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OUTSIDE MARKET DEVELOPMENTS: Asian stocks indices finished the week on a positive note with the Japanese Nikkei showing an impressive +2.25% rally on the day. European stocks are trading fractionally higher, with a cautious tone as Euro bank stress test results are set to be released today. U.S. equities are higher to start after trading above Thursday’s highs. Economic data released over the last 24 hours has come in better than expected, and that has weighed on the U.S. dollar. A record monthly jump in German sentiment figures to new three year highs coupled with optimism for solid German bank results have carried the Euro higher. Second quarter U.K. GDP figures showed 1.10% growth on the quarter, and that news seems to have rallied the British Pound against the U.S. dollar. Some traders viewed the robust U.K growth results as putting pressure on the Bank of England to boost interest rates. The focus of the day remains on the Euro zone bank stress test results and whether they meet positive expectations already priced into the markets.
GOLD MARKET FUNDAMENTALS: The gold market seems to be poised to start the Friday US trade out on a positive footing. Apparently the gold trade is cheered by favorable economic readings from the UK and Germany. Some traders are sticking by the idea that the European Bank Stress tests results are a reason to be long gold. In fact, some traders are suggesting that the market might have built in very favorable results from the stress tests and therefore almost any sign of trouble within the reports today might be a reason to kick up flight to quality instruments again. However, seeing the UK 2nd quarter GDP growth come in at twice the expected growth rate and seeing a historically big single month jump up in the German Ifo seems to have improved the macro economic outlook today and in turn taken the markets attention off the noted slowing fears in the US economy. In short, gold appears to be tracking its physical commodity market fundamentals this morning and that could mean that equity market action could be as critical as action in the Dollar. With the Dollar showing some weakness this morning, it would appear that gold is also seeing some currency market support. Comex Gold Stocks were 11.114 million ounces down 550 ounces.
SILVER MARKET FUNDAMENTALS: The silver market is showing marginal interest in the upside in the early going today with the trade generally looking over its shoulder to the action in the equity markets. Certainly minor weakness in the Dollar is lending some support to silver but silver has spent a lot of time this week mirroring the action in the US equity markets. With more favorable US corporate earnings news overnight and very favorable international economic news, it would seem like the physical commodity market track is presenting a positive case to the silver trade this morning. Silver might also have been bolstered this morning by news of a couple bullish silver forecasts from private entities overnight. Comex Silver Stocks were 110.937 million ounces up 193,009 ounces. Silver stocks have declined 12 of the last 20 days.
PLATINUM: The platinum market comes into the action today with a distinct upside breakout on the charts. Since the break out rises above a well defined consolidation high zone that alone could prompt stop loss buying. With a private brokerage report coming out bullish on platinum prices and the outlook toward the Euro zone improved, it is possible that platinum is simply playing catch-up today. Initial resistance is now seen at $1,550 and critical support moves up to $1,541.00.
Metals Market Commentary – 2010.07.23
by Dave Hightower on July 23, 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: Asian stocks indices finished the week on a positive note with the Japanese Nikkei showing an impressive +2.25% rally on the day. European stocks are trading fractionally higher, with a cautious tone as Euro bank stress test results are set to be released today. U.S. equities are higher to start after trading above Thursday’s highs. Economic data released over the last 24 hours has come in better than expected, and that has weighed on the U.S. dollar. A record monthly jump in German sentiment figures to new three year highs coupled with optimism for solid German bank results have carried the Euro higher. Second quarter U.K. GDP figures showed 1.10% growth on the quarter, and that news seems to have rallied the British Pound against the U.S. dollar. Some traders viewed the robust U.K growth results as putting pressure on the Bank of England to boost interest rates. The focus of the day remains on the Euro zone bank stress test results and whether they meet positive expectations already priced into the markets.
GOLD MARKET FUNDAMENTALS: The gold market seems to be poised to start the Friday US trade out on a positive footing. Apparently the gold trade is cheered by favorable economic readings from the UK and Germany. Some traders are sticking by the idea that the European Bank Stress tests results are a reason to be long gold. In fact, some traders are suggesting that the market might have built in very favorable results from the stress tests and therefore almost any sign of trouble within the reports today might be a reason to kick up flight to quality instruments again. However, seeing the UK 2nd quarter GDP growth come in at twice the expected growth rate and seeing a historically big single month jump up in the German Ifo seems to have improved the macro economic outlook today and in turn taken the markets attention off the noted slowing fears in the US economy. In short, gold appears to be tracking its physical commodity market fundamentals this morning and that could mean that equity market action could be as critical as action in the Dollar. With the Dollar showing some weakness this morning, it would appear that gold is also seeing some currency market support. Comex Gold Stocks were 11.114 million ounces down 550 ounces.
SILVER MARKET FUNDAMENTALS: The silver market is showing marginal interest in the upside in the early going today with the trade generally looking over its shoulder to the action in the equity markets. Certainly minor weakness in the Dollar is lending some support to silver but silver has spent a lot of time this week mirroring the action in the US equity markets. With more favorable US corporate earnings news overnight and very favorable international economic news, it would seem like the physical commodity market track is presenting a positive case to the silver trade this morning. Silver might also have been bolstered this morning by news of a couple bullish silver forecasts from private entities overnight. Comex Silver Stocks were 110.937 million ounces up 193,009 ounces. Silver stocks have declined 12 of the last 20 days.
PLATINUM: The platinum market comes into the action today with a distinct upside breakout on the charts. Since the break out rises above a well defined consolidation high zone that alone could prompt stop loss buying. With a private brokerage report coming out bullish on platinum prices and the outlook toward the Euro zone improved, it is possible that platinum is simply playing catch-up today. Initial resistance is now seen at $1,550 and critical support moves up to $1,541.00.
Tags: Gold, Metals, Silver
About Dave Hightower