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OUTSIDE MARKET DEVELOPMENTS: While equity markets in Asia and Europe are generally higher this morning, US equity indices are reflecting small losses during the initial Thursday morning trading action. The Dollar is moderately higher against most of the major currencies going into the US opening today, with minor losses to the Pound and Canadian. The US Treasury avoided naming China as a currency manipulator in their semi-annual report on exchange rate policies. The Bank of Korea raised benchmark interest rates for the first time since 2008. The President of the European Central Bank said that he did not feel that budget cuts would put the EU back into a recession. The German Consumer Price Index for June was up 0.9%, in line with forecasts. French Industrial Production for May was up 1.9%, above forecasts. The UK Producer Price Index for June was 5.1% year-on-year, lower than expectations. The UK Foreign Trade Deficit for May was 8.1 billion Pounds, higher than forecast. The only major US economic number scheduled for release today will be Wholesale Trade for May, at 9:00 AM.
GOLD MARKET FUNDAMENTALS: In general, the gold trade continues to fear a further tamping down of flight to quality sentiment, as the flow of patently discouraging news from the Euro zone this week has been accentuated by some positive US economic news flow from the US. With US ongoing claims technically forging a downside breakout on the charts yesterday, some traders jumped to the conclusion that the US economy was holding together better than recent expectations. With a pattern of gains in US equities also seen this week, an improved macro economic view was given added credence and that in turn tamped down uncertainty. The gold market apparently doesn’t know how to handle news that the White House seems to have given the Chinese a temporary pass on being tagged as a currency manipulator, perhaps because certain members of Congress are still committed to taking action against China. It is also possible that a series of interest rate hikes from Asia overnight were seen as a negative by some gold traders. While the US report schedule today only contains a Trade Balance release, that report should temporarily distract the gold market away from its recently acquired infatuation with the action in the US equity markets. Comex Gold Stocks were 10.959 million ounces up 63,802 ounces. Comex Gold Stocks have reached another new record high level.
SILVER MARKET FUNDAMENTALS: The silver bulls have to be discouraged this week as gains in a host of physical commodities this week were not accompanied by strength in silver prices. Clearly the silver market favored the flight-to-quality focus this week instead of its classic physical commodity market fundamentals. With another Canadian silver miner overnight expected to float record/increased output, the classic supply side fundamentals in the silver market could be seen as a detriment to prices, but demand not supply seems to be the dominating force in determining silver prices lately. The bull camp might suggest that a consolidation around this week’s lows might offer up support around the $17.61 area today, but the bear camp could point to the inability to sustain prices above the even number $18.00 level as a sign of ongoing weakness. Some traders think that upbeat US Fed statements overnight and news of rate hikes from Asia overnight are also serving to limit silver prices. Comex Silver Stocks were 114.502 million ounces up 602,288 ounces. Stocks have declined 11 of the last 20 days.
PLATINUM: The platinum market continues to diverge with gold and silver, and in the process has cast its lot with the recovery crowd. In other words, platinum is behaving like a classic physical commodity in the face of gradually improving macro economic sentiment. However, gains off this week’s lows have been rather muted and that leaves the bulls with only minimal confidence. With the middle of the last month’s consolidation zone seen up at $1,550, that is a logical target/resistance point for the October platinum contract. However, we aren’t sure that the trade is going to see as much favorable economic news today as it was presented with yesterday. Therefore, we are a skeptical bull for the trade today.
Metals Market Commentary – 2010.07.09
by Dave Hightower on July 9, 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: While equity markets in Asia and Europe are generally higher this morning, US equity indices are reflecting small losses during the initial Thursday morning trading action. The Dollar is moderately higher against most of the major currencies going into the US opening today, with minor losses to the Pound and Canadian. The US Treasury avoided naming China as a currency manipulator in their semi-annual report on exchange rate policies. The Bank of Korea raised benchmark interest rates for the first time since 2008. The President of the European Central Bank said that he did not feel that budget cuts would put the EU back into a recession. The German Consumer Price Index for June was up 0.9%, in line with forecasts. French Industrial Production for May was up 1.9%, above forecasts. The UK Producer Price Index for June was 5.1% year-on-year, lower than expectations. The UK Foreign Trade Deficit for May was 8.1 billion Pounds, higher than forecast. The only major US economic number scheduled for release today will be Wholesale Trade for May, at 9:00 AM.
GOLD MARKET FUNDAMENTALS: In general, the gold trade continues to fear a further tamping down of flight to quality sentiment, as the flow of patently discouraging news from the Euro zone this week has been accentuated by some positive US economic news flow from the US. With US ongoing claims technically forging a downside breakout on the charts yesterday, some traders jumped to the conclusion that the US economy was holding together better than recent expectations. With a pattern of gains in US equities also seen this week, an improved macro economic view was given added credence and that in turn tamped down uncertainty. The gold market apparently doesn’t know how to handle news that the White House seems to have given the Chinese a temporary pass on being tagged as a currency manipulator, perhaps because certain members of Congress are still committed to taking action against China. It is also possible that a series of interest rate hikes from Asia overnight were seen as a negative by some gold traders. While the US report schedule today only contains a Trade Balance release, that report should temporarily distract the gold market away from its recently acquired infatuation with the action in the US equity markets. Comex Gold Stocks were 10.959 million ounces up 63,802 ounces. Comex Gold Stocks have reached another new record high level.
SILVER MARKET FUNDAMENTALS: The silver bulls have to be discouraged this week as gains in a host of physical commodities this week were not accompanied by strength in silver prices. Clearly the silver market favored the flight-to-quality focus this week instead of its classic physical commodity market fundamentals. With another Canadian silver miner overnight expected to float record/increased output, the classic supply side fundamentals in the silver market could be seen as a detriment to prices, but demand not supply seems to be the dominating force in determining silver prices lately. The bull camp might suggest that a consolidation around this week’s lows might offer up support around the $17.61 area today, but the bear camp could point to the inability to sustain prices above the even number $18.00 level as a sign of ongoing weakness. Some traders think that upbeat US Fed statements overnight and news of rate hikes from Asia overnight are also serving to limit silver prices. Comex Silver Stocks were 114.502 million ounces up 602,288 ounces. Stocks have declined 11 of the last 20 days.
PLATINUM: The platinum market continues to diverge with gold and silver, and in the process has cast its lot with the recovery crowd. In other words, platinum is behaving like a classic physical commodity in the face of gradually improving macro economic sentiment. However, gains off this week’s lows have been rather muted and that leaves the bulls with only minimal confidence. With the middle of the last month’s consolidation zone seen up at $1,550, that is a logical target/resistance point for the October platinum contract. However, we aren’t sure that the trade is going to see as much favorable economic news today as it was presented with yesterday. Therefore, we are a skeptical bull for the trade today.
Tags: Copper, Gold, Metals, Platinum, Silver
About Dave Hightower