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OUTSIDE MARKET DEVELOPMENTS: The overnight macro economic news wasn’t that significant, as Euro zone economic readings were only marginally upbeat. The trade also saw some slightly hot UK inflation readings overnight, but the metals trade in general didn’t seem to be that interested in inflationary expectations overnight. However, with the US monthly Non farm payroll report looming ahead, it is clear that precious metals and a long list of physical commodity markets are poised for an important reading on the condition of the US recovery. With a very diverse range of estimates for the US Non farm payroll report today, it would appear that portions of the trade will have to be disappointed with the figures. It could be a little dicey for the bull camp in the precious metals today, as a patently strong reading from the US might foster concerns of a soaring Dollar, or even concerns of rising interest rates ahead. On the other hand, a patently weak US Payroll reading might undermine the Dollar, but the question is will the gold and silver trade embrace a weaker Dollar as a positive or fear a return to deflationary conditions.
GOLD MARKET FUNDAMENTALS: In retrospect, the gold market has seen stories from all over the map this week. On one hand, the gold market saw signs that the Chinese were set to tighten credit conditions, but that potentially negative development was at least partially offset by a series of favorable Chinese retail gold demand stories and what appeared to be a very broad based commodity fund buying wave. The February gold contract sits above the 21 day moving average early this morning, which is located down at $1,113.10 today. As usual the trade will probably look to the direction of the Dollar today for guidance on gold prices. Some traders suggest that gold needs a not too hot and not too cold set of figures today, to come away from the reports with a positive track. However, some gold bulls are suggesting that the gold market is capable of de-linking with the Dollar, but that relationship has remained pretty strong lately. The bear camp is suggesting that the rally off the December lows leaves the gold market a bit vulnerable from a technical perspective today and with February gold contract starting the trading session out today right on the 50 day moving average there does appear to be the prospect for a significant technical decision today.
SILVER MARKET FUNDAMENTALS: The March silver contract in the early trade today sits roughly $1.37 an ounce above the late December lows. As in the gold market, the silver trade would seem to be poised to take a large measure of direction from the Dollar in the wake of the US Non farm payroll report this morning. While the gold market sits right on its 50 day moving average this morning, the March silver contract comes into the action today well above its 50 day moving average. Noted weakness in the copper market over the last 36 hours is probably serving as a slight outside market negative to silver prices today, especially since silver at times this week seemed to be attempting to embrace its industrial standing. While there was a modest decline in silver exchange warehouse stocks overnight, the silver market hasn’t recently given that much credence to classic physical supply side developments. The bull camp is suggesting that silver stands a much better chance of de-linking with the Dollar today than the gold market, as silver managed to outperform gold on a number of occasions earlier in the week.
PLATINUM: The platinum market would seem to be suggesting that the numbers are going to serve to lift prices even further. The bull camp might be right, but they seem to be taking a very big risk. Just a correction to this week’s lows would mean a slide of roughly $100 an ounce in April platinum.
Metals Market Commentary – 2010.01.08
by Dave Hightower on January 8, 2010
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: The overnight macro economic news wasn’t that significant, as Euro zone economic readings were only marginally upbeat. The trade also saw some slightly hot UK inflation readings overnight, but the metals trade in general didn’t seem to be that interested in inflationary expectations overnight. However, with the US monthly Non farm payroll report looming ahead, it is clear that precious metals and a long list of physical commodity markets are poised for an important reading on the condition of the US recovery. With a very diverse range of estimates for the US Non farm payroll report today, it would appear that portions of the trade will have to be disappointed with the figures. It could be a little dicey for the bull camp in the precious metals today, as a patently strong reading from the US might foster concerns of a soaring Dollar, or even concerns of rising interest rates ahead. On the other hand, a patently weak US Payroll reading might undermine the Dollar, but the question is will the gold and silver trade embrace a weaker Dollar as a positive or fear a return to deflationary conditions.
GOLD MARKET FUNDAMENTALS: In retrospect, the gold market has seen stories from all over the map this week. On one hand, the gold market saw signs that the Chinese were set to tighten credit conditions, but that potentially negative development was at least partially offset by a series of favorable Chinese retail gold demand stories and what appeared to be a very broad based commodity fund buying wave. The February gold contract sits above the 21 day moving average early this morning, which is located down at $1,113.10 today. As usual the trade will probably look to the direction of the Dollar today for guidance on gold prices. Some traders suggest that gold needs a not too hot and not too cold set of figures today, to come away from the reports with a positive track. However, some gold bulls are suggesting that the gold market is capable of de-linking with the Dollar, but that relationship has remained pretty strong lately. The bear camp is suggesting that the rally off the December lows leaves the gold market a bit vulnerable from a technical perspective today and with February gold contract starting the trading session out today right on the 50 day moving average there does appear to be the prospect for a significant technical decision today.
SILVER MARKET FUNDAMENTALS: The March silver contract in the early trade today sits roughly $1.37 an ounce above the late December lows. As in the gold market, the silver trade would seem to be poised to take a large measure of direction from the Dollar in the wake of the US Non farm payroll report this morning. While the gold market sits right on its 50 day moving average this morning, the March silver contract comes into the action today well above its 50 day moving average. Noted weakness in the copper market over the last 36 hours is probably serving as a slight outside market negative to silver prices today, especially since silver at times this week seemed to be attempting to embrace its industrial standing. While there was a modest decline in silver exchange warehouse stocks overnight, the silver market hasn’t recently given that much credence to classic physical supply side developments. The bull camp is suggesting that silver stands a much better chance of de-linking with the Dollar today than the gold market, as silver managed to outperform gold on a number of occasions earlier in the week.
PLATINUM: The platinum market would seem to be suggesting that the numbers are going to serve to lift prices even further. The bull camp might be right, but they seem to be taking a very big risk. Just a correction to this week’s lows would mean a slide of roughly $100 an ounce in April platinum.
Tags: Gold, Metals, Platinum, Silver
About Dave Hightower