DAILY REPORT : Monday 09 July 2018

MACRO: Relations between the U.S. and North Korea look to have taken a hit over the weekend, with North Korean officials labelling U.S. Secretary of State Mike Pompeo's negotiation tactics as 'gangster-like' following two days of talks in Pyongyang. Pompeo said in Tokyo on Sunday after meeting with Japanese and South Korean counterparts that although there is still a lot of work to do, he is confident North Korea would stick to it's commitment to abandon their nuclear program.

June jobs data out of the U.S. showed the economy continued to strengthen, adding a further 213k payrolls (exp: 195k) to follow an upwardly revised 244k in May (prev: 223k), while April also saw an upwards revision to 175k (prev: 159k). The unemployment rate meanwhile inched up to 4.0% (exp: 3.8%) from 3.8% previously as the participation rate increased to 62.9% (exp: 62.7%) from 62.7% previously. The broader 'U-6' measure of unemployment and underemployment, which includes those who have stopped looking and those in part-time jobs who want full-time positions increased to 7.8% from 7.6% previously. Average hourly earnings added +0.2% MoM (exp: +0.3%) to hold at +2.7% YoY, while average hours worked per week held at 34.5. Equities in the U.S. booked solid gains on Friday following the robust jobs figures, with participants casting aside global trade concerns for now. The DJIA ended the session +0.41% higher at 24,456.48 points, seeing the bourse +0.8% higher for the week. The S&P 500 rallied +0.85% to 2,759.82 points as all 11 components finished in positive territory, helping the bourse to a +1.5% weekly gain. The Nadaq outpaced to end the session +1.34% higher at 7,688.39 points, a +2.4% return on the week. The greenback tracked lower on Friday as participants considered the jobs data in conjunction with the recent FOMC minutes release and continued global trade concerns. The DXY index ended the session off -0.45%, notably declining against the euro (EUR/USD +0.4%) and the yen (USD/JPY -0.2%).

PRECIOUS: An attempted outside session by bullion on Monday, as the greenback continued its recent decline and participants considered the weekend North Korean news. Gold found footing around USD $1,255 in early session flows, edging modestly higher leading into the Chinese open, however further gains were somewhat stifled by a softer pound following the resignation of Brexit Secretary David Davis and deputy Steve Baker. A further extension to the recent USD/China weakness in Shanghai underpinned a test toward the resistance level of USD $1,260, even as the SGE premium continued to hold around USD $3 - $4 relative to London prices. The metal held underneath USD $1,260 throughout the pre-lunch Chinese session as offers capped any further top-side moves, while the euro and the aud pushed higher to add further weight to the dollar decline. Afternoon flows saw gold extend through USD $1,260, however gains were tempered by a firming greenback to see the metal oscillating either side of the key level into London hours. A sustained break of USD $1,260 will bring in further interest and should open up a leg toward $1,280, however if the metal is unable to capture the figure we will once again see bullion with the USD $1,250 - $1,260 range. Platinum was the major mover during Asian trade today, taking out the recent resistance level around USD $847 to add +1.4% on the session.

 

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 03 July 2018

MACRO: U.S. equity markets reversed early declines amid lighter than usual volumes on Monday, largely supported by a bounce in technology stocks. The DJIA added +0.15% to 24,307.18 points, while the S&P 500 gained +0.31% to 2,726.71 points as gains to technology stocks (+0.99%) helped to overcome weakness across energy (-1.55%). The Nasdaq Composite jumped +0.76% to 7,567.687 points, buoyed by gains to large-cap tech companies such as Micron Technology (+3.89%) and Nvidia Corp (+2.25%). The June U.S. ISM manufacturing PMI ripped higher to 60.2 (exp: 58.5) from 58.7 previously, with gains led by supplier deliveries and production indices. IHS Markit reported U.S. manufacturing growth in the U.S. remained strong during June, however expanded at a slower rate than seen in May. The manufacturing PMI was revised upwards to 55.4 (exp: 54.6) from a flash read of 54.6, down from 56.4 in May as new orders increased at the softest rate since November 2017. The Commerce Department reported construction spending in the U.S. increased +0.4% during May (exp: +0.5%) from a downwardly revised +0.9% increase in April (prev: +1.8%). The greenback strengthened further on Monday to see the DXY end +0.27% higher, notably higher against the Mexican peso follow the weekend election results.

PRECIOUS: Gold continued to extend recent dollar driven weakness in Asia on Tuesday, unable to hold support around USD $1,240 and breaking through the New York low print. Once again USD/China weighed upon bullion, with notably USD/CNH surging +0.7% higher in early Shanghai trade to drag gold lower. A brief stop loss run through the previous session low saw the metal test a break under USD $1,238, edging ever closer to the December 2017 low of USD $1,236. An afternoon relief rally courtesy of a reversal to USD/China and USD/JPY back above 111.00 saw gold regain USD $1,240, however it's difficult to say for how long. Gold ETF outflows continue to create headwinds for the metal, seeing a further 300,000 ounces wiped away from holdings overnight, while the dollar rally so far shows no sign of abating. The key for the metal is undoubtedly support at USD $1,236, while resistance cuts in through USD $1,245 - $1,250. Following Monday's collapse of nearly -4%, platinum continued to see volatile price action during Asian trade today. The white metal drifted lower throughout today's Asian session, with declines accelerating through USD $810 to see the metal briefly test support at USD $800. The afternoon dollar reversal provided some respite for the metal, tracking back above USD $810 into London hours. Data releases today include Eurozone PPI, Eurozone retail sales, U.S. factory orders and U.S. durable goods/capital goods.

 

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

DAILY REPORT : Wed 27 June 2018

MARKETS/MACRO: Despite trade tension continuing to simmer yesterday, risk sentiment in general managed to improve. U.S. stocks closed slightly higher as energy shares rebounded from steep losses in the previous session. The Dow Jones Industrial Average tacked on +30.31 points (+0.12%) to 24,283.11, the S&P500 advanced +5.99 points (+0.22%) to 2,723.06 and the NASDAQ Composite closed up +29.26 points (+0.39%) at 7,561.627. Energy stocks were the leading sector intra-day (+1.40%), while the worst performing sector was Consumer Staples (-0.45%). European equities managed to stabilise after selling off the past few sessions on trade war concerns. The EuroFirst 300 index edged up +1.29 points (+0.09%) to 1,474.48 and the EuroStoxx 600 was fairly flat up +0.08 of a point (+0.02%) to 377.25. Crude oil prices surged yesterday on reports that the U.S was pressuring allies to halt purchases of Iranian oil, WTI rallying +$2.60 (+3.8%) to $70.68 - the highest level in a month. After the U.S pulled out of the Iran nuclear deal, there had been much speculation as to whether this would actually mean less Iranian oil hitting the market. However, the U.S is now putting political pressure on consumers to end purchases, while also warning that it doesn’t want to offer any extensions or waivers to any sanctions. This comes at a time when other supply disruptions are emerging. Uncertainty about Libya intensified after a militia leader handed over control of certain ports to a rival of the state oil company. Yesterday’s news about operations at Syncryde, Canada’s oil sands complex in Alberta, is also weighing on the market. This has seen the Brent premium to WTI shrink from ~USD 10.00/bbl last week to only ~USD 6.00/bbl currently. In FX, much attention continues to be focused on $China which continues to push towards the key 6.60 handle (both CNH and CNY pushing through this morning). Both pairs have already rallied more than 20 big figures just in the last few weeks and look set to continue. According to Commerzbank they are starting to see equity funds put on forward hedges against further RMB weakness while recent inbound equity inflows look increasingly at risk of turning negative. Elsewhere, the U.S 10y yield decreased -0.37bps to 2.876% and the 2y yield fell -0.42bps to 2.529%.

The back and forth between the U.S and other trading partners continued overnight. President Trump took to Twitter taking aim at one of the country’s beacons of American manufacturing, Harley-Davidson. This quote sums it up: "A Harley-Davidson should never be built in another country-never! Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!". While it certainly plays to those in the U.S manufacturing sector, rural communities dependent on agriculture are starting to hurt with a number of soft commodity prices tumbling, especially those where there is an existing oversupply situation. The escalating situation has prompted more than 60 companies and organisations representing American dairy farmers and processors to urge the administration to reconsider its imposition of new tariffs on Mexico, as it is their largest and most reliable export market. In retaliation for US actions on steel and aluminium imports, Mexico recently added new tariffs – some of which will reach as high as 25% next month – on some American-made edible goods, amongst other products. Time will tell of the outcome, but such shifting alliances will be important for dairy and other commodity markets. China also mentioned yesterday it will remove import tariffs on animal feed ingredients including soybeans, soymeal and rapeseed from five Asian countries, a sign Beijing is seeking alternative supplies of the commodities as opposed to the U.S. China will drop tariffs on soybeans, soymeal, soybean cake, rapeseed and fishmeal originating from Bangladesh, India, Laos, South Korea and Sri Lanka from July 1. Even though the government had planned the tariff cuts since March, the cuts indicate that China is taking steps to reduce its dependence on U.S. agricultural products amid the mounting trade dispute between the two countries. Soybeans are China's biggest agricultural import from the United States by value.

PRECIOUS: Gold extended its leg lower yesterday on the back of a rising USD and continued tech selling following last weeks 'death cross' on the daily chart. The yellow metal opened in Asia yesterday and remained fairly flat, rallying in fact to the daily highs just after the Shanghai open. The stronger USDCNH and USDCNY dented the premium on the SGE some $4 however, which drew out some sizeable selling clips from Chinese names. The move lower for spot gold during Asia was fairly steady, falling to $1263 and then hovering around that level up until European traders walked in. The buying in the dollar remained robust, and gold which has shown good negative correlation to the USD was sold off further. Initially it was swept lower to $1258 and then back up to $1260. Decent liquidation was seen on the bounce however and the metal continued onto the lows of the day ($1255.20) as NY opened for trade. The leaping broader commodities base (particularly crude and base metals), allowed some respite in the sell-off, gold managing to scramble back toward $1262. It did not last though, with hedge funds and leveraged supply taking us back to $1257 and eventually closing around $1258.50. Next support sits around $1245-50 area and we see resistance at around $1270-75 in the short term. What is of slight concern is that last time we saw a 'death cross' on a daily chart for gold (Nov 2016), the metal subsequently dropped ~12%. Further we are seeing continued selling in ETF's and we are heading for the weakest month in a year in terms of outflows, as market players cover their losses. The (possible) shining light in the near term is that the trade war will completely erupt, which should be bullish for gold. It so-far has failed to ignite any safe-haven demand, however if tariffs and protectionism continues to mount, one would think it would have to bolster gold's appeal.

It was another weak session today, with USDCNH and USDCNY breaking through tech resistance at 6.60 and trading strongly throughout the day. Gold kicked off the session around $1258.50 and traded between $1257-1259 leading into the China open. In what was a similar set-up to yesterday, as soon as USDCNY fixed it shot some 3 big figures higher, pressuring the spot gold price. The SGE premium was also lower again ($3.50-4.50 over LL), which drew out further selling from Chinese participants and whacked spot gold in the aftermath of the CNY fix. We traded swiftly down to the o/n lows at $1255.20 and eventually pushing through. There was some bids seen on Ecomex ($1253-55 cash equivalent), which steadied the decline however. Some Chinese demand also chimed in when the USD showed signs of easing and stabilising. That being said, it was still a soft session and it will be interesting to see where we head today. Gold has fallen some -3.3% since the start of the month, and once we see quarter end push through we may see a little more demand surface, particularly if the USD slows.

 

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 06 July 2018

MACRO: Few surprises were found in todays release of the minutes from the most recent FOMC meeting. The Fed indicated support for gradual rate increase and noted that interest rates could be around the "neutral" level sometime next year. Solid gains in US equities were led by the tech sector, which had it's best session in over month. The Dow added 181.92 points, or 0.75%, to 24,356.74, the S&P 500 rose 23.39 points, or 0.86% to 2,736.61, while the Nasdaq gained 83.753 points, or 1.12%, to 7,586.426. There were wins for tech (+1.47%), consumer staples (+1.46%) and REITs (+1.36%) while energy (-0.16%) was the lone laggard. European equities were higher, the EuroSTOXX put on 1.54 points, or 0.41%, to 381.59, the German DAX advanced 146.68 points, or 1.19%, to 12,464.29, and the London FTSE 100 rose 30.31 points, or 0.40%, to 7,603.22. In the currencies, the US dollar index slipped 0.13% to 94.409, the EUR was as high as 1.1717, while USD/JPY traded up to 110.68. US treasury yields were mixed, the 2 year yield firmed 2.65 bps to 2.5507% and the 10 year yield remained flat at 2.8309%. Oil prices were lower following an increase in US stockpiles, Brent sold off 0.86% to $77.57, while WTI eased 1.31% to $73.17. Base metals were mixed, with copper (-0.64%) the biggest mover. In US economic data, ADP reported that the private sector added 177k jobs in June, following an upwardly revised 189k increase in May. Initial jobless claims rose by 3k to 231k in the week ending June 30, while continuing claims increased by 32k to 1.74 million. The ISM non-manufacturing index rose to 59.1% in June from 58.6% in May, exceeding economists expectations of a 58.3% reading. The Markit services PMI final reading came in at 56.5 for June, down slightly from the 56.8 reading in May. In Asia today, as I write the Nikkei is at +0.67%, the Shanghai composite is at -1.18%, the Hang Seng is at -0.82%, and the ASX S&P 200 is at +0.67%. Tonight we have non-farm payrolls, unemployment rate, average hourly earnings, and foreign trade in goods/services out of the US; and industrial production figures out of Germany.

PRECIOUS: A more subdued session for the precious as gold remains within the recent range. Gold opened at $1256 in Asia and drifted lower through the day as USD/CNY recovered, the SGE premium was around $1-1.50 which prompted selling out of China. We saw a brief recovery to the opening levels just prior to the London open as the EUR jumped on positive German factory data. The joy was brief, however, as the market was soon testing the overnight low at $1251 during the London AM session. The yellow metal climbed to the days high of $1259 in NY on the back of softer than expected ADP employment figures, before closing out the session slightly in front at $1257. Silver struggled to stay above $16, trading lower during London AM and closing right on the level in NY. PGMs were flat following some big moves earlier in the week. The Philadelphia gold and silver index added 1.02%. In Asia today, gold was under early pressure from a stronger USD and easing SGE premium. The yellow metal was sold to a low of $1252.90, but has recovered to $1255.20 as I write. Silver once again dropped below the $16 level as China came in today, however the grey metal has bounced back and is sitting at $16.01 as I write. PGMs are relatively unchanged from the opening levels.

 

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 02 July 2018

MACRO: Chinese service sector activity picked up modestly during June according to data released on Saturday. The non-manufacturing PMI improved to 55.0 (exp: 54.8) from 54.9 previously, while the manufacturing PMI eased to 51.5 (exp: 51.6) from 51.9 previously. U.S. consumer prices accelerated during May, seeing the Federal Reserve's preferred inflation measure hit the 2% target for the first time in 6 years. Personal consumption expenditures (PCE) improved +0.2% MoM during May (exp: +0.2%) to match April's increase, while on an annualised basis PCE jumped +2.3% YoY (exp: +2.2%) from +2.0% previously. Core PCE (ex food and energy) pushed +0.2% MoM higher during May and +2.0% YoY, the highest print since April 2012. Personal income rose +0.4% MoM (exp: +0.4%) from +0.2% previously. The Chicago PMI index spiked to the highest level in five months during June, printing 64.1 (exp: 60.0) from 62.7. The headline print was underpinned by strength across prices paid, hitting the highest level in seven years, while new orders also firmed. The University of Michigan's consumer confidence index was revised lower during June, sliding to 98.2 (exp: 99.0) from 99.3 previously. Consumer expectations declined from 87.4 to 86.3, while current conditions fell from 117.9 to 116.5. Equity markets in the U.S. ended Q2 on a positive note, as a broad based rally saw the major bourse's close higher. The DJIA added +0.23% to 24,271.41 points, ending the week -1.2% lower, the month -0.6% lower, however gained +0.7% over Q2. The S&P 500 tacked on +0.08% with gains underpinned by energy stocks (+0.65%) leading 8 of eleven components higher. Over the week the bourse declined -1.2%, over the month posted a +0.5% return on the way to a +2.9% Q2 gain. The greenback closed out a strong quarter on a negative note, sliding -0.8% on Friday as majors reclaimed ground against the benchmark. The euro posted notable gains following an agreement between European Union leaders on immigration issues, consolidating back above 1.16 to book a +1% return. Over Q2 the greenback jumped 5.8% to mark the first positive quarterly result since late 2016 as the pound was off -5.9%, the euro fell -5.3% and the yen declined -4.7% over the period.

PRECIOUS: Gold prices traded -3.5% lower during June and collapsed more than -5.5% over Q2, largely in the face of dollar headwinds. The metal struggled to find support on safe-haven appeal as on-going trade tensions continue to trouble investors, while in recent times, calm on the Korean peninsula and softer Chinese currencies have also hurt the metal. Gold was able to close above USD $1,250 on Friday, seeing some respite from a softer USD/China throughout European and U.S. hours after the Chinese currencies battled early offers in Asia. Interest in the yellow metal in Asia was generally limited to mild Chinese physical demand, while bids underneath USD $1,250 across Globex were evident to underpin price action. A leg higher to the euro in London helped support price action through USD $1,250, while New York saw a brief spike through USD $1,255 to mark the session high.

A Hong Kong holiday today saw bullion kick off Q3 in a rather muted fashion, with the metal adding a few dollars in early flows to touch USD $1,254 leading into the Chinese open. Gains to the euro and the yen on Friday were extended in early trade, with the yen notably printing above 111.00. It wasn't long however until the greenback regained the ascendency, pushing USD/China higher and reversing early session gains to majors. The yellow metal broke underneath USD $1,250 in afternoon flows as USD/CNH jumped to a 6.665 high, almost +0.6% on the session. A mild stop loss run through the Friday low saw USD $1,247.90 marked as the session low today. COTR data shows positioning continues to lighten, while ETF outflows have seen holdings condense to just over 70 million ounces, down around -2.3% in June. It will be interesting to see whether the producer selling we have been seeing in recent weeks dissipates now we have finished Q2, possibly freeing up some resistance to top-side moves. Supportive price action is still evident underneath USD $1,250 through to USD $1,246, while below this targets extend to USD $1,236.

A historic day in Mexico as Andres Manuel Lopez Obrador looks to have secured victory in the presidential race. In a landslide result, President-elect Lopez Obrador is estimated to have received over 53% of the vote, more than double of his closest rival. President Trump has already passed on his congratulations via twitter, noting that he "...very much looks forward to working with him." President-elect Lopez Obrador has vowed to stamp out political corruption and drug violence. Data releases today include Markit manufacturing PMI prints from Italy, France, Germany, the Eurozone, the U.K. and the U.S. We also see Eurozone PPI, the Eurozone unemployment rate, U.S. construction spending, U.S. ISM manufacturing and U.S. ISM prices paid.

 

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 26 June 2018

MACRO: New home sales in the U.S. spiked higher during May, increasing +6.7% MoM (exp: +0.8%) to a seasonally adjusted annual rate of 689,000. The monthly gain saw new home sales to the highest level since November 2017, with the headline figure underpinned by a +17.9% gain in the South to a rate of 409,000 units, the highest level since July 2007. Sales in the Northeast sunk -10%, sales in the West were down -8.7%, while the Midwest was unchanged. The median new house price declined -3.3% to USD $313,000 in May to mark the lowest level in 12-months. The Chicago Fed's national activity index turned negative in May for the first time since January, sliding to -0.15 (exp: 0.30) from an upwardly revised +0.42 in April (prev: +0.34). The monthly print saw the less volatile 3-month moving average to 0.19 from 0.48 in April, also the lowest reading since January. Production related indicators weighed upon the headline print, while employment related indicators edged higher. Equity markets in the U.S. turned sharply lower on Monday, weighed down by 'trade war' headlines to see the DJIA close beneath the 200 DMA for the first time since June 27, 2016. The DJIA dropped -1.33% to 24,452.80 points as 26 of the bourse's components ended lower, taking the blue-chip average to its largest single-session fall since May 29. The S&P 500 (-1.37%) saw technology stocks (-2.28%) lead 9 of eleven components of the bourse lower to end at 2,717.07 points, marking the largest single-session decline since April 6 and the lowest close since May 31. The tech-laden Nasdaq Composite collapsed -2.09% to 7,352.006 to book the largest single-session decline since April 6 on concerns over the blocking of Chinese investment in U.S. technology firms. The greenback ended mixed trade lower on Monday, as gains to USD/China were tempered by strength across safe-haven currencies such as the yen. The DXY index booked a -0.22% decline, easing around -0.2% against the yen, while the euro consolidated above 1.1700 to add around +0.33%. Treasury yields in the U.S. eased on the back of weakness across equities, seeing the 10-year 2.7bps lower to 2.875% and the two-year around 1bp lower to 2.532%.

PRECIOUS: A disappointing session for gold on Monday, failing to capitalise on a softer greenback and falling equities, ending toward the session low print. The metal reversed an initial bid tone in Asia once Shanghai opened, under pressure from a firmer USD/China following the weekend RRR cut by the POBC. A premium of around USD $4 in China saw downwards pressure on the metal, triggering a stop loss run through USD $1,270 and opening up a further extension underneath USD $1,265 in late Asian trade. A reversal to the buck provided support once London opened, as the metal piggybacked a stronger euro through 1.1700 to test briefly through USD $1,270. The bid tone was however short lived and bullion took pricing cues in New York from a broader sell-off in commodities to end trade around USD $1,265. Vols firmed marginally overnight, however remain cheap with 1m underneath 9.0. The white metals came under heavy selling pressure on Monday as global equity markets and base slumped, notably palladium collapsed -1.7%.

Gold once again tested support underneath USD $1,265 during Asian trade on Tuesday, with a robust USD/China continuing to weigh upon interest out of Shanghai. The precious complex is struggling against ETF outflows (holdings down 1.5m ounces in June), while failing to find support from ongoing 'trade war' headlines as President Trump turns focus from China to Europe. It is difficult to see at catalyst for a move outside of the recent range, with expectations that the metal will remain soft into the end of the financial year. Support hold broadly around USD $1,260 - $1,262, with the metal likely drawn to this level into today's option expiry of around 1 million ounces at USD $1,260. Resistance for the metal comes in around USD $1,272 - $1,275. Data releases today include U.S. house prices, the Richmond Fed manufacturing index and the Conference Board U.S. consumer confidence print.

 

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

DAILY REPORT : Thursday 05 July 2018

MACRO: A relatively quiet session on Wednesday with the U.S. out for Independence Day. Mortgage applications in the U.S. eased -0.5% MoM during the week ended June 29, while applications were off -13.5% compared to the same week a year ago. Equities in the U.S. were closed, however futures eased in-line with weakness across European markets as global trade concerns continued to weigh upon risk appetite. The Stoxx Europe 600 inched +0.06% higher, while the German Dax declined -0.26% as ongoing political disputes continue to create uncertainty around the coalition government. In the U.K. the FTSE 100 fell -0.27% on the back of a stronger pound and concerns over global trade. Some European Central Bank policy makers are concerned that investors aren't pricing an interest rate hike until December 2019, while people familiar with the matter have suggested a move in September or October is on the cards. The news gave the euro a boost, paring earlier session declines to finish relatively flat. The greenback booked a modest -0.02% decline on the session after opening softer in Asia, sliding against the yen and the pound.

PRECIOUS: A positive session for gold on Wednesday, buoyed by dollar declines amid further weakness to USD/China to consolidate Tuesday's gains above USD $1,250. Heavy selling to USD/CNH saw the pair off -0.4% on the session to underpin bullion price action, extending gold through USD $1,260 in early Shanghai hours. Mild offers through USD $1,260 restricted any further top-side gains in Asia, however the yellow metal remained firm throughout the session to once again break above USD $1,260 in early London hours. Activity was relatively muted throughout the European afternoon and with an early close on Comex due to Independence day in the U.S. gold held USD $1,255 to end around +0.3% higher.

Gold saw mixed price action during Asian trade on Thursday, however ultimately ended marginally lower after running into dollar headwinds. The yellow metal saw an early session bid tone reversed as USD/China recovered from opening declines, dragging bullion off the session high print of USD $1,258.10 to test underneath USD $1,255 during the Chinese lunch break. Afternoon Asian trade saw price action underpinned by a leg higher to the euro following stronger than expected German factory orders, supporting bullion back toward USD $1,255. Gold continues to see resistance above USD $1,260 and from a technical perspective will be looking for a close above this figure for a sign of further strength. With pricing still largely determined by dollar flows participants will be focusing on today's FOMC minutes release in addition to private payrolls data leading into Friday's nonfarm payrolls figure. Data today includes U.S. ADP employment, Initial jobless claims, Bloomberg U.S. consumer confidence, Markit U.S. services / composite PMI prints, ISM non-manufacturing composite PMI and the June FOMC meeting minutes.

 

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 29 June 2018

MACRO: US equities pared early losses to finish higher as the financial sector snapped a 13 day losing streak. The Dow added 98.46 points, or 0.41%, to 24,216.05, the S&P 500 rose 16.68 points, or 0.62% to 2,716.31, while the Nasdaq gained 58.598 points, or 0.79%, to 7,503.683. There were wins for telecoms (+2.29%) and tech (+1.08%) while energy (-0.12%) led the laggards. European equities were lower, the EuroSTOXX gave up 3.10 points, or 0.82%, to 376.87, the German DAX slumped 171.38 points, or 1.39%, to 12,177.23, and the London FTSE 100 fell 6.06 points, or 0.08%, to 7,615.63. In the currencies, the US dollar index crept up 0.04% to 95.332, the EUR was as low as 1.1529 before a bounce later in the day, while USD/JPY traded up to 110.63. US treasury yields were higher, the 2 year yield firmed 0.81 bps to 2.5121% and the 10 year yield advanced 1.09 bps to 2.8365%. Oil prices were mixed, Brent rose 0.21% to $77.78 while WTI sold off 0.15% to $73.17. Base metals were mostly lower, with copper (-1.04%) leading the losses. In US economic data, GDP growth for the first quarter of 2018 was revised to a seasonally adjusted annualised rate of 2% from the initial 2.2% estimate. Initial jobless claims rose 9k to 227k in the week ending June 23. Continuing claims fell by 21k to 1.71M. In Asia today, as I write the Nikkei is at -0.34%, the Shanghai composite is at +0.98%, the Hang Seng is at +0.99%, and the ASX S&P 200 is at +0.03%. Tonight we have personal income, consumer spending, core inflation, Chicago PMI, and consumer sentiment out of the US; and inflation data out of the Eurozone.

PRECIOUS: Gold opened at $1251 in Asia and remained between $1251-54 for most of the day with the SGE premium slightly firmer at $3-4. We saw a late dip below $1250 just as London came in, but the metal was back up around $1252 by the time NY opened. The yellow metal drifted lower through the remainder of the session, printing yet another 2018 low, at $1246, in the process. Silver was sold to a session low of $15.92 and closed below the $16 level for the first time since December last year. The PGM's came off as well, platinum and and palladium finished at $844 and $944 respectively. The Philadelphia gold and silver index lost 0.13%. The SPDR Gold Trust sold 0.14% of holdings to 820.51mt. In todays trading, Gold traded around $1246-49 through the morning session with the SGE premium a little lower at $2-3 over loco London. The EUR has surged above 1.16 this afternoon after EU leaders reached a deal on immigration at their summit, this has had a positive effect on the yellow metal which has risen to $1250.80 as I write. Silver has enjoyed a late rise also, the grey metal sits at $16.09 as I write. Gold has come off almost 5% from the June high printed 2 weeks ago, due mostly to broad strength in the US dollar, though there is feeling in some quarters that we may be nearing the bottom of this recent downturn. Support-wise, the metal appears fairly well bid around $1245-48 and their should be support at the December 17 low of $1237 below that. On the upside, expect some initial resistance around $1254 followed by this weeks high of $1272.

 

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 25 June 2018

MACRO: The People's Bank of China announced on Sunday that the required reserve ratio will be cut by 50bps for some banks from the current 16% for large banks and 14% for small banks from July 5. The cut is estimated to release around CNY 700 billion of liquidity to increase lending, predominately aimed at supporting smaller companies. OPEC ministers announced a deal on Friday that will increase oil supplies by what is expected to be around 600,000 to 800,000 barrels per day. The official statement from the organisation said members agreed to return to 100 percent compliance with the 2016 deal, while the group said compliance reached 152 per cent in May 2018. Turkish election results released on Monday show President Erdogan is likely to win a new five-year term, with state media putting him on 53% and his closest rival Muharrem Ince on 31%. The opposition is yet to officially concede and said it would continue its democratic fight whatever the result.

Equities in the U.S. ended generally higher on Friday to see the DJIA snap an eight-session losing streak, buoyed by an OPEC driven run higher to energy shares. The DJIA ended the session +0.49% higher at 24,580.89 points, however on a weekly basis handed back -2%. The S&P 500 added +0.19% to 2,754.88 points as gains were underpinned by energy stocks (+2.20%) leading 8 of eleven components higher, however easing -0.9% on the week. The Nasdaq Composite underperformed to book a -0.26% fall to 7,692.817 points, shedding -0.3% on the week to snap a four-week run of gains. The U.S. Markit (flash) services PMI held relatively firm during June, easing marginally to 56.5 (exp: 56.5) from 56.8 in May as higher levels of service sector activity were supported by increases to new work and solid job creation. The manufacturing sector disappointed however to see the Markit PMI sink to 54.6 (exp: 56.1) from 56.4 in May, signalling the slowest improvement in overall business conditions since November 2017.

PRECIOUS: The greenback was the main driver of price action during Asian trade on Monday, ripping higher against the Chinese currencies following the weekend RRR cut by the PBOC, while the safe-haven yen acted to put the brakes on further dollar gains. The DXY index added around +0.22% on the session, however spiked +0.5% and +0.64% against the CNY and CNH respectively. The Chinese weakness saw the Shanghai premium fall to around USD $4, stifling any interest in the yellow metal that could have acted to underpin London pricing. Comex option expiry this week sees large open interest toward USD $1,260, which is likely to keep price action heavy over the near-term, however should also act to restrict declines underneath the figure. With regards to the latest positioning data we see net longs have fallen to the lowest levels in 11-months, while gross shorts have spiked to the highest level since August 2017. Silver was unable to capture the USD $16.50 handle and traded well offered through Asian trade on Monday, while platinum looks to have room to move higher with the latest COTR report showing net futures and options length at the lowest level since October 2006. The metal tested a break of USD $880 during early session pricing on Monday, however was dragged lower with the remainder of the precious throughout the day. Data today include German IFO survey results and U.S. new home sales.

 

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

DAILY REPORT : Wed 04 July 2018

MARKETS/MACRO: It was a mixed session overnight with lingering concerns over trade tensions somewhat offset by reduced fears over stability of the German coalition government. Chancellor Angela Merkel and the CSU leader Horst Seehorfer managing to reach an agreement on the German migration policy. The Greenback eased from the previous session, the Dollar Index easing back -0.3% to 94.59 with EURUSD slightly higher by +0.2% at 1.1660. USDCNH again went on a roller-coaster ride yesterday, punching to fresh highs shortly after the USDCNY open (6.7332) although subsequently giving up gains into the Asia close and throughout Europe closing the day around 6.6650. U.S. equities closed lower on Tuesday, reversing earlier gains as losses in the Technology and Financials sectors outweighed advances in Energy, Telecoms and Real-Estate shares. Trading volumes were lower than normal because of a shortened session ahead of the Fourth of July holiday on Wednesday. The Dow Jones Industrial Average shrugged off -132.36 points (-0.54%) to 24,174.82, the S&P500 sold off -13.49 points (-0.49%) to 2,713.22 and the NASDAQ Composite slumped -65.013 points (-0.86%) to 7,502.673. European stocks finished higher on the day, led by higher German stocks thanks to Chancellor Merkel steering her coalition government away from immediate collapse over migration. The EuroStoxx 600 index rose +3.06 points (+0.81%) to 379.81 and the EuroFirst 300 added +12.44 points (+0.84%) to 1,487.46. Crude oil prices paired earlier gains as investors become increasingly concerned about rising supply. After AUG18 WTI reached $75.27 midway through the session, prices fell sharply ($72.73 low) after reports that the Saudi Arabian cabinet had affirmed the kingdom’s readiness to use the spare capacity when needed to deal with any futures changes in oil supply (Al Jazeera). The kingdom and Russia also reiterated that they will make adjustments equivalent to an additional 1M b/d under the agreement reached last week. For treasuries, the U.S 10y yield decreased -4.02 bps to 2.831% and the 2y yield fell -2.43 bps to 2.524%.

On the data front, new orders for U.S manufactured goods rose +0.4% MoM in May, following an upwardly revised -0.4% drop in April and easily beating market expectations of 0%. Orders for machinery increased +1.2% and those for motor vehicles rose +0.3%. Meanwhile there were declines in orders for primary metals (-0.3%), fabricated metal products (-1.1%) as well as electrical equipment, appliances and computers and electronic products (-0.2%). The Commerce Dept's report said durable goods orders fell by a revised -0.4% in May following a -1.0% slump in April. Elsewhere, the Australian Central Bank (RBA) remains firmly on the sidelines of the global trend toward higher interest rates, singling out the prospect of a damaging global trade war in its latest interest rate decision. The Reserve Bank board left the official interest rate unchanged at 1.5% for the 23rd month in a row yesterday, staring down calls from some quarters to follow the U.S in returning official rates to higher levels while the economy is growing strongly. The AUD dropped to about 0.7320 on the announcement, almost setting a new 2018 low against the US dollar, but bounced back in afternoon trade.

PRECIOUS: Gold hit fresh lows during the Asia session yesterday ($1238.25), but as the USDCNY pulled back some 5 big figures from the highs, the metal recovered and and closed back through $1250. Gold opened yesterday around $1242 with no real buying into the lead up of the SGE and pressure seen from a much weaker platinum. As has happened the previous days this week, USDCNY gapped higher on the open triggering a broad rally in the USD across a number of asset classes. Gold as a result was pushed to fresh cycle lows just above $1238, with some buying emerging on the approach of the December 2017 low - $1236.50. From there the USDCNY / USDCNH began to sharply turn, trading back through 6.70 respectively and the precious found some underlying demand. USDCNY and USDCNH continued to sell-off into the European morning, helped by the headlines 'PBOC is monitoring FX rates closely' and the precious metals all continued to work their way higher, gold pushing through $1245 and then $1250 around the NY open. The yellow metal continued a steady climb to $1257, before most U.S markets closed early ahead of the Independence day holiday. It then casually flatlined around $1252.50 into the session close. Platinum was a stand out of the day in terms of volatility and turnover (~35,000 lots). Leading on from Monday's rout (~-$35.00 drop), platinum continued to trade heavily Tuesday with strong selling from Japanese and Chinese names. It opened at $818 and traded briefly below $800 with the surge in USDCNY. The metal snapped back sharply from there rallying back an impressive +6.0% to $845 by mid-NY and maintaining $840 into the close. Given the aggressive sell-off over the past few weeks it is no surprise we have seen a bit of a bounce across the complex - it will certainly be interesting to see whether the upward momentum can be maintained into the end of the week.

Gold opened this morning on positive footing and continued to build on yesterdays momentum in early trade. Fast money types were in looking for offers early and the metal ticked up a few dollars as result, pushed along also by a softening USD. When China opened for business USDCNH and USDCNY weakness continued, the former falling from 6.6650 to 6.63 and the latter shedding 2 big figs to 6.6185. Gold ran from $1256 to just north of $1260 quite quickly but did encounter a bit of resistance there. The SGE premium remained fairly stable over the day between $3.50-5.00, despite the currency moves. As I write the USDCNH and USDCNY are looking soft again and gold is pushing back toward $1260. Given the 4th of July holiday in the States, we expect the markets to be illiquid and quiet with the metals to consolidate close to their current levels.

 

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

DAILY REPORT : Thursday 28 June 2018

MACRO: Durable goods orders in the U.S. declined -0.6% in May (exp: -1.0%) from an upwardly revised -1.0% fall in April (prev: -1.6%). Orders excluding transportation eased -0.3% MoM (exp: +0.5%) from a +1.9% gain previously as orders for motor vehicles and parts sunk -4.2% to mark the largest drop since January 2015. Orders for non-defence capital goods (ex-air), a closely watched proxy for business spending plans, eased -0.2% MoM (exp: +0.5%) to follow a +2.3% gain the month prior. Pending home sales in the U.S. declined during May, sliding -0.5% MoM (exp: +0.5%) to follow a -1.3% fall the month prior. Declines were concentrated in the South (-3.5%), while the Northeast gained+2.0%, the Midwest added +2.9% and the West rose +0.6%. Equity markets in the U.S. traded heavily on Wednesday, driven by sharp declines to technology names and concerns over trade policy. The DJIA shed -0.68% to 24,117.59 points to end underneath its 200 DMA for a third consecutive session. The S&P 500 sunk -0.86% to 2,699.63 points and ended below its 50 DMA as technology stocks (-1.45%) led 8 of eleven of the bourse's components lower. The greenback rallied against majors on Wednesday, seeing the DXY +0.6% higher after headlines indicating President Trump had decided against signing an executive order against Chinese investment in U.S. tech companies. Oil futures ripped higher on Wednesday following a U.S. Energy Information report showing domestic crude supplies fell by 9.9 million barrels for the week ended June 22, the largest weekly decline this year. WTI surged +3.2% to settle at USD $72.76 per barrel, the highest finish for the benchmark since late November 2016. Brent crude ended the session +1.7% higher to USD $77.62 per barrel to mark the highest close since May.

PRECIOUS: Gold continued to trade softly during Asian trade today, however was able to hold above the previous session low print as the greenback held relatively unchanged. A mild early session bid saw bullion through USD $1,254 into the Chinese open, however further weakness to USD/China in early Shanghai trade dragged the metal lower once again, however seeing only modest volumes through Globex to hold the metal within a narrow range. Afternoon price action saw bullion skew marginally to the down-side as the greenback caught a mild bid into the London open, seeing gold touch a USD $1,251.25 low, with good supply evident toward USD $1,250 to restrict further declines. Gold continues to be weighed upon by ETF outflows, with a further 140k ounces registered on Wednesday, while a rampant greenback adds further weight to the price action. Initial support for the metal sits broadly around USD $1,250, while below this the Dec 2017 low of USD $1,236 will become vulnerable. Data releases today include German CPI, U.S. Initial jobless claims, U.S. GDP and U.S. PCE.

 

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

DAILY REPORT : Friday 22 June 2018

MACRO: US equities finished lower as fears of a global trade war persist. The Dow lost 196.1 points, or 0.80%, to 24,461.70 to continue an 8 day losing streak, the S&P 500 fell 17.56 points, or 0.63% to 2,749.76, while the Nasdaq sold off 68.563 points, or 0.88%, to 7,712.952. There were wins for REITs (0.62%) while heavy losses in energy (-1.93%) and industrials (1.19%) weighed on the markets. European equities were lower as Italian financial stocks were sold on reports that the country had appointed a Euroskeptic to its Senate finance committee. The EuroSTOXX gave up 3.44 points, or 0.90%, to 380.85, the German DAX slumped 183.25 points, or 1.44%, to 12,511.91, and the London FTSE 100 fell 70.96 points, or 0.93%, to 7,556.44. In the currencies, the US dollar index eased 0.25% to 94.883, the EUR 1.1624, while USD/JPY was as low as 109.84. US treasury yields were lower, the 2 year yield eased 2.9 bps to 2.5369% and the 10 year yield fell 4.22 bps to 2.8967%. Oil prices were mixed as OPEC and other key allies head toward a decision to raise global output, though US prices were supported by a sharp drop in inventories reported on Wednesday. Brent slipped 2.23% to $73.07 while WTI firmed 0.14% to $65.80. Base metals were moderately higher for the most part, though zinc (-2.57%) bucked the trend. In US economic data, the Philly Fed manufacturing index declined sharply to 19.9 in June from a reading of 34.4 in May. The new orders index tumbled by almost 23 points to 17.9. The Conference Board's leading economic index rose 0.2% in May following a 0.4% increase in April, a measure of current conditions also rose 0.2%. Initial jobless claims fell by 3k to 218k in the week ending June 16, while continuing claims rose by 22k to 1.72M. In Asia today, as I write the Nikkei is at -0.78%, the Shanghai composite is at -0.09%, the Hang Seng is at +0.02%, and the ASX S&P 200 is at -0.11%. Tonight we have Markit manufacturing PMI (flash) and Markit services PMI (flash) out of the US; and consumer confidence (flash), Markit manufacturing PMI (flash) and Markit services PMI (flash) out of the Eurozone.

PRECIOUS: Flat session for the precious as goldclaws back early losses. Gold opened at $1268 in Asia and, despite an early creep higher, was sold steadily through the day as the US dollar picked up ground against the yen. The SGE premium opened around $4-5 and we did see some buying action on the way down, though not enough halt the decline which saw the market reach $1262 as London came in. Gold then steadied around the Asian lows during the London AM session before dipping to a 6 month low of $1261 on the open in NY. The yellow metal saw it's fortunes reversed during NY hours as investors turned on the greenback. Gold climbed steadily higher to the days high of $1270 on broad USD weakness, before easing in the late afternoon to a close at $1266. Silver dipped to a 3 week low $16.17 before paring it's losses to finish at $16.30. Palladium was the worst performer, slumping $17 off the open and closing near the lows. In Asia today, gold has hovered around $1267-69 before ticking up over $1270 late in the day as the EUR firms. The SGE premium was around $3-4 over loco London. The yellow metal is at $1269.40 as I write. Silver reached a high of $16.40 and is sitting at $16.39 as I write. PGMs are edging higher also. Gold should find initial support at yesterdays low of $1261 with the December 17 low of $1641 below that. On the upside, expect broad resistance between $1275-80, with the psychological $1300 level the target above there.

 

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.