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OUTSIDE MARKET DEVELOPMENTS: While the overall gain in the US Dollar this morning isn’t that impressive, seeing the Dollar generally hold within close proximity to its recent highs seems to leave the currency impact on precious metals in the bear camp this morning. With global equity markets moderately weaker overnight and the trade seeing some renewed concern from the US financial sector, gold and silver and a host of physical commodities seem to be facing a negative news bias into the early US Wednesday morning trade. The US will present the metals trade with a New York NAPM Business activity Index, a Chicago PMI reading, a K.C. Fed manufacturing Index and mid day auction results of $32 billion in 7 Year Treasury Notes. Given the initial upward tilt in the US Dollar, the presence of anything favorable from the US scheduled report front this morning might serve to lift the Dollar further and in turn undermine gold and silver prices.
GOLD MARKET FUNDAMENTALS: While the Wall Street Journal article on the prospect of rising gold production costs could be seen as a supportive fundamental development for gold prices, this market just doesn’t appear to be that interested in classic fundamental developments. It also seems as if generally supportive Chinese retail gold demand talk is still being generally discounted by the gold trade, especially in the face of a slight rise in the US Dollar. Some traders are suggesting that talk of another bailout payment to GMAC serves to rekindle financial sector concerns again which have generally been seen as a negative to gold prices since the Dubai credit situation initially surfaced around Thanksgiving. With the trade seemingly anticipating something favorable from the Chicago PMI report this morning, the gold trade might be watching the 78.50 level very closely in the Dollar. Some players are suggesting that the failure to hold above the $1,100 level has given the bear camp a technical edge in the early trade today. With equities weaker and the macro economic outlook seemingly sagging today, the bear camp would seem to have more angles in their favor than the bull camp early in the trade today.
SILVER MARKET FUNDAMENTALS: With the slide below the even number $17.00 level overnight and the 50 day moving average seen close-in down at $16.87 today there would appear to be a number of bearish technical themes present in the early trading action. Clearly a weaker US Dollar and negative leadership from gold prices has given the bear camp in silver some added confidence, especially since the equity market action seems to make the outlook for the economy feel even more suspect. While the silver market seemed to have a somewhat less overbought technical condition than gold in the latest COT positioning reports, the bull camp in silver still seems to be without much fundamental headline support into the Wednesday US trade. The bull camp might point to some positive action in copper prices early this morning, as a possible supportive element, but with the equities down moderately and the silver trade potentially facing lower pre-holiday trading activity ahead, it could be difficult to supplant the long list of the outside market negatives.
PLATINUM: After the rather impressive mid month run up in platinum prices and adjustments to the platinum COT positioning, that would seem to leave platinum extremely vulnerable to more downside action ahead. In fact, with internal platinum fundamental changes mostly non existent recently, the platinum market might be dominated by technical or outside market influences. Near term downside targeting in the April platinum contract is seen down at $1,468.
Metals Market Commentary – 2009.12.30
by Dave Hightower on December 30, 2009
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
OUTSIDE MARKET DEVELOPMENTS: While the overall gain in the US Dollar this morning isn’t that impressive, seeing the Dollar generally hold within close proximity to its recent highs seems to leave the currency impact on precious metals in the bear camp this morning. With global equity markets moderately weaker overnight and the trade seeing some renewed concern from the US financial sector, gold and silver and a host of physical commodities seem to be facing a negative news bias into the early US Wednesday morning trade. The US will present the metals trade with a New York NAPM Business activity Index, a Chicago PMI reading, a K.C. Fed manufacturing Index and mid day auction results of $32 billion in 7 Year Treasury Notes. Given the initial upward tilt in the US Dollar, the presence of anything favorable from the US scheduled report front this morning might serve to lift the Dollar further and in turn undermine gold and silver prices.
GOLD MARKET FUNDAMENTALS: While the Wall Street Journal article on the prospect of rising gold production costs could be seen as a supportive fundamental development for gold prices, this market just doesn’t appear to be that interested in classic fundamental developments. It also seems as if generally supportive Chinese retail gold demand talk is still being generally discounted by the gold trade, especially in the face of a slight rise in the US Dollar. Some traders are suggesting that talk of another bailout payment to GMAC serves to rekindle financial sector concerns again which have generally been seen as a negative to gold prices since the Dubai credit situation initially surfaced around Thanksgiving. With the trade seemingly anticipating something favorable from the Chicago PMI report this morning, the gold trade might be watching the 78.50 level very closely in the Dollar. Some players are suggesting that the failure to hold above the $1,100 level has given the bear camp a technical edge in the early trade today. With equities weaker and the macro economic outlook seemingly sagging today, the bear camp would seem to have more angles in their favor than the bull camp early in the trade today.
SILVER MARKET FUNDAMENTALS: With the slide below the even number $17.00 level overnight and the 50 day moving average seen close-in down at $16.87 today there would appear to be a number of bearish technical themes present in the early trading action. Clearly a weaker US Dollar and negative leadership from gold prices has given the bear camp in silver some added confidence, especially since the equity market action seems to make the outlook for the economy feel even more suspect. While the silver market seemed to have a somewhat less overbought technical condition than gold in the latest COT positioning reports, the bull camp in silver still seems to be without much fundamental headline support into the Wednesday US trade. The bull camp might point to some positive action in copper prices early this morning, as a possible supportive element, but with the equities down moderately and the silver trade potentially facing lower pre-holiday trading activity ahead, it could be difficult to supplant the long list of the outside market negatives.
PLATINUM: After the rather impressive mid month run up in platinum prices and adjustments to the platinum COT positioning, that would seem to leave platinum extremely vulnerable to more downside action ahead. In fact, with internal platinum fundamental changes mostly non existent recently, the platinum market might be dominated by technical or outside market influences. Near term downside targeting in the April platinum contract is seen down at $1,468.
Tags: Gold, Metals, Platinum, Silver
About Dave Hightower