The Hightower Report

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OUTSIDE MARKET DEVELOPMENTS: Asian equity markets were generally stronger this morning, off mostly up beat data flows. However, European equities were mixed to slightly weaker overnight off some softer than expected guidance from a couple multinational heavyweights. In the early action today, US equities were showing mixed action, and it would appear that the US market is looking for some guidance from scheduled data or perhaps from a series of Fed speeches later today. From the US scheduled data front, the markets will be presented with a private layoff report early on and that will be followed by weekly claims figures, which are expected to post a minor decline. While the market will also see a US Productivity reading, the trade doesn’t think that today’s Productivity readings are likely to have a noted impact on Fed policy. It is also possible that a series of Fed speeches/testimony could have an impact on precious metals and physical commodity markets during the session today. A portion of the trade thinks the Fed will hint at more assistance for the US economy.

GOLD MARKET FUNDAMENTALS: At least to start today, the gold market appears to lack a definitive opinion, even though Asian stocks were higher and the S&P seemed to have somewhat positive views toward the potential track of the European economy. In fact, S&P suggested that the odds were tilted in favor of a mild European recession/slow recovery and that is certainly a better proposition than the hard landing or worse fears that dominated the European landscape off and on for the last 12 months. Gold might have been partially undermined by predictions of a slight decline in Indian gold imports for the month of January versus year ago levels, especially after the Indian gold price peg was lifted earlier this week. However, gold reportedly saw some improved demand in Asia overnight but that might have been catch up action to the gains forged in the US Wednesday gold trade. Some traders think the $1,750 level has become a pivot point in the April gold contract, but others think gold will need to see more gains in the Euro and or gains in US equities today just to put the bull camp in definitive control of gold prices. It would seem like gold prices have continued to mostly track physical commodity market fundamentals and therefore the claims figures today might serve to set the tone of prices for the Thursday morning US trade. Comex Gold Stocks were 11.493 million ounces down 964 ounces. Gold stocks have declined in 12 of the last 20 days.

SILVER MARKET FUNDAMENTALS: The March silver contract continued to consolidate in the overnight action and to the bear camp that hints at a loss of momentum. However, the bull camp might spin the consolidation action into a positive by suggesting the market is simply building a base above $33.00. Like gold, silver continues to track classic physical commodity market fundamentals and that means the bulls need a stronger Euro and something positive from US scheduled data and or from the US Fed. However, in the early action today silver seems to be lagging relative to gold and platinum prices and that might embolden some in the bear camp. In fact, silver seems to be tracking closely with copper and that could suggest the silver trade might be looking for direction from US claims and from the US equity markets. Some silver bulls are hopeful that dialogue from various Fed sources today will serve to provide some fresh lift to silver prices. Comex Silver Stocks were 128.983 million ounces up 312,407 ounces. Silver stocks have increased 14 of the last 20 days.

PLATINUM: The platinum market has also shown some consolidation action of late but prices enter the Thursday US trade within close proximity to this week’s highs. It would also seem like platinum is tracking with gold instead of silver and copper and that might mean platinum could be less dependant on the scheduled data than some might have expected. Platinum might be garnering some support from news that labor conflict has continued at Impala, with that company reportedly firing up to 13,000 workers who participated in what was ruled to be an illegal strike action. A critical pivot point might be seen in April platinum at $1,616 but the early action seems to hint at a possible return to the highest levels since November 15th on the charts.

Below is a sample of The Hightower Report’s 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 were generally stronger during overnight trading, early indications are that US equity markets will open with substantial gains later on today. The US Dollar is weaker against most of the major currencies this morning. The Spanish Prime Minister stated that there was no current proposal to expand the Euro zone bailout fund to 2 trillion Euros but that didn’t seem to dent optimism in many markets. The Greek Prime Minister said that he would “guarantee” that his nation would meet all commitments to receive further bailout funds from the IMF, EU and ECB. A private survey of German Consumer Sentiment during September was 5.2, higher than market expectations. Euro zone money growth during August was 2.8%, higher than forecasts. Major US economic numbers to be released this morning include a private survey of US Home Sales at 8:00, a private survey of US Consumer Confidence at 9:00 AM, and private surveys of store sales released during the session. In addition, Fed Regional Presidents Lockhart and Fisher will give speeches during the session.

GOLD MARKET FUNDAMENTALS: In addition to a more upbeat attitude toward the Greek/EU debt situation, the gold market overnight also saw favorable Indian gold demand news from the World Gold Council overnight. Apparently the WGC thinks that Indian demand for gold is set to firm in the wake of a good monsoon season and also because of increased seasonal interest. Not surprisingly, the Indian gold trade was higher overnight, but that move might have simply been the result of the “risk-on” mentality and a wave of higher price action in many physical commodity markets. Record exchange volume in some gold instruments yesterday, might give the recent bounce even more technical credibility, but many traders think the direction of gold is still tightly wound up in the direction of the equity markets. It does seem as if dialogue from the Greek Finance Minister and German dialogue on the debt subject overnight have contributed to a minor wave of optimism on the current EU debt crisis standing. In looking forward, the gold market is likely to see some impact from a rather active slate of US economic readings today, as the gold bulls seem to need favorable economic vibes to keep the sellers at bay. The gold market will probably keep a close eye on the odds of acceptance of the latest ECB plan in voting by member countries. Comex Gold Stocks were 11.367 million ounces up 5,837 ounces.

SILVER MARKET FUNDAMENTALS: Like gold, the silver market has also managed a rather impressive recovery attempt overnight, with the December contract forging a climb above the $32.50 level. Silver seems to have established a tight positive correlation with the equity markets, which seem to be signaling a continuation of “risk-on” from the prior trading session. At least to start, a large measure of the optimism in the markets this morning, seems to be the result of hopes that the EU is coming together on a plan to bolster their back up fund. Since the silver market hasn’t paid that much attention to physical supply side developments recently, the silver market probably isn’t deriving that much support from news overnight of a minor silver production shutdown. All things considered, silver and other physical commodity markets appear to be emboldened by hope for calm waters from the Euro zone debt crisis. Given the recent fear of a global recession, the silver and equity markets are also likely to take some direction from a rather active slate of US economic data today. The 200 day moving average in the December silver contract is seen at $36.06 today, while the initial Fibonacci retracement level off the September slide was regained at $32.77 overnight. Comex Silver Stocks were 107.230 million ounces up 1,461,966 ounces and one has to wonder if that rise is the direct result of the steep liquidation in silver prices this month. Comex Silver Stocks are at the highest levels since 12/08/2010. Stocks have increased 12 of the last 20 days. Comex Silver stocks are at their highest levels in the past 10.

PLATINUM: The platinum market is showing the least impressive short covering bounce of the precious metals complex overnight. A normal retracement off the September slide in October platinum would seem to produce a pivot point up at $1,637, but the failure to hold the prior session’s close of $1,546 could be technically damaging for the platinum trade today. However, there is a positive macro economic vibe in place off hopes of progress for the latest EU debt plan and that has rekindled buying interest in physical commodity markets. In short, a risk on mentality is in place and seeing higher equity prices has added to that bias. Initial resistance in October platinum is seen up at $1,602.10 but seeing inflationary comments from noted analyst Jim Kramer overnight, might give the bull camp some added resolve.

Below is a sample of The Hightower Report’s 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 were generally weaker during the overnight session, early indications are that US equity markets will open with moderate losses later on today. The US Dollar is weaker against most of the major currencies this morning. Early indications are that the Bank of Japan sold 4.5 trillion Yen during yesterday’s intervention, a record amount. Germany, France and Spain are scheduled to have talks concerning the financial markets later on this morning. The French Trade deficit during June was 5.6 billion Euros, a smaller deficit than expected. A private survey of UK Housing Prices was up 0.3%, slightly higher than expectations. The UK PPI during June was up 5.9% year-on-year, in line with forecasts. Major US economic numbers to be released this morning, include July Non-Farm Payrolls, July Private Payrolls and July Unemployment at 7:30 AM.

GOLD MARKET FUNDAMENTALS: According to international press coverage, the world is expressing its displeasure with global leaders by selling stocks and buying flight to quality instruments. An equal portion of the press lays the blame of sharp equity market losses this week on the weak global economy, which in many cases is made out to be even more precarious because many governments and central banks are thought to be handcuffed by debt and policy restrictions. The gold market saw a round of higher gold price forecasts floated again overnight, but the market was also presented with news of a double digit month over month increase in Chinese gold production overnight. While the Chinese gold production gain might have a negative impact on gold pricing in normal market conditions, heightened anxiety and the lack of alternative flight to quality instruments probably means that the gold trade will give classic supply side stories little attention. Some gold bulls are a little concerned with gold’s temporary setback yesterday, as that action seemed to be partially tied to the broad based washout in commodities. In other words, the idea that a slower economy is bullish to gold, was at least temporarily challenged yesterday and therefore some traders will be watching gold’s reaction to the US numbers this morning very closely. While the dollar managed another new high for the move overnight, it was unable to hold those highs and into the US open today, the dollar was actually below yesterday’s closing level. In the end, it is possible that currency action yesterday was at least partially responsible for the mid day weakness in gold. Comex Gold Stocks were 11.440 million ounces up 7,204 ounces. Stocks have declined 13 of the last 20 days. Comex Gold stocks are at their highest levels in the past 10.

SILVER MARKET FUNDAMENTALS: As in gold, the trend in silver is widely expected to continue pointing to the upside, but given the sharp gains and the propensity for volatility, traders should brace for a very active end to the trading week. With the trading range yesterday in September silver a rather robust $3.82 an ounce, many traders are suggesting that silver reached a critical junction. With gold and silver prices seemingly being bulled down by slowing fears and broad based physical commodity market liquidation at times yesterday, it seemed as if silver temporarily lost its flight to quality standing. Therefore a large portion of the trade today, will be keen to measure the resolve of the flight to quality bulls, in the wake of the US payroll report this morning. In other words, seeing silver weaken in the face of slack payroll readings, could signal a crack in the bull’s foundation. Some traders also think that a decent number from the US today, could dampen flight to quality sentiment for silver and therefore opinions are diverse and conflicted into the key payroll report release. Comex Silver Stocks were 105.297 million ounces down 459,420 ounces. Silver stocks have increased 14 of the last 20 days.

PLATINUM: The platinum market has already rushed to factor in at least a portion of global slowing this week, as October platinum prices to the overnight low were as much as $122 an ounce below this week’s highs. To the overnight low, October platinum prices were also $211 an ounce below this year’s highs and therefore platinum is being seen as a physical commodity market facing slowing ahead. However, October platinum has now returned to a level of $1,675 on the charts, which has managed to hold up the platinum market up on 4 separate and distinct occasions over the last 11 months! There was a fresh labor issue in South Africa overnight, but the market doesn’t look to garner much in the way of fresh buying, off minor and perhaps temporary supply side threats.

Below is a sample of The Hightower Report’s 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 Euro were generally stronger during overnight trading, early indications are for the US stock market to open today’s session with sizable gains. The Dollar is weaker against most of the major currencies during overnight trading, although posting a gain versus the Yen. Spain was able to auction 3.4 billion Euros worth of longer-term bonds, with good levels of demand from the market. The Swedish central bank raised benchmark interest rates in that nation by 0.25%, the sixth time they have done so in the past 10 months. The Japanese Trade surplus during March was 196.5 billion Yen, lower than expected. German PPI during March was up 6.2% year-on-year, lower than forecasts. Major US economic numbers to be released this morning include March Existing Home Sales at 9:00 AM, and a private survey of mortgage applications released during the session.

GOLD MARKET FUNDAMENTALS: Outside market forces have once again shifted to favor the bull camp, as the US Dollar is weaker, energy and commodity prices are higher and even equities are showing noted strength in the early US Wednesday morning trade. Apparently the gold trade prefers to see favorable US economic numbers and the trade generally expects to see a somewhat positive existing home sales report later this morning. Gold did not seem to be undermined by hints of aggressive austerity cuts from the US Treasury Secretary yesterday and gold also doesn’t seem to be undermined by growing talk that the Fed is preparing for a change in policy. With June gold rising through the $1,500 mark this morning that might spark a wave of media coverage that could fan bullish dialogue and eventually talk of an overbought condition. However, seeing higher equities, grain, energy and industrial metals price action overnight, would seem to favor the bull camp to start this morning. The gold market also saw a downward revision in 2011 gold production estimates from Polymetal a Russian miner. The trade was apparently tossing around rumors of a possible take over of Harmony gold but that talk was discounted by company officials. In the end, residual concerns from the US credit rating story early in the week appears to have sparked a wave of investment flow toward gold and that flow apparently isn’t discouraged by a recovery in US equities. Traders will be watching the gold market reaction to the scheduled US numbers closely this morning as the ability to rally again off positive US economic readings, suggests that the gold trade isn’t focused on the prospect of rising rates, but instead the market is focused on the prospect of inflation. Comex Gold Stocks were 11.089 million ounces up 5,300 ounces. Gold stocks have declined 12 of the last 20 days.

SILVER MARKET FUNDAMENTALS: The silver market continued to flash higher overnight, as the metals markets are being presented which a much more upbeat outside market environment this morning. In addition to positive equity market action, the silver trade is also seeing supportive currency market action, rising oil and physical commodity prices and at least in the early action today, the trade thinks that the US will see somewhat positive economic readings. Not surprisingly, the silver market seemed to mostly discount news overnight that Hochschild Mining was on track to reach its 1st quarter 2011 silver production target, perhaps because the silver market also saw evidence of a noted decline in silver output from a Russian silver mining operation. Polymetal saw a noted year over year quarterly decline in silver production of 23%, but recently the silver market has been more concerned with demand prospects, than with changes in physical supply. With the recent strength in silver and the markets recent out performance of the gold market, the headlines are starting to fill up with predictions of a return to all time high silver prices. Comex Silver Stocks were 103.120 million ounces up 300,345 ounces. Silver stocks have declined 15 of the last 20 days.

PLATINUM: The platinum market is showing some positive action this morning but it would appear that the market is having trouble keeping pace with gold and silver price action. Perhaps the platinum market is being held back by its industrial standing as the global auto industry is still being threatened by supply chain disruptions and fears for the Japanese economy. In retrospect, the platinum market seems to be caught in a $1,801 to $1,775 trading range in the July contract, even though the rest of the metals complex is in overdrive. The path of least resistance is pointing upward but platinum appears to be the weakest link in the metals complex.

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.