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OUTSIDE MARKET DEVELOPMENTS: From a big picture perspective, the metals markets enter the early Thursday US trade with what appears to be a slightly upbeat macro economic tilt. In fact, some initial strength in the Euro and Pound overnight seems to suggest that the currency markets are showing signs of an increase in risk appetites again. With the Chinese floating favorable economic data overnight and that data flow actually fostering inflationary expectations instead of growth views, that would seem to be a 180 degree shift from the fears of a failed recovery threat in China from several weeks ago. As least in the early going today, concerns toward the Greece and UK debt situations appear to be tamped down again and that in turn appears to have put the US Dollar under some initial pressure. In looking forward, the metals trade will technically see the first noted scheduled data flow of the week from the US, in the form of the US claims report. With some market players suggesting that February activity was restricted due to adverse weather, some players are suggesting that today’s claims figures could be the first data points that are out from under the negative influences of severe winter weather. The market will also see US Trade Balance readings and the results of a 30 Year Bond auction.
GOLD MARKET FUNDAMENTALS: The bull camp will probably try to play up news that South African gold production for the month of January forged another noted year over year decline. However, news of sagging South African gold production is not new news and even with the year over year decline in output coming in north of 18%, the gold trade just hasn’t given patently bullish supply side news that much credence lately. Some players have suggested that falling gold production will be given more credence when the trade begins to accept the prospect of sustainable global growth. Seeing talk of a possible overheating Chinese economy and a slightly weaker US Dollar would seem to leave the bull camp with a classic fundamental edge early today, but given the lingering weakness in gold prices early today, it would not seem like the early gold trade is embracing typically bullish angles. In retrospect, the gold market showed some surprising reaction to the ebb and flow of the currency markets in the prior trading session and therefore some players are of a mind, that the focus of the gold market is in a state of flux. Typically the gold market would be expected to benefit in the face of favorable US claims figures later this morning, especially if that news causes the Dollar to weaken, but the action yesterday calls that relationship into question.
SILVER MARKET FUNDAMENTALS: The silver market this morning has already managed a quasi downside extension on the charts, with the May silver contract falling to the lowest level since March 2nd. The bull camp might be slightly disappointed with a modest rise in daily silver exchange stocks overnight, but it is also possible that the trade will give that news very little attention. The bull camp continues to suggest that silver is holding up better than gold on its charts and therefore it is possible that the silver trade will see the Tuesday low of $16.875 as some form of pivot point price. However, weakness in copper and platinum prices early today, would seem to rob the silver market of the support that was seen from those markets earlier in the week. The silver bulls probably hope for something supportive from the US claims data this morning, especially if that data serves to push up the Euro and weaken the US Dollar. The May silver contract comes into the early Thursday trade, right on its 50 day moving average of $16.89.
PLATINUM: The initial bias in platinum is pointing downward today but we don’t get the sense that platinum is poised for a major washout on the charts. We do think that the market became short term overbought early in the week and a certain amount of back and fill was needed. The real test of the bear’s resolve could be seen in the event that US numbers are good this morning. Near term up trend channel support in April platinum is seen at $1,578, but the 50 day moving average isn’t seen until $1,545.
Precious Metals Commentary – 2010.03.11
by Dave Hightower on March 11, 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: From a big picture perspective, the metals markets enter the early Thursday US trade with what appears to be a slightly upbeat macro economic tilt. In fact, some initial strength in the Euro and Pound overnight seems to suggest that the currency markets are showing signs of an increase in risk appetites again. With the Chinese floating favorable economic data overnight and that data flow actually fostering inflationary expectations instead of growth views, that would seem to be a 180 degree shift from the fears of a failed recovery threat in China from several weeks ago. As least in the early going today, concerns toward the Greece and UK debt situations appear to be tamped down again and that in turn appears to have put the US Dollar under some initial pressure. In looking forward, the metals trade will technically see the first noted scheduled data flow of the week from the US, in the form of the US claims report. With some market players suggesting that February activity was restricted due to adverse weather, some players are suggesting that today’s claims figures could be the first data points that are out from under the negative influences of severe winter weather. The market will also see US Trade Balance readings and the results of a 30 Year Bond auction.
GOLD MARKET FUNDAMENTALS: The bull camp will probably try to play up news that South African gold production for the month of January forged another noted year over year decline. However, news of sagging South African gold production is not new news and even with the year over year decline in output coming in north of 18%, the gold trade just hasn’t given patently bullish supply side news that much credence lately. Some players have suggested that falling gold production will be given more credence when the trade begins to accept the prospect of sustainable global growth. Seeing talk of a possible overheating Chinese economy and a slightly weaker US Dollar would seem to leave the bull camp with a classic fundamental edge early today, but given the lingering weakness in gold prices early today, it would not seem like the early gold trade is embracing typically bullish angles. In retrospect, the gold market showed some surprising reaction to the ebb and flow of the currency markets in the prior trading session and therefore some players are of a mind, that the focus of the gold market is in a state of flux. Typically the gold market would be expected to benefit in the face of favorable US claims figures later this morning, especially if that news causes the Dollar to weaken, but the action yesterday calls that relationship into question.
SILVER MARKET FUNDAMENTALS: The silver market this morning has already managed a quasi downside extension on the charts, with the May silver contract falling to the lowest level since March 2nd. The bull camp might be slightly disappointed with a modest rise in daily silver exchange stocks overnight, but it is also possible that the trade will give that news very little attention. The bull camp continues to suggest that silver is holding up better than gold on its charts and therefore it is possible that the silver trade will see the Tuesday low of $16.875 as some form of pivot point price. However, weakness in copper and platinum prices early today, would seem to rob the silver market of the support that was seen from those markets earlier in the week. The silver bulls probably hope for something supportive from the US claims data this morning, especially if that data serves to push up the Euro and weaken the US Dollar. The May silver contract comes into the early Thursday trade, right on its 50 day moving average of $16.89.
PLATINUM: The initial bias in platinum is pointing downward today but we don’t get the sense that platinum is poised for a major washout on the charts. We do think that the market became short term overbought early in the week and a certain amount of back and fill was needed. The real test of the bear’s resolve could be seen in the event that US numbers are good this morning. Near term up trend channel support in April platinum is seen at $1,578, but the 50 day moving average isn’t seen until $1,545.
Tags: Gold, Metals, Platinum, Silver
About Dave Hightower