Morning Gold & Silver Market Report – 7/11/2013

BERNANKE: FED SHOULD BE MORE ACCOMMODATIVE

Precious Metals prices jumped Wednesday afternoon and have continued to climb today, with Gold nearing $1,300 and Silver jumping above the $20 barrier. After the release of the minutes from June’s Federal Open Market Committee meeting, U.S. Federal Reserve chairman Ben Bernanke spoke and revealed that the Fed should be more accommodative, which boosted the safe haven appeal of Gold. Analysts at Commerzbank wrote, “We presume that the strong reaction of the Precious Metal markets is also related to the fact that  investors believe that the Fed’s actions and attitude do not differ  significantly from those” of the highly accommodative European Central Bank or Bank of Japan. “This is likely to prompt investors to increasingly seek a ‘safe haven’ and a currency that is independent of the central banks, thus again luring in buyers of Gold.”

The minutes outlined clearly what the committee believed Bernanke should convey regarding tapering the quantitative easing program, and a key element was reminding the public that “decisions about asset purchases and other policy tools  would continue to be dependent on the Committee's ongoing assessment of the economic outlook.” With Wednesday’s announcement that the Fed should continue with low interest rates, it appears the economic data released since the June meeting didn’t meet the committee’s expectations.

At 9 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,287.20, Up $37.30.
• Silver, $20.17, Up $0.91.

Closing Gold & Silver Market Report – 7/10/2013

FED MINUTES SUGGEST FISCAL POLICY WILL CONTINUE

The minutes from the Federal Reserve’s June meeting affirmed many investors’ presumptions that officials prefer to see an improvement in the job market before tapering fiscal policy. “The Gold market is pleasantly surprised, and is rallying on the minutes,” Tom Power, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said. “The unemployment number is the key number that the Fed is watching, and with that still above 7.5 percent, investors think that easing is here to stay for some time.” Gold increased by 0.3 percent after the minutes were released, extending its gains to a third consecutive day.

Once the minutes of the Fed’s June meeting were released, there was a noticeable drop in U.S. stocks, government bonds and the dollar. The market is reacting to the mixed responses from state representatives that strongly believe the Federal Reserve is moving too quickly with cutting back on its bond buying program. “The market is moving away from its concerns about tapering  and toward about the timing when [the Fed] will normalize interest rates and who will replace Bernanke,” Robbert Van Batenburg, director of market strategy at Newedge USA LLC in New York, said.

At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,264.10, Up $15.70.
• Silver, $19.53, Up $0.30.

Morning Gold & Silver Market Report – 7/10/2013

FED MINUTES TO SHED MORE LIGHT ON QE TIMING

Precious Metals prices are on the rise this morning as  investors await minutes from June’s Federal Open Market Committee meeting, scheduled for release at 2 p.m. (ET). Some analysts believe that the market has already “built-in” expectations that the Fed will begin tapering its quantitative easing (QE) program in September, so clues that tapering will begin in December or later could be bullish for the metal in the short term. Standard Bank analyst Marc Ground said, “I think there should not be anything that will surprise the market from the minutes, we should pretty much already know what is in them.”

U.S. stock futures are  lower in anticipation of the Fed minutes, and Peter Cardillo of Rockwell Global Capital said, “If the minutes basically suggest the economy is mulling along continuing to slow at modest pace and that might put off the time limit in terms of trimming [the QE program], which is what the markets would like to see ... we’ll be at new highs for the S& P over the next day or two. That suggests the Fed may not be in such a hurry that markets have been anticipating. The bond market obviously has discounted that ... it’s a bit of a positive for equities, not a negative.”

At 9 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,256.10, Up $7.70.
• Silver, $19.35, Up $0.13.

Gold Near Term Objective Zone is 1295-1319

4Hour

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: “Gold’s rally from the June low is impulsive and the decline from 1267 is corrective. That information is reason enough to be bullish for a move above 1267. A move through the high opens up 1295 (2 equal legs from the low) and 1319 (161.8%). Friday’s  FX Technical weekly  provides additional details.” 1223 is now support.

Commodity Trading Strategy: Triggered long last week at 1215…stop moved up to 1208.

LEVELS: 1180 1208 1223 1267 1295 1319

Closing Gold & Silver Market Report – 7/9/2013

STOCKS STILL RIDING HIGH, GOLD UP FOR SECOND DAY

U.S. stocks climbed on Tuesday, specifically the S& P 500.  The S& P was within one percent of closing at it’s all time high as Wall Street seemed to be embracing a stronger economy, including higher interest rates.    JJ Kinahan, chief strategist with TD Ameritrade said, “The market is voting itself that things are improving, with interest rates going higher without taking the stock market down.”  He continued on to say that we need to test at least the 1,650 level or higher with the S& P, a level breached three weeks ago.  Other indexes are up today, the Dow is up for the fourth session in a row.

The Gold price extended its positive numbers into a second day rising the most in sevens sessions after breaking through a key technical level.  China’s inflation data boosted the Precious Metal’s appeal as a hedge against inflation for the world’s second largest consumer of Gold.  Analysts have said that rising Chinese inflation should hamper significant easing responses as we continue to see this enhanced demand for Chinese Gold.

At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,251.60, Up $14.20.
• Silver, $19.31, Up $0.19.

Morning Gold & Silver Market Report – 7/9/2013

• Gold, $1,253.00, Up $15.60.
• Silver, $19.31, Up $0.19.

Gold May Face Test at 1243

Hourly

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis:  Gold’s rally from the June low is impulsive and the decline from 1267 is corrective. That information is reason enough to be bullish for a move above 1267. 1243 is interim resistance. A move through the high opens up 1295 (2 equal legs from the low) and 1319 (161.8%). Friday’s  FX Technical weekly  provides additional details.

Commodity Trading Strategy: Triggered long last week at 1215…stop moved up to 1208.

LEVELS: 1180 1208 1223 1243 1267 1295

Closing Gold & Silver Market Report – 7/8/2013

FED TAPERING EXPECTED IN SEPTEMBER STRIKES IN SOUTH AFRICA MAY AFFECT PLATINUM

Gold felt the pressure last Friday after the Bureau of Labor Statistics reported a better-than expected nonfarm payrolls increase for June. Once the report was released, speculation began quickly on when the Federal Reserve might taper fiscal policy. “The unemployment rate remained at 7.6 percent, and our  economists maintain their 'Septaper' view that the Fed will begin to reduce the pace of its asset purchases at the September meeting,” Barclays wrote in a research note on Monday. Barclays noted that physical demand may have slowed due to a seasonal break with analysts expecting an increase toward the fall season for the Asian Markets.

The price and supply of Platinum is now a major concern for investors with confirmation that two Anglo American Platinum mines are on strike in South Africa. The strikes are due to the mining industry’s wage negotiation period, which is a critical time for this line of business. “If this strike results in a significant loss of production, it's going to help support the price  [of Platinum],” Robin Bhar at Societe Generale told CNBC. “The ongoing industrial unrest across South Africa is already having an impact on Platinum prices – and the situation is not going to get better soon.”

At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,238.20, Up $23.00.
• Silver, $19.13, Up $0.30.

Morning Gold & Silver Market Report – 7/8/2013

EARNING SEASON BEGINS STOCKS, GOLD UP

It’s the unofficial start to the second quarter earnings season, and futures are pointing positive. Earning seasons are the months following the end of a quarter January, April, July, and October. Aside from the regular slew of financial news this week, including the release of the minutes from the Federal Open Market Committee meeting from June, investors will begin looking toward second-quarter earnings. Many companies have already brought down their growth forecasts, including financial firms which are expected to set the tone this quarter.  Dan Greenhaus, chief global strategist at BTIG, said, “This would be the second consecutive quarter of unimpressive earnings growth, which is rubbing many clients the wrong way.” Companies to watch this week are Alcoa today and JP Morgan and Wells Fargo on Friday.

The Gold price is moving higher today as investors find value in the Precious Metal after falling 10 percent since Federal Reserve Chairman Ben Bernanke announced the Federal Reserve would start tapering the bond buying program that has propped up the Gold price.  Peter Fertig of Quantative Commodity Reaserch  has a different view when he said, “We had a good [nonfarm payrolls] number on Friday but the unemployment rate remains unchanged at 7.6 percent and it is not a done deal that the Fed will start tapering its bond-buying in September.” Potential gains of the Precious Metal have been held in check by a rising U.S. dollar.

At 9 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,231.50, Up $16.30.
• Silver, $19.15, Up $0.32.

Weekly Gold & Silver Market Recap – 7/5/2013

JOBS NUMBERS PUSH DOWN GOLD AT WEEK’S END

This week saw Precious Metals continue their descent as Friday’s non-farm payroll numbers helped lift the stock market and put further pressure on Gold and Silver. Precious Metals  prices fell  today, reacting to a stronger-than-expected jobs report for June. Danske Bank analyst Christin Tuxen said that a stronger jobs report “would suggest that although rates are set to stay at record lows in Europe, that may not be the case in the United States.” The U.S. dollar rose more than one percent against competitors due to weakness in the euro, which also contributed to the losses in metals. The jobs report showed a gain of 195,000 jobs in June, though theunemployment rate was unchanged at 7.6 percent  due to an increase in the labor force of 177,000. The jobs readings from April and May were revised upwards as well. The good economic news has many investors believing that the Federal Reserve’s tapering of its quantitative easing program could indeed be coming soon, putting pressure on the price of Gold.

Prior to the July 4th  holiday, Egyptian upheaval and continued financial woes in Portugal helped give Gold a moderate boost. The  safe haven appeal of Precious Metals temporarily resumed  following political turmoil these regions. “Rising tensions in Egypt and re-emergence of the European crisis, along with the mixed data” combined to underpin Gold prices Wednesday, according to a Precious Metals dealer chief market analyst. As hastening violence erupted in Egypt, austerity difficulties in Portugal re-focused the spotlight on the eurozone as Portuguese debt and frantic stock selloffs highlighted troubles in the region. Domestic investors awaited Friday’s nonfarm payroll data to see if the reports would incite movement in Precious Metals markets that are currently in a tug-of-war with bargain hunting physical buyers and ETF sellers.

ECONOMIC DATA DRIVING STOCKS WEIGHING ON GOLD

Earlier this week, the Gold price was still struggling against a strong U.S. dollar. On Tuesday, Gold gained much of the ground lost last week, but those gains were short lived as money managers used the opportunity to sell out of long positions.  Phillip Streible, senior commodities broker at R.J. O'Brien in Chicago, said, “The dollar index is strengthening quite a bit, equities are strengthening and you're seeing interest rates go up. That seems to be the perfect storm against the metal at the moment.” Investors seemed hesitant to move much before the holiday. The Dow Jones Industrial Average and S& P 500 were both up Tuesday following news that U.S. factory orders improved for May. It appears as though equities markets have made the necessary adjustments, being bolstered by QE to make gains based on positive economic data. As we await corporate earnings reports, set to begin next week, the perception of domestic strength and the validity of economic recovery are expected to be the  factors that future market improvements will hinge upon. A strong reading in today’s jobs numbers was expected to be positive for the dollar and another blow to Gold.

GOLD PRODUCTION COULD SLOW

After a second quarter slide that saw Gold fall more than 23 percent, the yellow metal started July with strong gains. Following the recent decline that sent Gold through many key technical levels, a price jump earlier this week was due to a drove of backfill orders placed by bargain hunting investors. Along with discussion that the U.S. Federal Reserve will begin tapering quantitative easing, the “strengthening of the [U.S. dollar], unwinding of the global carry trade and tame global inflation” according to experts have all amalgamated to drive Precious Metals prices down the last couple months. However, with prices being so low, Gold producers are second guessing the profitability of their endeavors. The world’s largest Gold miner, Barrick Gold Corp., recently postponed the launch of a South American mine by two years.  Experts predict many other producers will suspend production  unless the Gold price can rebound enough to once again make manufacturing lucrative.

At 5:27 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,224.90, Down $29.50.
• Silver, $18.95, Down $0.84.

Mid-Day Gold & Silver Market Report – 7/5/2013

STOCKS HOLD ON TO GAINS GOLD SUFFERS

Stocks have wavered some but are staying positive today on a strong jobs report. Investors can expect continued volatility today with fewer participants in the trading session, which would help even things out. It seems that investors may have decided that the most recent jobs report is not a “Goldilocks” report, a term financial analysts have begun using for reports that are just good enough to point to continued economic recovery, but not so good that the Fed will wind down the QE program too soon.  Quincy Krosby, market strategist for Prudential Financial, said, “It’s obvious that Treasury traders believe this is enough for the Fed to begin to taper.” The consensus is that tapering will happen sometime between September and December.

The news for the Gold price is sounding like a broken record this afternoon. Positive data had the anticipated inverse reaction on the Gold price, pushing the Precious Metal down about three percent today.  Natixis analyst Nic Brown  summarized the current sentiment well when he said, “After the strong U.S. numbers we are approaching the point in which the Fed will start to taper and as a consequence we fully expect that, if the U.S. economy continues to improve, you will see a further strengthening of the dollar, which is negative for the dollar-denominated Gold price."

At 1 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,216.30, Down $37.60.
• Silver, $18.86, Down $0.93.

Morning Gold & Silver Market Report – 7/5/2013

STRONG JOBS REPORT BRINGS DOWN METALS PRICES

Precious Metals  prices fell this morning, reacting to a stronger-than-expected jobs report for June.  Danske Bank analyst Christin Tuxen said that a stronger jobs report “would suggest that although rates are set to stay at record lows in Europe, that may not be the case in the United States.”  The U.S. dollar rose more than one percent against competitors due to weakness in the euro, which also contributed to the losses in metals.

The jobs report showed a gain of 195,000 jobs in June, though theunemployment rate was unchanged at 7.6 percent  due to an increase in the labor force of 177,000.  The jobs readings from April and May were revised upwards as well.  The good economic news has many investors believing that the Federal Reserve’s tapering of its quantitative easing program could indeed be coming soon, putting pressure on the price of Gold.

At 9 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,224.70, Down $29.30.
• Silver, $19.08, Down $0.72.

Gold Deeper Setback Would Present Opportunity

Hourly

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: To review - “I’m looking for a ‘tradeable low’ in  goldbetween 1220 and 1265. 1265 is the June 2010 high. 1250 is the extension from 1523 of the 1523-1796 range. 1220 is the 161.8% extension from 1322 of the 1322-1488 range. 1227 is the November 2009 high. There are clusters of levels at 1155 and 1045/80 as well. It’s been gold’s tendency since September 2012 to ‘crash’ for 2-4 weeks and consolidate for at least a month. This week would be week 2 of this ‘crash’.” The low was 1180 and the rally from that level is impulsive, which makes the low ‘tradeable’. The 2 ‘best’ areas for support are probably the former 4th  wave low at 1225 and the large volume area at 1210.

Commodity Trading Strategy: Order to go long 1215, stop 1180.

LEVELS: 1210 1225 1242 1263 1297 1308

Closing Gold & Silver Market Report – 7/3/2013

GLOBAL CRISES BOOST APPEAL OF GOLD

Gold and Silver are realizing slight gains today as the  safe haven appeal of Precious Metals temporarily resumed  following political turmoil in Portugal and Egypt. “Rising tensions in Egypt and re-emergence of the European crisis, along with the mixed data today” combined to underpin gold prices Wednesday, according to a Precious Metals dealer chief market analyst. As hastening violence erupts in Egypt, austerity difficulties in Portugal have re-focused the spotlight on the eurozone as Portuguese debt and frantic stock selloffs highlight troubles in the region. Domestic investors will await Friday’s nonfarm payroll data to see if the reports can incite movement in Precious Metals markets that are currently in a tug-of-war with bargain hunting physical buyers and ETF sellers. 

Though U.S. stocks were able to overlook international issues and end the trading session higher ahead of the holiday,  some analysts remain leery of a market that has surged to record levels  despite pessimistic technical indicators and daunting concerns regarding the future of quantitative easing (QE). “We're still in this rough period. We have a 10 percent to 20 percent correction ahead of us later this quarter, early next quarter. For two months now I've been a seller of anything above Dow 15,000 and I'll stay that way,” Paul Schatz of Heritage Capital told CNBC. As the bull trend continues for U.S. equities, the tapering of QE could negatively impact stocks that have benefited so greatly from the monthly injections of liquidity.

At 5 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,256.60, Up $2.70.
• Silver, $19.85, Up $0.07.