DAILY REPORT : Thursday 31 Aug 2017

MACRO: Private payrolls in the U.S. increased by 237k during August (exp: 185k) to follow an upwardly revised 201k the month prior (exp: 178k). Small business added 48k jobs, medium sized increased by 74k and large size jumped by 115k employees. The services sector was predominately responsible for the headline gain and added 204k payrolls, while within the goods producing sector mining declined 1k jobs, construction increased 18k and manufacturing posted a 16k gain. U.S. 2Q GDP outpaced initial estimates to increase +3% QoQ (exp: +2.7%) from a +2.6% estimate previously. The result was the fastest pace in more than two years and followed a +1.2% print for 1Q. Supporting the headline figure was a +3.3% increase to consumer spending (exp: +3.0%) to mark the fastest pace in 12-months on the back of higher purchases of motor vehicles, housing and utilities. The Fed's preferred inflation measure, core personal consumption expenditures (PCE) increased in-line with initial estimates and expectations at +0.9%. Equity markets in the U.S. ended higher on Wednesday, buoyed by the better than expected GDP print and the strong jobs data. The DJIA rebounded from late session weakness to inch +0.12% higher at 21,892.43 points, while the S&P 500 (+0.46%) saw technology (+1.07%) lead eight of eleven sectors higher to close at 2,457.59 points. The Nasdaq Composite meanwhile outperformed to post a +1.05% gain as a number of major biotech names ended with strong gains. Oil futures endured whippy trade on Wednesday to end lower as Hurricane Harvey continues to keep participants on edge and volatility high. An EIA report noting that U.S. domestic crude production declined by 5.4 million barrels during the week ended August 25 did little to support prices, as WTI ended around -1% lower underneath USD $46 per barrel, while Brent crude collapsed -2.2% following European weakness to end around USD $50.85 per barrel. European markets ended trade on Wednesday with modest gains as German CPI (harmonised) outperformed expectations during August to increase +0.2% MoM (exp:+0.1%) and +1.8% YoY (exp: +1.7%). The Stoxx Europe 600 led the major bourse's higher to post a +0.70% gain as tensions over North Korea's latest missile launch eased, while the German Dax added +0.47% to snap a three session losing streak.

PRECIOUS: The return of the greenback weighed upon bullion on Wednesday as the USD continued to reverse recent weakness, notably against the euro and Japanese yen. Interest either side of USD $1,310 kept price action varied during early Asian trade, before Chinese demand underpinned a bid tone as USD/CNY opened softer than expected. European names were initially happy to offer the metal above USD $1,310, however soon reversed course as the USD recovery stalled and gold broke to a session high of USD $1,313.65. The stronger than expected U.S. data soon pulled the metal away from the session highs, however underlying interest toward USD $1,305 restricted further declines to see gold end the session only modestly lower and relatively resilient amid firmer global equities and a stronger greenback. Asian trade on Thursday saw price action generally pinned within a USD $1,303 - $1,308 range, however the yellow metal was tested in early Chinese trade by an 800k ounce sweep to USD $1,299.50 to mark the session low. Chunky bids around the psychological figure restricted any further declines, while a modest recovery to the euro leading into European hours kept price action buoyant. Bullion continues to battle against participant's fading rallies, however interest has so far been deep enough to absorb selling pressure and consolidate recent gains above USD $1,300. Short term direction is likely to be dictated by Friday's U.S. jobs data, with expectations that bullion holds the recent USD $1,300 - $1,315 range leading into the print. From a support standpoint it is worth noting that USD $1,300 Dec gold is currently sitting around USD $1,295 spot. Data today includes French CPI, German retail sales and employment data, Eurozone CPI and employment data, U.S. initial jobless claims, personal income / spending, PCE, Chicago PMI, Bloomberg consumer confidence and pending home sales.

 

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

DAILY REPORT : Friday 25 Aug 2017

MACRO: Investor focus is on the central banks annual symposium in Jackson Hole, Wyoming, starting on Friday. Fed Chair Janet Yellen and the head of the ECB Mario Draghi will both be addressing the conference, and though no major policy announcements are expected, investors will be listening closely for any hawkish/dovish commentary by the pair. US equities were lower in fairly volatile trading common to this time of year as volumes remain low. The Dow lost 28.69 points, or -0.13%, to 21,783.40, the S&P 500 fell 5.07 points, or 0.21%, to 2,438.97, and the Nasdaq slipped 7.08 points, or 0.11%. to 6,271.326. Healthcare (+0.28%) was the only sector to put up any kind of resistance as consumer staples (-1.34%) and industrials (-0.39%) led an almost broad decline. European shares were higher, the EuroSTOXX rose 0.59 points, or 0.16%, to 374.51, the German DAX edged higher 6.53 or 0.05%, to 12,180.83, the London FTSE 100 increased by 24.41 points, or 0.33%, to 7,407.06. In the currency markets, the US dollar index firmed 0.15% to 93.289, the EUR traded down to 1.1785, while USD/JPY traded up to 109.57. US treasury yields were higher, the 2 year yield rose 2.46 bps to 1.3297%, while the 10-year yield gained 2.79 bps to 2.1939%. In commodities news, oil markets were lower Thursday with Brent losing 0.82% to $52.14 and WTI declining 1.71% to $47.59. Oil prices may receive a boost over the coming days as Hurricane Harvey intensifies in the Gulf of Mexico. The storm is expected to make landfall in Texas late Friday night, supply interruptions are expected as many refiners are already running at reduced rates and some may shut down production completely. Base metals were broadly higher, with copper (+1.87%) the big mover. In US economic data, high demand and lean supply continue to characterise the housing market as existing home sales fell 1.3% to a seasonally adjusted annual rate of 5.44M in July, the lowest rate since August last year according to the National Association of Realtors. Inventory was 9% lower than a year ago and at the current sales pace it would take 4.2 months to exhaust the available supply. Initial jobless claims rose by 2k to a seasonally adjusted 234k in the week ending August 19, continuing jobless claims remained unchanged at 1.95M. The Kansas City Fed manufacturing activity index climbed to 16 in August from 10 in July. In Asia today, as I write the Nikkei sits at +0.57%, the Shanghai composite is at +1.38%, the Hang Seng at +0.83%, and the ASX S&P 200 at +0.05%. All eyes on Jackson Hole for the central bank symposium, we also have durable goods orders and core capital goods orders out of the US; and GDP growth, import prices, and IFO business climate/conditions out of Germany.

PRECIOUS: A very quiet day for the precious as investors remain idle ahead of Friday's meeting in Jackson Hole. Gold opened at $1290 in Asia but couldn't hold above the level, the market dropped a few dollars as the $5 SGE premium led to some light selling out of China. The US dollar started to firm against the yen following the previous nights dip below 109, which also kept the pressure on. We saw a little bounce late in the day before a fall on the London open, the days low of $1284 was printed during the AM session. NY featured whippy trade in light volume before the yellow metal finished the day at $1286. Silver opened at $17.08 and was on the offer early in Asia, reaching as low as $16.85 during the morning in London. The grey metal bounced back from here but couldn't climb back above $17, finishing the NY session at $16.93. PGMs traded a very tight range, platinum and both palladium both closing all but flat. The Philadelphia gold and silver index added 0.56%. The SPDR gold trust holdings were unchanged at 799.29 metric tons. As expected the markets seem to be offering more of the same today as investors sit on their hands ahead of tonight's meeting. Gold is trading very tight $2 range between $1285-87, and the SGE premium was slightly higher at around $5-6 over loco London. The yellow metal is at $1286.70 as I write. Silver is trading sideways, the grey metal is sitting at $16.97 as I write. No action in the PGMs either. Gold looks very well supported ahead of $1280, with the $1283-85 level tested a few times this week and still holding. The weeks high of $1293 would be first target on the upside, followed by the psychological $1300 level.

 

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

DAILY REPORT : Monday 21 Aug 2017

MACRO: The University of Michigan's gauge of consumer sentiment (preliminary) outpaced expectations during August, increasing to 97.6 (exp: 94.0) from an eight-month low of 93.4 in July. The headline print was supported by a strong gain to the expectations component, increasing to 89.0 from 80.5 previously, while the measure of current conditions lagged at 111.0 from 113.4 previously. U.S. equity markets ended lower on Friday, turning into the red late in trade after enduring a mixed session. The major driver on Friday seemed to be the announcement that chief strategist Steven Bannon would be leaving the White House, seeing markets turn higher following a soft open, however reversing theses gains into the close. The DJIA posted a -0.35% decline to end at 21,674.51 points, logging a second consecutive weekly decline and the largest two-week percentage decline in nearly 12-months. Weakness across realestate (-0.75%) and telecoms (-0.54%) led the S&P 500 -0.18% lower for a -0.7% weekly result, while the Nasdaq composite eased -0.09% for the session and -0.6% over the week. Oil futures ripped higher in New York on Friday following unconfirmed reports of a shutdown at Exxon Mobil's Bayton, Texas refinery (the second largest in the U.S.). After soft early U.S. session pricing, WTI turned sharply higher to end the session with a +3% gain around USD $48.50 per barrel, while Brent crude added rallied +3.3% to USD $52.70 per barrel. European markets ended lower on Friday as leisure and travel stocks booked declines following the terrorist incident in Spain. The Stoxx Europe 600 handed back -0.71% to trim its weekly gain to +0.6%, while the German Dax ended -0.31% lower and the U.K. FTSE 100 sunk -0.86%.

PRECIOUS: Volatility was the name of the game on Friday for bullion, briefly trading above USD $1,300 before being unceremoniously dumped in New York as weak positioning bailed on the metal. A range-bound Asian session gave way to a leg higher in early European trade, with light stops triggered above USD $1,290 to see the metal test toward the recent double top resistance at USD $1,296 (April & June highs). The upward momentum continued into New York to see a break above USD $1,300, however the bid tone was soon extinguished as seller's wrestled back control. Looking at the recent increase in long positioning it is likely that the false break of USD $1,300 spooked short-term investors to compound the late session weakness and have gold closing almost USD $20 off the high print. Gold trended higher during Asian trade on Monday, however had to overcome some early session weakness as the metal battled against a stronger USD. A modest pick-up in demand out of China provided a underlying level of support once Shanghai opened, with participants happy to sit on the bid around USD $1,285, a level that provided support during last week's run higher. Uncertainty leading into Jackson Hole may lead to some short-term support for bullion, with both ECB President Draghi and Federal Reserve Chair Yellen scheduled to speak on Friday. In addition, the joint military exercises to be undertaken between the U.S. and South Korea is likely to see a risk premium attached to the metal over the first part of the week. Pricing continues to remain constructive for a further test of USD $1,300, while any corrective moves through USD $1,280 - $1,285 has the potential to extend toward USD $1,265. Data releases today are light, with the Chicago Fed activity index the main 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 : Wed 30 Aug 2017

MARKETS/MACRO: It was a whippy night, with the EUR, JPY and US bonds strengthening initially, only to all experience sharp turn-arounds later in the session. All major European bourses ended lower on the day, but the New York session turn-around in sentiment towards “risk on” saw US stocks grind higher (after opening lower) and US Treasury bonds fall from their highs. All in all, a confusing night of price action no matter how you cut it. The Dow gained +56.97 points, or +0.26%, to 21,865.37, the S&P500 rallied +2.06 points, or +0.08%, to 2,446.30 and the Nasdaq inched up +18.871 points, or +0.30%, to 6,301.886. The best performing sector was industrials (+0.65%), while materials lagged (-0.56%). European equities fell to more than six month lows after North Korea’s missile launch over Japan rattled investors nerves and the EUR rose. The FTSE Euro First 300 index relinquished -14.35 points, or -0.98% to 1,448.19 and the Euro Stoxx 600 slumped -3.87 points, or -1.04% to 368.42. Regionally the FTSE100 slid -0.87%, DAX -1.46% and CAC40 -0.94%. Crude oil prices dipped WTI down -$0.14, or -0.30%, to US$46.43 a barrel, the lowest level in five weeks. Severe flooding due to tropical storm Harvey is affecting refinery capacity and therefore crude demand, with the largest refinery in the US currently operating at just 60% of capacity. Treasuries bull flattened, the U.S 2y yield falling -0.78bps to 1.3175% and 10y yield was off -2.79bps to 2.129%.

On the data front, U.S. consumer confidence strengthened in August to the strongest level in five months buoyed by views on current business conditions. The Conference Board said its Consumer Confidence Index rose to a reading of 122.9 in August (120.7 expected) from a downwardly adjusted 120.0 in July (121.1 prior). The data was broadly positive with the expectations sub-index rising to 104 from 103, while the present situation sub-index leaping to 151.2 from 147.8.

The White House issued a Statement by President Trump (not a tweet) on North Korea that read: “The world has received North Korea's latest message loud and clear. This regime has signalled contempt for its neighbours, for all members of the United Nations, and for minimum standards of acceptable international behaviour. Threatening and destabilising actions only increase the North Korean regime's isolation in the region and among all nations of the world. All options are on the table”. This was followed by a statement by the U.S Ambassador to the UN, Nikki Haley, who said that the North Korea missile was “absolutely unacceptable and irresponsible. No country should have missiles flying over them like those 130 million people in Japan. It’s unacceptable”. She added, North Korea has “violated every single U.N. Security Council resolution that we’ve had and so I think something serious has to happen”. While these are combative statements, markets seemed to have been reassured by the lack of Trump's signature 'tweets' and comments from the Pentagon. The better U.S data also helped.

PRECIOUS: It has been a particularly volatile 24+ hours for gold post the North Korean regime's latest missile test directly over Japan. The news broke yesterday during the hour long Comex break when there were no active markets for precious metals. When Ecomex reopened, gold immediately gapped $5 higher, opening at $1316 and running instantly to just shy of $1320. This was quickly smashed as traders scrambled to cover sell orders above $1315, the metal trading all the way back down toward $1313.50, before a second wave of buying took us to fresh 1 year highs around $1324.50... and this was all in the opening 20 minutes! From there we gradually retreated back towards $1315 as the SGE open approached. There was some speculative interest around on the SGE initially with the premium opening at $3 and quickly moving up to $5. This did taper off after the first hour of trade however, keeping spot gold between a $1315-18 range, yet still turning over serious volume (~70,000 lots Dec gold in first 5 hours - triple the usual). As London came online specs and momentum traders were looking for offers. The yellow metal traded to fresh intra-day highs around $1326 around the same time USDJPY hit the lows of the day at 108.27. Things reversed rather dramatically from there and into NY. USDJPY reversed its losses all the way back to 109.90, U.S. 10y bond yields moved back above 2.1% and gold gave up all the days gains and some, trading as low as $1305.40 late in NYK. Some later buying did emerge however and we closed around $1310 - exactly where it closed the previous day. Gold vols spiked on the day with 1m atm vol sitting around 12.6%, 3m 12.45%, 6m 12.9% and 1y 13.8%. EFP's also moved considerably to the right, trading around $5.0 (Dec) on Monday and moving out towards $5.5 yesterday - suggesting good selling in Dec gold on the day. Technically, it will be important for the metal to hold above $1295-1300 (April + June highs) to keep the recent upward momentum intact. For now we feel pullbacks into this area will represent good buying opportunities for a test of $1337-38 in the short to medium term.

The metals were still volatile today, albeit in a much smaller range and on about half the volume of yesterday. Gold opened around $1310 and crept up a few dollars over the first hour trade. Some early selling from Japanese banks and corporates quickly put a stop to that however and the spot price slid back lower to $1307.70 where it stabilised on the back of some Ecomex buying. The market held steady from there leading into the SGE open, with good two way interest seen through Dec gold considering the time of day. Shanghai were modest buyers on the open which helped spot gold tick back through $1310 and back up to the earlier highs. Decent two way interest just above $1310 persisted into the afternoon with the price action and volume subsiding as we moved further into the afternoon. Silver followed gold almost tick for tick throughout the day, platinum tested towards $1000 again but couldn't break through and palladium remained flat. In other markets equities were generally higher - at time of writing Nikkei +0.7%, Hang Seng +0.75%, while the Shanghai Composite and ASX200 were flat. The major currencies were fairly quiet vs the USD, with the exception of the AUD which is currently up +35 pips (+0.4%) on the day at 0.7985 following better than expected building approvals. Ahead on the data calendar today look out for Euro Zone consumer confidence, German CPI and U.S ADP employment, Personal consumption and GDP figures. All the best.

Some Bloomberg headlines just doing the rounds now: "North Korean Leader Kim Jong Unsaid the test-firing of a missile over Japan on Tuesday was a 'meaningful prelude' to containing the American territory of Guam, adding he will continue to watch the response of the U.S. before deciding on further action. Markets little to no reaction so far.

 

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

DAILY REPORT : Thursday 24 Aug 2017

MARKETS/MACRO: US President Trump caused a mild risk-off move in markets overnight with his comment that he would shut down the government, if necessary, to secure funding for his signature project - the border wall with Mexico. This is seen as further imperilling Trump’s policy agenda, as well as increasing concern around the more important question of raising the debt ceiling. At his rally, Trump also threw in the comment that the US would 'probably' terminate the North American Free Trade Agreement (NAFTA) 'at some point'. The uncertainty caused U.S equity markets to sag after the previous days ~1.0% run higher. The Dow Jones Industrial Average fell -87.80 points, or -0.40%, to 21,812.09, the S&P500 sold off -8.47 points, or -0.35%, to 2,444.04 and the NASDAQ slumped -19.072 points, or -0.30%, to 6,278.406. The best performing sector were the safe-haven REITs (+1.07%) and the worst performing sector was Industrials (-0.90%). European stocks slumped with investors assessing fresh data on the health of the Eurozone economy and counted down to a key meeting of central bankers at Jackson Hole. The EuroFirst 300 Index declined -7.47 points, or -0.51% to 1,469.13 and the Euro Stoxx 600 index dipped -1.88 points, or -0.50% to 373.92. Regionally the DAX slid -0.45%, the FTSE100 was pretty much flat +0.01% and the CAC40 shrugged off -0.32%. Crude oil prices rose (SEP WTI Crude +$0.56, +1.17%, to US$48.39) after EIA data revealed another big draw down in inventories. Crude oil stockpiles fell -3.33 million barrels to 463.2 million barrels last week according to the body and are now at their lowest level since January 2016. More importantly, gasoline inventories declined -1.22 million barrels to 229.9 million barrels. Choppy price action in FX overnight as the dollar retraced most of yesterday’s gains. USD/JPY remained under pressure with overall volumes light on the day and EURUSD gained support from the firmer than expected regional and group PMI's. There was a fairly aggressive rally in treasuries led by the 10y's as Trump's comments sparked a risk-off move. The US 10y yield decreased -4.36bps to 2.1695% and the 2y yield fell -1.65bps to 1.3051%.

On the data front purchases of newly built single-family homes, a narrow slice of all U.S. home sales, decreased -9.4% (0% expected) to a seasonally adjusted annual rate of 571,000 in July. Overall, the housing market has settled into a pattern of rising prices and flattening sales throughout much of the peak home-buying season. A lack of new-home construction is also dampening both new and existing home sales activity, despite a strong economy. Still in the U.S, Markit said that its flash services PMI rose to 56.9 in August (55.0 expected), from 54.7 a month earlier, marking a 28 month high. On the flip-side however, manufacturing purchasing managers’ index (PMI) dropped to 52.5 in August (53.5 expected) from the prior month’s final reading of 53.3. The composite PMI rose to 56.0 in August from the previous month’s reading of 54.6. Across the pond, the Eurozone economy kept up its growth momentum in August with a strong rise in manufacturing activity offsetting a slowdown in services. The Markit flash manufacturing PMI came in at 57.4, up from 56.5 the previous month and compared with expectations for 56.4. For services, the preliminary PMI was at 54.9 vs 55.4 in July.

PRECIOUS: Gold moved higher overnight in line with the general risk-off move brought about by Trump's comments regarding the U.S debt ceiling and the Mexican Wall. In the lead up, the market was generally fairly quiet into the Shanghai open, with a noticeable lack of liquidity given that HK had been struck by a signal 10 typhoon which had forced most businesses to close. After opening around $1285, there was some light selling in line with a rising USDJPY, which prompted the yellow metal to re-test the overnight lows toward $1283. There were some good bids on Ecomex at that level however which supported the market into the SGE open. Some light buying from Chinese traders helped the spot tick higher a few dollars to return towards the opening levels ($1285). Shortly after, the Trump comments began to hit the wires, speaking in a campaign style rally in Phoenix. He mentioned that they would build the wall even if the government shuts down, he also hinted that the North American Free Trade Agreement could be in jeopardy in the future. The USDJPY immediately sold off some 35 pips and gold got a kick higher towards $1288. The SGE premium also lurched higher to $6-7 over the spot price which drew out some light buying on the exchange. Gold continued to angle higher into the European and NY days as yields and the USD continued to unwind gains from the previous day. The yellow metal touched a peak of $1291.60 early in the U.S day but was met with some liquidation from macro names which capped the price and ultimately took us back below $1290. It was a strong close though, finishing the session back around $1290. Silver and platinum tracked the moves in the dollar fairly closely, both ending the day firmer, silver closing above $17.00 and platinum trying through $980 but closing just beneath.

In the physical space, trade statistics revealed Switzerland was a net importer of gold in July, reflecting subdued global physical demand. Direct shipments from Switzerland to China last month were less than half the volume in June at 18 tons, while in HK the monthly comparison was even more dramatic, down around ~-70% to 15 tons. Shipments into India were down ~-23% on a monthly basis but YoY we are up ~+30%.

In Asia this morning there was a little bit of liquidation seen from retail names in gold and silver which saw both metals ease off their respective opening prices in the early hours. Gold continues to generally trade heavily in Asia towards the top end of the recent range, with good liquidation seen out of both Tokyo and China on rallies into the $1290-1300 zone. This was evident again today once the major futures markets opened for business, TOCOM and the SGE both net sellers. On the SGE the premium was off slightly compared to yesterday sitting at $5-6 over the loco London price for onshore traders. Following the SGE open gold hovered quietly around $1288 throughout the afternoon, ticking over with decent volume traded through Ecomex. Headlines from Jackson Hole (Aug 24-26) should be monitored closely over the coming days, with the various outcomes likely to heavily influence the short-mid term price action in the metals. Gold is at a bit of a crossroads as a sustained move through $1300 will likely draw out models and momentum traders, and see more long term macro players look to play from the long side. A move through $1270-75 on the other hand, will undermine the renewed positive sentiment to gold and silver and we feel that there are a number of weak longs that will look to exit around those levels. Either way, we think the next few days will be pivotal to ascertaining the next directional play.

 

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 18 Aug 2017

MACRO: A van has ploughed into a crowd in the Spanish city of Barcelona, it has been reported there are at least 16 fatalities and dozens more injured. At this stage two men have been arrested and there are reports of another found dead. The Spanish Prime Minister Mariano Rajoy has denounced the incident as a "jihadist attack". In the US, the fallout continues over President Trump's comments regarding the white supremacist violence in Charlottesville on the weekend. Earlier this week Trump was forced to disband both the Manufacturing Council and the Strategy & Policy Forum after several CEOs pulled out. It was reported overnight that Gary Cohn may resign as director of the National Economic Council because of Trump's remarks. Cohn is seen as a business friendly advisor to the President, and talk of his potential resignation has called into question the Administration's future ability to pass any of his proposed pro-business legislation including tax reform. US equities were hammered on the news, the three major bourses all posted daily declines in excess of 1%. The Dow lost 274.14 points, or 1.24%, to 21,750.73, the S&P 500 tumbled 38.10 points, or 1.54%, to 2,430.01, and the Nasdaq dumped 123.19 points, or 1.94%. to 6,221.915. There were no winning sectors in the stock market, as tech (-1.94%), financials (-1.74%) and industrials (-1.71%) lead a broad decline. European shares lost ground in the wake of the attack in Spain and the weaker euro, the EuroSTOXX fell 2.22 points, or 0.59%, to 376.87, the German DAX shed 60.40 or 0.49%, to 12,203.46, the London FTSE 100 declined 45.16, or 0.61%, to 7,387.87. In the currency markets, the US dollar index added 0.56% to 94.003, the EUR traded down to 1.1680, while USD/JPY traded up to 110.24. US treasury yields were lower, the 2 year yield slipped 3.3 bps to 1.30%, the 10-year yield fell 4.9 bps to 2.18%. In commodities news, oil markets were higher as signs emerge crude markets are gradually tightening, Brent firmed 0.9% to $50.86 while WTI rose 0.3% to $46.99. Base metals were broadly lower, with zinc (-2.2%) the biggest loser. In US economic data, industrial production rose 0.2% in July following a 0.4% increase in June. Production in utilities jumped 1.6%, mining output added 0.5%, while manufacturing output declined 0.1% largely stemming from a retreat in auto production of 3.5%. Manufacturing sector capacity fell by 0.1% to 75.4% in June, 3 percentage points below the historical average. The Philly Fed manufacturing index fell to 18.9 in August from 19.5 in July, although a positive reading still indicates activity growth in the region. The Conference Board's leading economic index rose 0.3% in July following a 0.6% jump in June, signalling the potential for faster growth in the back half of this year. Initial jobless claims fell by 12k to a seasonally adjusted 232k in the week ending August 12, the second lowest level since the current period of economic expansion began in 2009. Continuing jobless claims fell by 3M to 1.95M. In Asia today, as I write the Nikkei sits at -1.18%, the Shanghai composite is at -0.05%, the Hang Seng at -0.54%, and the ASX S&P 200 closed at -0.56%. Tonight we have University of Michigan Consumer Sentiment and Advance Services data out of the US; Construction Output and Current Account data out of the Eurozone; and PPI out of Germany.

PRECIOUS: A range-bound but slightly choppy session for the precious as gold consolidates above $1280. Gold tested $1290 in early Asian hours as USD/JPY dipped below 110, however an excess in supply capped the market here with the SGE premium at $3. The yellow metal softened through London's AM session as the greenback firmed sharply against the EUR. Whippy trading through NY hours for the yellow metal as investors took in the Trump news and the Barcelona attack, the market printed the days low of $1282 but ultimately finished around the high at $1287. It was a subdued day for silver, the grey metal drifted steadily down to finish at $16.99. In the PGM's either, platinum finished slightly lower at $972 while palladium good fortunes continued, posting a fresh 16 year high of $927. The Philadelphia gold and silver index lost 0.33%. The SPDR gold trust was unchanged at 795.44 metric tons. In todays trading, gold drifted lower through the AM as the $1-2 SGE premium prompted more selling out of China, though ultimately we are trading sideways. Generally, the current macro-economic conditions are supportive for gold, however the market is waiting for the catalyst to mount a serious test of the $1300 resistance. The yellow metal is at $1287.60 as I write. Silver dipped below the psychological $17 level but has recovered as the day progresses, the grey metal is at $17.02 as I write. Palladium was lower off the open but rebounded up toward last nights highs, while platinum is edging higher at $977.

 

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 29 Aug 2017

MACRO: The Commerce Department reported on Monday that the U.S. trade deficit increased during July to USD $65.1 billion (exp: $64.5 billion), a 1.7% increase from USD $64.0 billion during June. A -1.3% fall to exports was the main drag on the headline figure, as exports of motor vehicles sunk -8%. Wholesale inventories pushed higher during July, increasing +0.4% MoM (exp: +0.3%) to follow a +0.6% gain during June. Equity markets in the U.S. ended trade on Monday little changed, with investor's cautious as the full impact of hurricane Harvey becomes evident. The DJIA eased just -0.02% lower to 21,808.40 points, while gains to healthcare (+0.60%) and technology (+0.27%) helped to offset weakness across financials (-0.48%) and energy (-0.47%) as the S&P 500 edged +0.05% higher. Treasury yields eased marginally on Monday as a strong auction for 5-year notes supported demand across the board. The 10-year slipped 1.1bps to 2.159%, while the 2-year declined 0.4bps to 1.334%. In currency majors, the euro continued to push higher on Monday, albeit in thin trade as London took leave for the summer bank holiday. The common currency edged toward 1.20 against the USD, building upon a +1.3% gain last week to touch a more than two year high. Oil futures traded under pressure on Monday, with expectations that refinery shutdowns in the Gulf of Mexico as a result of hurricane Harvey will result in excess supply. WTI ended trade around -2.7% lower at USD $46.57 per barrel, while Brent crude saw declines tempered to end just under -1% lower at USD $51.89 per barrel. European equity markets suffered against the headwinds of a stronger euro on Monday, seeing the Stoxx Europe 600 -0.48% lower, while the export heavy German Dax declined -0.37%.

PRECIOUS: Bullion kicked of the week on a positive note, finally closing back above USD $1,300 to mark the highest level in 9-months. The yellow metal traded with a modest bid tone throughout Asian / European hours, however it wasn't until New York opened that we saw the metal through USD $1,300. A sharp stop loss run through the figure and recent triple top resistance saw bullion to a USD $1,312.05 session high, pinned toward the high print as large Comex open interest at a strike of USD $1,310 kept the price action buoyant. ETF's continued to increase holdings on Monday, with a further 330k ounces of inflows recorded and this is expected to continue now the metal has broken a number of technical levels on the top-side. Reports that North Korea had fired a missile over Northern Japan hit the wires during the break between Comex sessions (pre-Asia open) on Tuesday, seeing USD/JPY sharply lower (109.26 to 108.34) as stops below 108.60 were triggered. The escalation in geopolitical tensions underpinned early session demand for bullion, as gold ripped higher on the open to trade as high as USD $1,324.50. The yellow metal saw a modest pull back leading into Chinese trade, however demand was once again evident out of the far East to keep the metal buoyant above USD $1,315. Fresh interest out of Europe provided further support late in afternoon trade, driven by a leg higher to EUR/USD, breaking above 1.20 for the first time since early 2015. The threat from North Korea has taken an unprecedented turn today and we expect safe haven demand coupled with a softer greenback to provide the impetus for further gains to bullion over the near term. Support for the metal initially sits around USD $1,308 - $1,310, while top-side targets extend to USD $1,337 (U.S. Presidential Election Day high) and USD $1,350 beyond this. Silver turned higher with gold on Monday to book a +2.22% gain, while the grey metal opened above USD $17.50 on the back of geopolitical concerns during Asian trade today and spent the session consolidating the move higher. Platinum has benefitted from the safe haven demand of the precious complex to sit within striking distance of USD $1,000 today, while palladium has lagged somewhat in recent sessions, however caught a bid late in Asian trade today to test toward USD $950. Data today includes U.K. house prices, French GDP, U.S. house prices and U.S. Conference Board 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 : Wed 23 Aug 2017

MACRO: House prices in the U.S. inched +0.1% MoM higher during June (exp: +0.5%) to see prices +1.6% QoQ higher according to the latest FHFA data. A continued decline in availability saw prices increase +6.6% relative to the same quarter in 2016. U.S. equity markets turned higher on Tuesday amid below average volumes, as investor appetite for technology and healthcare stocks returned. The DJIA jumped +0.90% to 21,899.89 points, booking the largest percentage gain since April 25th as Cisco (+1.92%) and Apple (+1.63%) found support. The S&P 500 saw strength across technology (+1.45%) and materials (+1.20%) lead all components other than real estate (-0.11%) higher, with the bourse ending up +0.99% at 2,452.51 points. The Nasdaq meanwhile snapped a three session losing streak, jumping +1.36% to 6,297.478 points to log the the best single session result since late June. Oil futures pushed modestly higher on Tuesday as investors positioned themselves for an eighth consecutive weekly fall in U.S. domestic crude supplies. WTI increased roughly +0.6% to end around USD $47.65 per barrel, while Brent crude posted a +0.4% return and settled just underneath USD $52 per barrel. The move into stocks saw treasury yields higher on Tuesday, supported in part by reports that the Trump administration had made progress on their tax reforms. The 10-year yield added 3.3bps to around 2.215%, while the two-year popped 2.4bps to 1.326%. Strong performances among resources related stocks underpinned gains to European equities on Tuesday, seeing the Stoxx Europe 600 snap a three session losing streak and end +0.8% higher. The German Dax surged +1.35% even as the latest ZEW survey showed a fall to the expectations index from 17.5 to 10.0, while in the U.K. the FTSE 100 added +0.86% to post its biggest single session percentage gain since mid July as heavyweights BHP (+2.1%) and Antofagasta (+2%) supported the bourse.

PRECIOUS: Gold continued to trade range-bound on Tuesday, however held relatively resilient amid stronger global equity markets and higher UST yields. The majority of Tuesday's price action occurred during late Asian / early European hours, as bullion slipped underneath USD $1,290 on the back of a bid greenback. U.S. hours saw offers cap any further tests toward USD $1,290, while supportive interest underneath USD $1,285 restricted declines. ETF holdings once again increased on Tuesday to add a modest 23k ounces, while in the options space, vols are little changed as 1m sits around 10.6. Asian trade today saw supportive interest underneath USD $1,285 once again restrict declines to bullion, while continued physical interest out of China dragged the yellow metal off the session low as the on-shore premium held toward USD $6 relative to London gold. Once again we are stuck within a narrow trading range and the upcoming Jackson Hole conference is likely keeping investors powder dry for the time being, in addition to the ever present headlines generated out of the Korean peninsula. Pricing continues to remain constructive for a further test of USD $1,300, however should we see corrective moves to the recent bid tone, broad support around USD $1,280 - $1,285 should continue to restrict further declines. Medium-term it is looking like down-side risks to the USD are tempering and we look to the 10-year to hold 2.10% for a push higher for the greenback, potentially weighing upon bullion. Silver continues to oscillate either side of USD $17 and should see top-side moves capped by resistance around USD $17.30, while USD $16.90 continues to broadly support the grey metal. Profit taking in palladium is keeping the metal underneath USD $940 as funds pause for breath following the recent price action, while platinum continues to lose touch with USD $1,000. Data today includes Markit manufacturing / services / composite PMI prints out of France, Germany, the Eurozone and the U.S., while we also see 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 : Thursday 17 Aug 2017

MACRO: The minutes from the July Federal Reserve meeting showed that some committee members are becoming increasingly concerned about the recent soft inflation data, which may temper the pace of future interest rate increases. The central bank's preferred measure of inflation has sunk to 1.5% recently, remaining well below the committee's 2% target for more than five years. The minutes noted that some members believe inflation may remain below the target rate for longer than expected, while several members even indicated that inflation risks may be skewed to the downside. More hawkish members however expressed concern over the risks from a labour market that was sitting at near full employment. With regards to the reduction of the Fed's balance sheet, it was indicated that this process should begin relatively soon, with several members prepared to announce a start date last month. Housing Starts in the U.S. softened unexpectedly during July, falling -4.8% MoM to 1.155 million (exp: +0.4% to 1.22 million), to follow a downwardly revised +7.4% gain during June (prev: +8.3%). Single-family home building dipped -0.5% for the month to 856,000 units, while the volatile multi-family builds collapsed -15.3% to 299,000 units. Building permits sunk -4.1% MoM during July to 1.22 million (exp: -2.0% to 1.25 million) to follow an upwardly revised +9.2% in June (prev: +7.4%). Multi-family permits led the print lower to sink -11.2% MoM, while single-family permits held unchanged.

U.S. equities endured a volatile session on Wednesday, however ultimately ended higher as the DJIA reclaimed the 22,000 point handle. The DJIA navigated a mixture of political turmoil and the Federal Reserve minutes release to book a +0.12% advance, closing at 22,024.87 points for a fourth consecutive win. The S&P 500 saw broad based strength led by materials (+0.92%) to end +0.14% higher at 2,468.11 points, while the tech-laden Nasdaq Composite added +0.19% to 6,345.109 points. Oil prices sunk during U.S. hours on Wednesday following an Energy Information Administration report showing domestic crude production increased by 79,000 barrels per day to 9.502 million barrels per day last week. The figure was the highest level of output since mid July and saw WTI -1.6% lower to around USD $46.80 per barrel, while Brent crude declined -1% to USD $50.30 per barrel. The Greenback pared early session gains in New York on Wednesday following news that the Trump administration had disbanded a pair of business advisory groups, while the dovish Federal Reserve minutes saw the dollar sharply lower into the close. The DXY dollar index declined -0.3% to 93.517 as USD/JPY tested toward 110.00, while the euro recovered from an earlier dip below 117.00 to end around +0.3% higher on the session. U.S. treasury yields were under pressure late in trade following the Federal Reserve minutes release, seeing 10-year yield 4bps lower to 2.224%, while the 2-year eased 2bps to 1.334%.

European markets ended trade on Wednesday higher, supported by a softening euro (pre-FOMC minutes) following a reuters report noting ECB president Mario Draghi is not expected to deliver any new policy messages at the upcoming Jackson Hole conference. The Stoxx Europe 600 jumped +0.68%, supported in part from miners on the back of stronger base metal prices, while the German Dax closed +0.72% higher as the export heavy bourse benefited from a weaker euro. In the U.K. gains to the FTSE 100 (+0.67%) were supported by a softer local currency and strong jobs data. Wages in the U.K. increased +2.1% (exp: +2.0%), jobless claims decreased by -4,200 and the unemployment rate eased to 4.4% from 4.5%.

PRECIOUS: The precious complex saw support from the dovish FOMC minutes on Wednesday, seeing gold recover the previous session declines and end close to +1% higher. Bullion held a narrow range leading into New York hours, testing interest around USD $1,270 as USD/JPY pushed toward 111.00 and treasury yields eased. A sharp reversal in fortunes to the greenback following the FOMC minutes release underpinned a break through USD $1,275, triggering stops to a USD $1,283.70 session high. With regard to vols, we have seen a softening of late to near pre 'fire and fury' levels, with 1m holding a 9 handle, however a touch firmer following the late New York pricing on Wednesday. With regards to fund flows, ETF's added a further 204k ounces overnight and this will need to continue should gold make an attempt at USD $1,300. Asian trade today saw further declines to the USD, seeing USD/JPY below 110.00 and bullion toward USD $1,290 as China opened well bid. Early session interest dissipated somewhat throughout afternoon trade, however we continued to see solid two-way flows into the European open. After failing on multiple occasions, USD $1,296 and USD $1,300 are again within sight and loom as major resistance levels for the yellow metal. Silver posted a staggering +2.9% gain on Wednesday, diverging with gold to turn high pre-FOMC minutes, while the grey metal made light work of USD $17 following the minutes release to importantly close above the figure. Again we look toward the recent resistance level of USD $17.23 (200 DMA) to open up a further leg higher, while another failure here and focus turns to the USD $17 pivot point. Palladium was just shaded by silver on Wednesday as the sessions standout, surging through USD $900 and continuing the bid tone during Asian trade today. The white metal touched USD $929 late in Asian trade on Thursday, testing the June high, however unable to break above this level and easing into the European open. Data releases today include U.K. Retail Sales, Eurozone CPI, U.S. Initial Jobless Claims, U.S. Industrial Production, U.S. Bloomberg Consumer Confidence and the U.S. Leading Index.

 

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

DAILY REPORT : Monday 28 Aug 2017

MACRO: Janet Yellen used her speech at Jackson Hole on Friday to defend the regulations put in place following the global financial crisis, at odds with the position taken by President Trump. Yellen noted that the reforms put in place by the Obama administration have 'strengthened our financial system,' and made it 'substantially safer'. European Central Bank President Mario Draghi provided little clues as to the banks' tapering strategy during his speech at Jackson Hole, instead focusing on global productivity. Durable goods orders in the U.S. slumped -6.8% MoM during July (exp: -6.0%) to follow a +6.4% gain the month prior. The print was the largest fall in three years and predominately a result of a sharp decline to the volatile aircraft category as Boeing reported 22 new orders in July versus 184 in June. In more positive news, excluding transportation durable goods added +0.5% MoM (exp: +0.4%) to mark the third consecutive monthly gain, while shipments of core capital goods, the category that is used in the calculation of GDP, increased +1.0% (exp: +0.2%) from an upwardly revised +0.6% gain during June (prev: +0.1%). Equity markets in the U.S. ended generally higher on Friday, eking out modest gains as Janet Yellen and Mario Draghi did little to entice investor's. The DJIA ended the session +0.14% higher at 21,813.67 points to hang onto a +0.6% weekly gain, while the S&P 500 gained +0.17% to end the session at 2,443.05 points, a weekly result of +0.7%. Stocks in Europe closed marginally lower on Friday in mixed trade, weighed down by a stronger Euro as the common currency touched the highest level versus the greenback since January 2015. The Stoxx Europe 600 eased -0.12% as commodity related stocks turned bid to restrict further declines, while the German Dax slipped -0.11% as the IFO business climate index eased to 115.9 (exp: 115.5) from 116.0 previously. In the U.K. a stronger pound weighed upon equities on Friday, seeing the FTSE 100 -0.08% lower, however the bourse was able to hold a +1.1% weekly gain.

PRECIOUS: Bullion generally tracked higher on Friday against a softer greenback, however the yellow metal did have to endure a brief period of extreme volatility during early New York hours, as just under 2 million ounces of Dec futures traded hands underneath USD $1,280 spot in under a minute. Gold held range-bound leading into U.S. trade, as participants were happy to exchange the metal above USD $1,285 while awaiting any potential headlines out of Jackson Hole. Dovish comments from Dallas Fed President Robert Kaplan buoyed the yellow metal during early New York flows, adding around USD $8 to a session high of USD $1,295.70. The bid tone was however short lived, as bullion collapsed USD $17 to a USD $1276.50 session low as 1.8 million ounces passed through Comex in under one minute. Yellen's comments soon after the volatility provided little in the way of clues as to the Fed's interest rate path or balance sheet reduction, and as such gold clawed back the early session declines to once again trade above USD $1,290 and end the session +0.35% higher. The latest CFTC data showed spec positioning once again lengthened during the week to August 22, with longs increasing and shorts bailing. Silver positing meanwhile increased on the back of shorts exiting, while longs were generally unchanged. Asia kicked off the week with a modest bid tone across the precious complex, seeing gold higher in early flows on the back of a softer USD, while further Chinese interest pushed the on-shore premium toward USD $8 relative to London gold. The metal spent the majority of trade unable to break through offers around USD $1,295, requiring interest out of Europe to finally break through the figure and take out Friday's New York high print. There are sill underlying geopolitical concerns as North Korea continued to test short range ballistic missiles over the weekend, while the potential for a U.S. Government shutdown should underpin bullion leading into this Friday's U.S. jobs data. The metal is well positioned for a further test of USD $1,300 following the recent failed attempt, however we are seeing stacked offers around the figure. With regards to support, interest around USD $1,290 has held well during Asian trade today and late New York on Friday, while below this there is broad interest around USD $1,285 - $1,280. Data releases today include U.S. wholesale inventories and the Dallas Fed manufacturing activity index.

 

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

DAILY REPORT : Tuesday 22 Aug 2017

MACRO: In a light news session, the Chicago Fed national activity index unexpectedly declined during July to -0.01 (exp: +0.10) from an upwardly revised +0.16 (prev: +0.13). Equities in the U.S. ended trade on Monday generally higher in thin conditions, however the Nasdaq composite (-0.05%) was unable to follow the broader market into positive territory. Late session gains helped the DJIA snap a two session losing streak and add +0.13% to 21,703.75 points, while the S&P 500 saw broad based support as real estate (+1.07%) and telecoms (+0.70%) led eight of eleven sectors higher to see the bourse to a +0.12% gain. Oil futures retreated during U.S. hours on Monday, with WTI reversing Friday's gains in their entirety as the OPEC technical Committee meeting scheduled to discuss compliance provided little stimuli. WTI collapsed close to -2.5% and test USD $47 per barrel before settling around $47.40 per barrel, while Brent crude tanked -2% to end around USD $51.65 per barrel. U.S. treasury yields eased marginally on Monday as investors turned focus to the upcoming Jackson Hole central bank conference. The 10-year dipped around 1.2bps to 2.18%, while the two-year yield pulled back 0.4bps to 1.305%. European equities posted declines on Monday as participants considered the recent terrorist activity in the region and heightened tensions on the Korean peninsula. The Stoxx Europe 600 ended the session -0.40% lower to book a third consecutive session decline, however did see some support from shipping heavyweight Maersk (+2.89%), while the German Dax closed -0.82% down as the euro pegged back ground. In the U.K., the FTSE 100 eased just -0.07% as gains to the big miners helped to temper declines amid a risk-off tone courtesy of geopolitical rumblings.

PRECIOUS: Bullion saw solid interest toward USD $1,280 on Monday, turning higher following Friday's late session weakness to once again test resistance around USD $1,296. Gold saw a gradual ascent throughout Monday's session, with Chinese interest initially responsible for the early positive price action, while a leg lower to the greenback leading into U.S. hours provided further support and saw the session high of USD $1,294.35 printed. Gold holdings once again inched higher on Monday, while notably over the course of last week GLD added 12 tonnes to mark the first weekly gain since June. Asian trade today saw gains to the USD weigh upon the precious complex following an early push higher, with USD/JPY reversing course to break back above 109.00. The yellow metal went searching for bids below USD $1,290 on the Shanghai open, however interestingly the Shanghai premium pushed higher toward USD $6 over loco London with a higher level of physical demand evident. The yellow continues to receive support on the back of ongoing geopolitical concerns, while recent gains to base metals and uncertainty surrounding the upcoming Jackson Hole conference underpins the bid tone. Pricing continues to remain constructive for a further test of USD $1,300, with participants sensitive to headlines out of the Korean peninsula as the U.S. and South Korean military undertake joint exercises for the remainder of August. Should we see corrective moves to the recent push toward USD $1,300, broad support around USD $1,280 - $1,285 should restrict further declines. With regards to the white metals, palladium continued to push higher on Monday in-line with the general bid tone across base metals and saw further interest during Asian hours today following the recent break of the June high. Data releases today include German ZEW survey results, U.S. house prices and the Richmond Fed manufacturing index.

 

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

DAILY REPORT : Wed 16 Aug 2017

MARKETS/MACRO: The USD jumped, equities were narrowly mixed and bond yields moved higher in response to stronger-than-expected US July retail sales data (with positive backward revisions too). Other US and European data were also supportive. U.S. stocks were mixed Tuesday as investors scaled back buying after two straight sessions of advances and abatement of tensions between the U.S. and North Korea. The Dow gained +5.28 points, or +0.02%, to 21,998.99, the S&P500 dipped -1.23 points, or -0.05%, to 2,464.61 and the NASDAQ inched down -7.219 points, or -0.11%, to 6,333.013. The best performing sector was utilities (+0.50%), while telco's bought up the rear (-1.0%). European stock indices were encouraged by North Korea's decision to revoke their threat of attack on Guam late in the Asia day (early Europe morning). The FTSE Euro First 300 Index pushed up +1.36 points, or +0.09% to 1,478.98 and the Euro Stoxx 600 added a similar +0.34 of a point (+0.09%) to close at 376.50. Regionally the FTSE100 inclined +0.41%, DAX +0.1% and CAC40 +0.36%. Crude oil reversed early losses to end the day unchanged at $47.61 a barrel (Sep WTI), as investors looked to another large draw-down in inventories in the U.S. Prices were under pressure early after an EIA report forecast US shale oil production would hit a record high in coming months. In particular, it forecast output from the Permian basin would climb another 64,000 b/d to 2.6 million b/d in September. However, increasing optimism about another fall in U.S stockpiles pushed prices higher. Treasuries again sold off today as equity strength, corporate issuance, and strong data were today’s main drivers. The US 10y yield increased +5.26bps to 2.2711% and the 2y yield rose +2.83bps to 1.3465%.

The data out of the U.S. was positive on Tuesday. U.S July retail sales were much stronger than expected, with 10 of the 13 categories growing. The headline figure for July jumped +0.6% (+0.3% expected), the largest gain since December 2016 with June's retail sales also being revised to show a +0.3% gain (-0.2% previously). The July reading was lifted by a +1.2% jump in motor vehicle sales, the biggest rise since December 2016. Other notable increases were a +1.2% increase in receipts at building material stores and online retail sales vaulted +1.3% last month, the largest gain since December. U.S. business inventories recorded their biggest increase in seven months in June as retailers accumulated stock at a brisk pace amid signs of an uptick in domestic demand. The Commerce Department reported business inventories rose +0.5% (+0.4% expected) after a +0.3% increase in May. The New York Fed revealed its Empire State general business conditions index climbed +15.4 points to 25.2 in August (10.0 expected), the highest level in nearly three years. Manufacturers in the region reported a jump in new orders and said they were taking longer to deliver goods. Still in the U.S Sentiment among American home builders unexpectedly increased to a 3 month high as builders saw greater prospects for industry demand despite elevated material costs and shortages of labour and lots. The NAHB Housing Market Index rose from 64 to 68 (64 expected) in August.

PRECIOUS: With geopolitical tensions easing between North Korea and the U.S. Tuesday combined with strong U.S. data and a rising dollar, position unwinding in gold from a number of sources continued to drive the metal below $1280. The market was sold off aggressively during the Asian session on the break of $1280 in Dec gold, the spot price sharply dropping from $1278.50 down toward $1272.50 as fast money stops were tripped right on the SGE open. There was little in the way of support from Chinese traders on the day due to a decent bounce seen in USDCNY, which also has dragged the premium on the exchange down towards $5. USDJPY also traded strongly throughout the session which kept the pressure on the metal, gold managing to recover a few dollars but remain locked between $1275-77. There was a fresh round of selling on the SGE reopen but the metal managed to hold a range of $1273-76 into the NY open. Immediately following the strong retail sales release USDJPY moved up to 110.85 and the 10y yield jumped to 2.28%, forcing further liquidation for the gold down to the daily low of $1268.10. XAUUSD looked vulnerable at these levels testing support at $1268, although the fast money liquidation did dry up. Gold spent the remainder of the session clawing its way back toward $1275, closing at $1272. We suspect a reasonable amount of short term length has been relinquished over the past 24 hours, which given the general improvement in mid-term sentiment, may bode well for a test of $1300 in the near term. Interesting to note that both the USDJPY and U.S. 10y have now returned to their pre 'Fire and Fury' comment levels, while gold sits above these to the tune of about $15-20.

It was a more subdued day in Asia today, with the spec liquidation seemingly cooled for the time being. The gold maintained a fairly stable $1271.50-1274.00 range throughout the day with limited volumes changing hands on Ecomex. We opened around $1272 and there was some very light buying seen from retail names initially which took us a dollar or so higher. Japanese traders were very quiet some light buying if anything seen from them, while the SGE remained largely neutral, maybe still slightly biased to the sell side given the higher USDCNY. The premium on the exchange continues to waver, trading down from $5 yesterday to between $4.00-5.50 today with the volume edging lower throughout the am session. Silver too was quiet today, trading sideways in line with gold after yesterday's sell-off. The white metal fell substantially yesterday trading from $17.07 down to $16.64 (-2.5%) by the close of NY after taking out the $17.00 barrier just last Thursday. This was in the face of a number bullion bank analysts commenting over the past week 'now is the time to go long'. Again the white metal proves that it is a volatile beast. Palladium after some extreme volatility overnight, held fairly steady today around the $890 mark with modest volumes trading on Ecomex and Tocom. In other markets equities are mixed, currently the Nikkei is trading -0.05%, Shanghai Composite -0.35%, Hang Seng +0.6% and ASX200 +0.25%. The USD is flat vs. the majors with the exception of the AUDUSD which is currently up +0.2% to 0.7835 following some leveraged demand. WTI Crude (Sep) is currently up +$0.08 (+0.15%) at $47.78 a barrel. Ahead on the data calendar today look out for UK employment data, Euro Zone GDP and U.S. FOMC meeting minutes, housing starts and building permits.

 

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.