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OUTSIDE MARKET DEVELOPMENTS: With the outlook for the Greece situation seemingly improved by the latest austerity program and equity market action generally upbeat over the last 24 hours, that seems to have left physical commodities like the metals markets in favor. Apparently many markets have taken hawkish US Fed dialogue, as a sign that the US economy continues to progress toward recovery, even if scheduled data has failed to register much in the way of recovery progress. Therefore it is possible that many markets might simply discount a series of private jobs reports today. The markets will also see a US ISM Non Manufacturing release later this morning and a Fed Beige Book early this afternoon. However, with the US monthly non farm payroll reading due out on Friday morning and one of the private jobs reports this morning showing an improvement it is possible that the bull camp will lessen their concern toward the Friday numbers. As in the prior trading session, the action in the US equity markets look to be a major influence for gold and silver prices.
GOLD MARKET FUNDAMENTALS: In looking at the magnitude of the gains in gold in the prior trading session, one almost got the impression that “investment interest” was returning. Clearly a weaker Dollar and rising equities gave some credence to the prospect of recovery ahead, but in some cases it almost appeared as if hawkish US Fed dialogue was being interpreted as a development that signals a recovery in the US economy. In the end, seeing a rally in gold prices in the face of hawkish Fed dialogue and also seeing strength in the face of mostly slack US scheduled data has to embolden the bull camp and discourage the bear camp. It does appear as if favorable Indian demand patterns have provided some support to gold prices, but many traders think that gold strength is generally coming from outside or bigger picture elements. At least in the early action today, it would appear that calm in the Greek situation will give the bull’s some added confidence, while the bear camp will attempt to play up the prospect of weak jobs news from the US economy. For most of the last two months, the gold market has acted like a physical commodity market and therefore the tight correlation with equities is likely to continue to impact gold prices.
SILVER MARKET FUNDAMENTALS: The Silver market has managed another new high for the move today and in the process it has managed to rise within close proximity to the 100 day moving average of $17.33. Clearly silver appears to be up beat toward the prospect of global growth, in the wake of an improvement in the Greek situation. It almost seems as if silver and other physical commodity markets have taken overtly hawkish dialogue from the US Fed, as a sign that the US economy “must” be improving. In other words, if the Fed is feeling the need to tighten, they must be seeing signs of progression in the US economy. In the short term, weakness in the Dollar and a lack of concern toward the economy looks to favor the silver bulls, while the bear camp will look to potential weakness in upcoming US jobs figures and further debt problems to stem the current rise in silver prices. The bear camp might also be hopeful that US monthly payroll readings on Friday morning will serve their case better than the economic psychology seen in the first three days of this week. In the end, classic supply and demand news in silver is minimal and seemingly unable to unseat the focus on outside market forces.
PLATINUM: Another new high for the move leaves the bull camp with clear control over platinum prices. A weaker Dollar and a pattern of positive spin on the economic outlook looks to add to the upward momentum in platinum. With the added support from a possible platinum strike in Australia, the platinum market is getting both internal and external fundamental support. Next upside targeting in April platinum is seen at $1,584 and again up at $1,594. While we have a gut concern that economic views are overly optimistic, it probably won’t pay to stand in the way of this market in the coming trading session.
Precious Metals Market – 2010.03.03
by Dave Hightower on March 3, 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: With the outlook for the Greece situation seemingly improved by the latest austerity program and equity market action generally upbeat over the last 24 hours, that seems to have left physical commodities like the metals markets in favor. Apparently many markets have taken hawkish US Fed dialogue, as a sign that the US economy continues to progress toward recovery, even if scheduled data has failed to register much in the way of recovery progress. Therefore it is possible that many markets might simply discount a series of private jobs reports today. The markets will also see a US ISM Non Manufacturing release later this morning and a Fed Beige Book early this afternoon. However, with the US monthly non farm payroll reading due out on Friday morning and one of the private jobs reports this morning showing an improvement it is possible that the bull camp will lessen their concern toward the Friday numbers. As in the prior trading session, the action in the US equity markets look to be a major influence for gold and silver prices.
GOLD MARKET FUNDAMENTALS: In looking at the magnitude of the gains in gold in the prior trading session, one almost got the impression that “investment interest” was returning. Clearly a weaker Dollar and rising equities gave some credence to the prospect of recovery ahead, but in some cases it almost appeared as if hawkish US Fed dialogue was being interpreted as a development that signals a recovery in the US economy. In the end, seeing a rally in gold prices in the face of hawkish Fed dialogue and also seeing strength in the face of mostly slack US scheduled data has to embolden the bull camp and discourage the bear camp. It does appear as if favorable Indian demand patterns have provided some support to gold prices, but many traders think that gold strength is generally coming from outside or bigger picture elements. At least in the early action today, it would appear that calm in the Greek situation will give the bull’s some added confidence, while the bear camp will attempt to play up the prospect of weak jobs news from the US economy. For most of the last two months, the gold market has acted like a physical commodity market and therefore the tight correlation with equities is likely to continue to impact gold prices.
SILVER MARKET FUNDAMENTALS: The Silver market has managed another new high for the move today and in the process it has managed to rise within close proximity to the 100 day moving average of $17.33. Clearly silver appears to be up beat toward the prospect of global growth, in the wake of an improvement in the Greek situation. It almost seems as if silver and other physical commodity markets have taken overtly hawkish dialogue from the US Fed, as a sign that the US economy “must” be improving. In other words, if the Fed is feeling the need to tighten, they must be seeing signs of progression in the US economy. In the short term, weakness in the Dollar and a lack of concern toward the economy looks to favor the silver bulls, while the bear camp will look to potential weakness in upcoming US jobs figures and further debt problems to stem the current rise in silver prices. The bear camp might also be hopeful that US monthly payroll readings on Friday morning will serve their case better than the economic psychology seen in the first three days of this week. In the end, classic supply and demand news in silver is minimal and seemingly unable to unseat the focus on outside market forces.
PLATINUM: Another new high for the move leaves the bull camp with clear control over platinum prices. A weaker Dollar and a pattern of positive spin on the economic outlook looks to add to the upward momentum in platinum. With the added support from a possible platinum strike in Australia, the platinum market is getting both internal and external fundamental support. Next upside targeting in April platinum is seen at $1,584 and again up at $1,594. While we have a gut concern that economic views are overly optimistic, it probably won’t pay to stand in the way of this market in the coming trading session.
Tags: Gold, Metals, Platinum, Silver
About Dave Hightower