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OUTSIDE MARKET DEVELOPMENTS: Equity markets in Asia and Europe are mostly weaker this morning, which has led to US stock indices posting sizable losses during the initial Tuesday morning trade action. The Dollar is much stronger against most of the major currencies, but has lost ground versus the Yen going into the US opening. There is concern that European banks may have trouble paying bank 442 billion Euros in emergency 1-year loans due this week. A large revision in the April Chinese Leading Indicators, from +1.7% to only +0.3%, might have triggered a huge sell off in Chinese equity markets today, but other sources suggested an upcoming China AG bank IPO might have caused selling to raise cash for the new IPO. Tropical Storm Alex is expected to be upgraded to a hurricane later today, and it is tracking northwest into the Gulf of Mexico. Japanese Unemployment for May was 5.2%, higher than expected. Japanese Industrial Production for May was also down 0.1%, lower than forecast. The major US economic numbers scheduled for release today is a private survey of Consumer Confidence for June, to be released at 9:00 AM. The market will also see a private US Home Price survey.
GOLD MARKET FUNDAMENTALS: A large portion of the sharp drop in the London gold fix overnight is a catch up to the slide seen in the US Monday afternoon action. After the gold market generally ignored news of a decline in Peru gold production in the prior trading session, it is possible that the gold market will also ignore news this morning from Gold Fields of a rise in 4th quarter gold production. Recently the gold market has discounted or downplayed physical supply side stories in favor of the ebb and flow of investment/physical demand news. It is also possible that ongoing concerns for slumping Indian gold imports is serving to temper sentiment toward gold. On the other hand, flight to quality sentiment is apparently present in the Treasury and currency markets this morning and that might be providing some indirect support to gold prices regardless of the sloppy early track in prices this morning. Comex Gold Stocks were 10.861 million ounces down 1,397 ounces. Stocks have now declined in 12 of the last 20 days.
SILVER MARKET FUNDAMENTALS: The September silver contract this morning took out the prior two sessions lows in the early action today and that would seem to leave the bear camp emboldened. Apparently both silver and gold are missing out on the flight to quality view that is serving to lift US Treasuries this morning. If the Treasury market is rising off the fear of global or US slowing, that could be turning up the liquidation pressure on silver from its physical commodity market standing. While the silver market might be seeing some weak selling pressure from fears of slackening Indian silver imports, the silver market isn’t usually that interested in Indian silver import data. In the end, weakness in a host of physical commodity markets this morning could be spilling over into the silver market. Comex Silver Stocks were 114.929 million ounces up 547,748 ounces.
PLATINUM: The Platinum market is in the midst of a big range down extension, but apparently the October contract found some form of support at the even number $1,550 level. With fresh buying interest seen in the most recent positioning reports, it is possible that platinum might see bargain hunting buying increase on the coming slide in physical commodity prices. Until the macro economic outlook improves, we think that would-be buyers should wait for a slide to at least $1,526 in the October platinum contract before getting long for a position play.
Metals Market Commentary – 2010.06.29
by Dave Hightower on June 29, 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: Equity markets in Asia and Europe are mostly weaker this morning, which has led to US stock indices posting sizable losses during the initial Tuesday morning trade action. The Dollar is much stronger against most of the major currencies, but has lost ground versus the Yen going into the US opening. There is concern that European banks may have trouble paying bank 442 billion Euros in emergency 1-year loans due this week. A large revision in the April Chinese Leading Indicators, from +1.7% to only +0.3%, might have triggered a huge sell off in Chinese equity markets today, but other sources suggested an upcoming China AG bank IPO might have caused selling to raise cash for the new IPO. Tropical Storm Alex is expected to be upgraded to a hurricane later today, and it is tracking northwest into the Gulf of Mexico. Japanese Unemployment for May was 5.2%, higher than expected. Japanese Industrial Production for May was also down 0.1%, lower than forecast. The major US economic numbers scheduled for release today is a private survey of Consumer Confidence for June, to be released at 9:00 AM. The market will also see a private US Home Price survey.
GOLD MARKET FUNDAMENTALS: A large portion of the sharp drop in the London gold fix overnight is a catch up to the slide seen in the US Monday afternoon action. After the gold market generally ignored news of a decline in Peru gold production in the prior trading session, it is possible that the gold market will also ignore news this morning from Gold Fields of a rise in 4th quarter gold production. Recently the gold market has discounted or downplayed physical supply side stories in favor of the ebb and flow of investment/physical demand news. It is also possible that ongoing concerns for slumping Indian gold imports is serving to temper sentiment toward gold. On the other hand, flight to quality sentiment is apparently present in the Treasury and currency markets this morning and that might be providing some indirect support to gold prices regardless of the sloppy early track in prices this morning. Comex Gold Stocks were 10.861 million ounces down 1,397 ounces. Stocks have now declined in 12 of the last 20 days.
SILVER MARKET FUNDAMENTALS: The September silver contract this morning took out the prior two sessions lows in the early action today and that would seem to leave the bear camp emboldened. Apparently both silver and gold are missing out on the flight to quality view that is serving to lift US Treasuries this morning. If the Treasury market is rising off the fear of global or US slowing, that could be turning up the liquidation pressure on silver from its physical commodity market standing. While the silver market might be seeing some weak selling pressure from fears of slackening Indian silver imports, the silver market isn’t usually that interested in Indian silver import data. In the end, weakness in a host of physical commodity markets this morning could be spilling over into the silver market. Comex Silver Stocks were 114.929 million ounces up 547,748 ounces.
PLATINUM: The Platinum market is in the midst of a big range down extension, but apparently the October contract found some form of support at the even number $1,550 level. With fresh buying interest seen in the most recent positioning reports, it is possible that platinum might see bargain hunting buying increase on the coming slide in physical commodity prices. Until the macro economic outlook improves, we think that would-be buyers should wait for a slide to at least $1,526 in the October platinum contract before getting long for a position play.
Tags: Gold, Metals, Platinum, Precious Metals, Silver
About Dave Hightower