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OUTSIDE MARKET DEVELOPMENTS: There appears to be ongoing Greek Debt concerns again this morning and perhaps some weakness in gold and silver prices because of this morning’s global equity market action. However, the ECB decided to leave to leave interest rates unchanged and that would suggest that the weakness in equities and precious metals markets is perhaps the result of something other than rate hike fears. With Greek credit spreads rising sharply this morning and the equity markets in that country opening and trading 5% lower, it would certainly seem like the Greek debt concerns are serving to undermine a host of physical commodity markets. Not surprisingly the market gave little attention to favorable UK Manufacturing readings or to a rise in UK Halifax home prices overnight. In other words, the markets seem to be content to embrace a negative global macro economic view this morning and that in turn has seemingly provided the Euro with a fresh downside push in the early Thursday US trade. In looking forward, the US will present initial and ongoing claims data, a 30 auction result and a Foreign Central Bank holdings report late in the day today. The market will also see a series of private chain store sales readings early this morning and while that data isn’t typically considered first tier, there are some traders expecting those figures to show noted forward progress on the US recovery effort.
GOLD MARKET FUNDAMENTALS: Apparently the gold market wasn’t that interested in the news of another decline in South African gold and non gold metal production for the month of February. With February year over year gold production dropping by more than 9% in the latest monthly figures, one might have expected gold prices to have garnered some support but instead the gold market this morning seems to be focused on the demand side of the equation. The market also didn’t seem to be that concerned about potential gold production setbacks in Kyrgyzstan that could result from a political power shift. Some players suggest that gold was simply overdone at the highs yesterday and with a slight resumption of Greece concerns and a higher US Dollar today, it is possible that a number of longs have decided to bank profits. The bear camp wants to suggest that rising Greek credit costs are set to revive the upside tilt in the Dollar, while the bull camp in gold is pulling for something favorable from either the US claims data or from the private US chain store sales figures.
SILVER MARKET FUNDAMENTALS: Typically silver might have been able to garner some spillover support from news of declining South African gold production overnight but as in the gold market, the silver trade doesn’t appear to be that interested in classic supply side developments. Furthermore, silver exchange stocks for April 6th were 116.343 million ounces, down 107,168 ounces, but again the silver market doesn’t seem to be capable of benefiting from minimal supply side issues. With the silver market recently paying a lot of attention to physical demand issues and the market also seemingly tracking both copper and platinum prices, it is possible that part of the early weakness in silver prices this morning, is mostly the result of outside market action. Traders are also suggesting that weaker equities and a higher US Dollar are serving to initially pressure silver prices.
PLATINUM: Clearly the platinum market was overbought into the prior sessions high and perhaps in need of some technical back and fill action on the charts. In addition to a slight downshift of global macro economic optimism, the platinum market also seems to be under some pressure because of a rising Dollar and renewed Greek debt concerns. In retrospect, some platinum buyers were pulled into the market early this week, because of fears that platinum production in South Africa could be disrupted because of power related issues ahead and that won’t be a supply side problem that is easily removed from the equation. In the near term, the path of least resistance is pointing downward with a near term corrective target of $1,701.
Metals Market Commentary – 2010.04.08
by Dave Hightower on April 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: There appears to be ongoing Greek Debt concerns again this morning and perhaps some weakness in gold and silver prices because of this morning’s global equity market action. However, the ECB decided to leave to leave interest rates unchanged and that would suggest that the weakness in equities and precious metals markets is perhaps the result of something other than rate hike fears. With Greek credit spreads rising sharply this morning and the equity markets in that country opening and trading 5% lower, it would certainly seem like the Greek debt concerns are serving to undermine a host of physical commodity markets. Not surprisingly the market gave little attention to favorable UK Manufacturing readings or to a rise in UK Halifax home prices overnight. In other words, the markets seem to be content to embrace a negative global macro economic view this morning and that in turn has seemingly provided the Euro with a fresh downside push in the early Thursday US trade. In looking forward, the US will present initial and ongoing claims data, a 30 auction result and a Foreign Central Bank holdings report late in the day today. The market will also see a series of private chain store sales readings early this morning and while that data isn’t typically considered first tier, there are some traders expecting those figures to show noted forward progress on the US recovery effort.
GOLD MARKET FUNDAMENTALS: Apparently the gold market wasn’t that interested in the news of another decline in South African gold and non gold metal production for the month of February. With February year over year gold production dropping by more than 9% in the latest monthly figures, one might have expected gold prices to have garnered some support but instead the gold market this morning seems to be focused on the demand side of the equation. The market also didn’t seem to be that concerned about potential gold production setbacks in Kyrgyzstan that could result from a political power shift. Some players suggest that gold was simply overdone at the highs yesterday and with a slight resumption of Greece concerns and a higher US Dollar today, it is possible that a number of longs have decided to bank profits. The bear camp wants to suggest that rising Greek credit costs are set to revive the upside tilt in the Dollar, while the bull camp in gold is pulling for something favorable from either the US claims data or from the private US chain store sales figures.
SILVER MARKET FUNDAMENTALS: Typically silver might have been able to garner some spillover support from news of declining South African gold production overnight but as in the gold market, the silver trade doesn’t appear to be that interested in classic supply side developments. Furthermore, silver exchange stocks for April 6th were 116.343 million ounces, down 107,168 ounces, but again the silver market doesn’t seem to be capable of benefiting from minimal supply side issues. With the silver market recently paying a lot of attention to physical demand issues and the market also seemingly tracking both copper and platinum prices, it is possible that part of the early weakness in silver prices this morning, is mostly the result of outside market action. Traders are also suggesting that weaker equities and a higher US Dollar are serving to initially pressure silver prices.
PLATINUM: Clearly the platinum market was overbought into the prior sessions high and perhaps in need of some technical back and fill action on the charts. In addition to a slight downshift of global macro economic optimism, the platinum market also seems to be under some pressure because of a rising Dollar and renewed Greek debt concerns. In retrospect, some platinum buyers were pulled into the market early this week, because of fears that platinum production in South Africa could be disrupted because of power related issues ahead and that won’t be a supply side problem that is easily removed from the equation. In the near term, the path of least resistance is pointing downward with a near term corrective target of $1,701.
Tags: Copper, Gold, Metals, Silver
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