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OUTSIDE MARKET DEVELOPMENTS: The strength of the Dollar against European currencies, particularly the British Pound, has put precious metals prices under moderate pressure into the US Friday opening. Comments made overnight by an EU commissioner saying that the Greece situation has not been resolved yet, would seem to be behind the action in the currency markets. However, some metals traders have suggested recently that EU debt concerns were actually a source of buying support but that angle doesn’t seem to be in vogue this morning. News that the Greeks may sidestep the EU and appeal for help directly to the IMF could be seen as a back stop against a full return to runaway EU debt concerns. With no U.S. economic releases this morning, the markets might be left with the low inflation/muted growth view that was established earlier this week. However there is a triple witching expiration facing the US equity markets today and the expectation of a weekend vote on US health care reform and those two factors alone could serve to increase volatility in a number of commodity markets.
GOLD MARKET FUNDAMENTALS: April gold comes into the opening today under modest pressure, but still above this week’s lows. While there were reports of record gold production from a smaller producer overnight, the weakness in gold prices this morning appears to be the result of outside market influences, instead of classic supply and demand side developments. Therefore, the gold market probably won’t see much in the way of fresh selling interest from overnight news of higher Indian gold production in the ten months following April of 2009. The tech traders are noting a 21 day moving average at $1,118.80 today, as that level is just below the early Friday morning trade action. With the lack of scheduled US data flow today, the gold trade is likely to take a large measure of direction from either the currency markets or from US equities.
SILVER MARKET FUNDAMENTALS: May silver is showing some initial weakness in the early morning Friday trade. In fact, May silver has already managed to take out the lows of the last two trading days and at times this morning the silver market has also tracked below the 100 day moving average of $17.27. While silver exchange stocks have seen a series of modest builds this week, it would not seem like silver prices are being pressured this morning because of bearish physical supply news. Similarly, most traders doubt that news of lower US silver production for November 2009, versus October of 2009, from the US Geological Survey is being seen as a noted negative for silver prices today. While copper prices are higher this morning, weakness in energy prices and other physical commodity prices would seem to leave the outside market influence on silver mixed to slightly negative. In the end, a lack of scheduled US economic data today could mean that silver prices are destined to take a lot of direction from equities and from the currency markets.
PLATINUM: The platinum market is already seeing a partial breakdown on the charts this morning. Clearly platinum was technically overbought and perhaps in retrospect somewhat fundamentally overbought around this week’s highs. In fact, while the global economic outlook remains positive (with stories of an extremely tight Chinese labor market) the progression in the US recovery has been highly suspect. Up trend channel support in the April platinum market is seen at $1,606 toda, with the bear camp in the driver’s seat.
Precious Metals Commentary – 2010.03.19
by Dave Hightower on March 19, 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 strength of the Dollar against European currencies, particularly the British Pound, has put precious metals prices under moderate pressure into the US Friday opening. Comments made overnight by an EU commissioner saying that the Greece situation has not been resolved yet, would seem to be behind the action in the currency markets. However, some metals traders have suggested recently that EU debt concerns were actually a source of buying support but that angle doesn’t seem to be in vogue this morning. News that the Greeks may sidestep the EU and appeal for help directly to the IMF could be seen as a back stop against a full return to runaway EU debt concerns. With no U.S. economic releases this morning, the markets might be left with the low inflation/muted growth view that was established earlier this week. However there is a triple witching expiration facing the US equity markets today and the expectation of a weekend vote on US health care reform and those two factors alone could serve to increase volatility in a number of commodity markets.
GOLD MARKET FUNDAMENTALS: April gold comes into the opening today under modest pressure, but still above this week’s lows. While there were reports of record gold production from a smaller producer overnight, the weakness in gold prices this morning appears to be the result of outside market influences, instead of classic supply and demand side developments. Therefore, the gold market probably won’t see much in the way of fresh selling interest from overnight news of higher Indian gold production in the ten months following April of 2009. The tech traders are noting a 21 day moving average at $1,118.80 today, as that level is just below the early Friday morning trade action. With the lack of scheduled US data flow today, the gold trade is likely to take a large measure of direction from either the currency markets or from US equities.
SILVER MARKET FUNDAMENTALS: May silver is showing some initial weakness in the early morning Friday trade. In fact, May silver has already managed to take out the lows of the last two trading days and at times this morning the silver market has also tracked below the 100 day moving average of $17.27. While silver exchange stocks have seen a series of modest builds this week, it would not seem like silver prices are being pressured this morning because of bearish physical supply news. Similarly, most traders doubt that news of lower US silver production for November 2009, versus October of 2009, from the US Geological Survey is being seen as a noted negative for silver prices today. While copper prices are higher this morning, weakness in energy prices and other physical commodity prices would seem to leave the outside market influence on silver mixed to slightly negative. In the end, a lack of scheduled US economic data today could mean that silver prices are destined to take a lot of direction from equities and from the currency markets.
PLATINUM: The platinum market is already seeing a partial breakdown on the charts this morning. Clearly platinum was technically overbought and perhaps in retrospect somewhat fundamentally overbought around this week’s highs. In fact, while the global economic outlook remains positive (with stories of an extremely tight Chinese labor market) the progression in the US recovery has been highly suspect. Up trend channel support in the April platinum market is seen at $1,606 toda, with the bear camp in the driver’s seat.
Tags: Gold, Metals, Platinum, Silver
About Dave Hightower