to a $2 range either side of $1324.50. In other markets, equities were mixed with the Nikkei currently -1.3% and Hang Seng -1.1%, while the Shanghai Composite is up +1.95% and ASX200 +0.1%. WTI crude is currently a little softer down -$0.30 on the day at $61.06. Ahead today on the data calendar look out for German IFO, UK GDP and U.S jobless claims.

 

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