Category: Snapshot

Morning Snapshot: Gold Easier Within Range

USAGOLD/Peter Grant/11-20-17

Gold is down modestly to start the holiday shortened week, but the tone within the range remains generally favorable after solid gains on Friday. Focus remains on the next tier of resistance at 1306.04/1308.80 (16-Oct high and 50% retracement of the entire move from 1357.50 to 1260.10).

Political and geopolitical tensions, along with recent weakness in stocks and the dollar, are all helping to underpin the yellow metal within the well defined range.

Negotiations in Germany to form a coalition government collapsed last night after the Free Democratic Party (FDP) walked out. The reaction in Europe has been muted thus far, with the euro recovering from initial losses. However, the risks may be considerable.

The U.S. economic calendar is light today with just October leading indicators. Expectations are for a 0.5% rise, after a 0.2% decline in September.

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Morning Snapshot: Gold Edges Higher Within the Range

USAGOLD/Peter Grant/11-17-17

Gold is up in early U.S. trade, underpinned by escalating political uncertainty and geopolitical tensions. The dollar and stocks remain somewhat defensive as well, providing additional support for the yellow metal.

The Wall Street Journal reported yesterday that more than a dozen Trump campaign officials were issued a subpoena by Special Counsel Robert Mueller last month, requesting documents and emails “that reference a set of Russia-related keywords.” This comes at a time when the Trump administration is trying to shepherd tax reform legislation through Congress, deemed critical to keeping their broader economic agenda on track.

North Korea has reportedly rejected Chinese overtures to give-up their nuclear program. “[T]here is no way other than standing against the repressive U.S. imperialists only with a nuclear deterrent of justice,” declared the state-run newspaper Rodong Sinmun.

U.S. housing starts for October came in much better than expected, surging 13.7% to a 1.290M pace. That’s the extent of the U.S. data today.

It’s worth mentioning that Canadian CPI slowed in October to 1.4% y/y, versus 1.6% in September. Median core CPI slowed to 1.7% y/y, down from 1.8% in September. These inflation data come in the month after the BoC surprised with a 25 bps rate hike in September.

A breach of the high from earlier in the week at 1289.50 is needed to clear the way for renewed probes above $1300. Key resistance is marked by the mid-October high at 1306.04, which is the trigger for a retest of the 1357.30 high for the year.

Meanwhile, the low end of the range is well defined at 1263.00/1260.10. Intervening barriers are at 1269.60 and 1264.70.

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Morning Snapshot: Gold Little Changed After Mixed Data, Tax Reform Concerns

USAGOLD/Peter Grant/11-16-17

Gold is up slightly in early New York trading, underpinned by recent softness in the dollar and mounting doubts about the prospects for tax reform legislation. Geopolitical tensions remain elevated as well, providing additional support to the yellow metal.

Senator Ron Johnson of Wisconsin has vowed not to vote for the Senate version of tax reform. “If they can pass it without me, let them,” said Johnson. There are reportedly some other potential defectors as well.

Today’s U.S. data were kind of a mixed bag. Industrial production for October was better than expected. The Philly Fed index sunk more than expected. Initial jobless claims jumped by 10k. Import and export prices were weaker than expected, dealing perhaps another blow to hopes that inflation is picking up.

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Morning Snapshot: Gold Hits 4-Week Highs, Remains Firm After Today’s Data

USAGOLD/Peter Grant/11-15-17

Gold is up, reaching new 4-week highs above 1288.70. The yellow metal was being buoyed by a weaker dollar and risk aversion going into this morning’s data, and is sustaining those gains post-data.

Geopolitical tensions remain high, with an apparent coup in Zimbabwe adding to the risk-off mindset.

U.S. CPI for October came in pretty much in line with expectations. Headline CPI slowed to a 2.0% annual pace, down from 2.1% in September. Core CPI on the other hand accelerated to 1.8% y/y, versus 1.7% in September. It was the first uptick since January.

That may keep December rate hike expectations elevated, but one uptick in 9-months does not a trend make. I don’t think it will be enough to sway the more dovish members of the Fed that are leaning toward keeping policy on pause through year-end.

U.S. retail sales rose 0.2% in October, above expectations of +0.1%. However, ex-auto rose just 0.1% on expectations of +0.3%. September was revised higher in both instances, but it appears that hurricane distortions are fading.

While gold remains confined to the range that has dominated for the last month, upticks in more recent weeks bode well for renewed tests above $1300. A breach of resistance at 1306.04 (16-Oct high) is still needed to return attention to the high for the year at 1357.50 (08-Sep high).

The bottom of the range at 1263.00/1260.10. This level was reinforced by unsustained tests of the downside earlier in the week. Yesterday’s low at 1269.60 now provides a good intervening barrier.

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Morning Snapshot: Gold Pressured Within Range, Despite Weaker Dollar/Stocks

USAGOLD/Peter Grant/11-14-17

Gold is down in early New York trading, still well within the recent range. However, both the dollar and stocks are also weaker this morning, which should limit the downside for the yellow metal.

U.S. PPI came in hotter than expected in October. Both headline and core rose 0.4%, on expectations of +0.1% and +0.2% respectively. If CPI data beat expectations tomorrow, it will go a long way toward validating the exceedingly high expectations for a December rate hike.

However, if inflation really is picking up, that ultimately will be good for gold. The yellow metal is the classic hedge against inflation.

The dollar index is trading at a three week low on euro strength, after German GDP came in better than expected. While the German economy is humming along, it’s worth noting that German investors are hedging their bets by buying a lot of gold. Smart.

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Morning Snapshot: Gold Edges Up Within Range

USAGOLD/Peter Grant/11-13-17

Gold is up modestly, attempting to retrace Friday’s sharp intraday sell-off. Just about half of those losses have been recovered, but the yellow metal remains well contained within the recent range.

A softer dollar and weakness in stocks are offering support to gold. Focus remains on political uncertainty surrounding the House and Senate versions of tax reform legislation. There are concerns about the reconciliation process; what might ultimately reach the President’s desk and when that might happen.

Not much on the economic calendar today, but we have important inflation data coming out this week. October PPI is out tomorrow, with expectations calling for further slowing to 2.3% y/y. CPI is out on Wednesday. A small m/m increase is expected, which will likely result in a downtick to the annualized rate. Core CPI is expected to hold steady at 1.7% y/y.

The market continues to see a Fed rates hike next month as a given, despite persistently soft inflation. However, those expectations may be tempered if further weakness is evident in the October data. That would likely put the dollar under additional pressure, offering further support to gold.

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Morning Snapshot: Gold Adopted More Positive Tone Within Range This Week

USAGOLD/Peter Grant/11-10-17

Gold is slightly lower after having set 3-week highs in the previous 2 sessions. The yellow metal is garnering support from a modest pullback in the dollar and softer stocks, as doubt arose about the prospects for timely passage of the GOP tax reform legislation.

The Senate version delays the corporate tax cuts until 2019 and has more tax brackets than the House version. There is some concern that reconciliation is going to be contention and may prevent the legislation from reaching the President’s desk before year-end.

If the Trump administration fails to notch a significant legislative victory this year, any remaining momentum they have may be lost. That might put Republican congressional majorities in jeopardy next year, signalling the end of Trump’s pro-business, reflation agenda.

If that is the way things unfold, the U.S. stock market would be vulnerable to a serious correction. Safe-haven assets like gold would come back in favor and one might reasonably expect the Fed to reverse recent policy tightening.

Today’s U.S. calendar includes preliminary consumer sentiment for November and October Treasury budget. Next week’s data has October PPI and CPI. Both are expected to remain soft, which may raise some doubts about the true prospects for a December rate hike.

While gold adopted a more positive tone this week within the well-defined range, a convincing move back above $1300 is still needed to return a measure of confidence to the uptrend that has dominated most of this year. On the downside, support is well defined at 1263.00/1260.10.

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Morning Snapshot: Gold Edges Higher to Another 3-Week High

USAGOLD/Peter Grant/11-09-17

Gold is up modestly in early U.S. trading, buoyed by a weaker dollar and a drop in stocks. The yellow metal has set a new 3-week high at 1288.19. Silver remains narrowly confined within the recent range, trading just above $17.

The next minor tier of resistance for gold is at 1291.08. A breach of this level would bode well for further tests above $1300.

Initial jobless claims for last week were higher than expected. Later today we’ll see September wholesale sales. There will also be a $15 bln 30-year bond auction.

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Morning Snapshot: Gold and Silver Firmer Within Recent Ranges

USAGOLD/Peter Grant/11-08-17

Gold is higher in early U.S. trading, probing the high end of the range within the range within the range. That first tier of resistance is marked by last week’s high at 1284.20. Above that, 1306.04 and 1357.50 define the high ends of the broader ranges. The low end of the ranges are well defined at 1263.00/1260.10

Silver is higher, trading just above $17. Resistances to watch are at 17.26 and 17.47. The latter is likely a trigger for a push back above $18.

Today’s calendar is very light with only EIA crude data from last week. There is a $23 bln 10-year note auction as well.

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Morning Snapshot: Gold Ease Slightly Within Range

USAGOLD/Peter Grant/11-07-17

Gold is slightly lower today after yesterday’s late surge stalled shy of last week’s high at 1284.20. A breach of this level is needed to clear the way for renewed probes above $1300.

Continued dollar strength is helping to keep gold in check. The dollar index edged to a new 15-week high in overseas trading. Risk aversion associated with the Saudi corruption crackdown and President Trump’s trip to Asia are seen as underpinning the precious metals.

Silver gave back more than half of yesterday’s solid intraday gains overseas, but is back trading above $17 presently. The mid-October high at 17.41 is seen as key short-term resistance. Supports we’re watching at at 16.59 and 16.30.

Today’s economic calendar has JOLTs job openings for September, IBD/TIPP Economic Optimism Index and consumer credit. We’ll also hear FedSpeak from Janet Yellen and vice-chair Quarles.

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Morning Snapshot: Gold Edges Up Within Range Following NFP Miss

USAGOLD/Peter Grant/11-03-17

Gold is up slightly this morning, nonplussed by the NFP miss and still locked within the recent range. The dollar index remains narrowly confined as well near its 3-month highs, which is helping to limit the upside for the yellow metal. Silver is up as well, maintaining recent gains above $17.00.

U.S. nonfarm payrolls rose 261k in October, below expectations of +318k and whispers in the neighborhood of +400k. As I said in commentary yesterday, forecasters set a pretty high bar, creating the risk for disappointment. September NFP was revised higher from -33k to +18k, so at least the negative print is off the books. The unemployment rate ticked down to 4.065%.

So after a terrible number in September and a smaller than expected post-Hurricane rebound in October, how is it that the jobless rate ticked lower? Zerohedge explains:

…the number of people who exited the labor force soared by a near record 968,000 in October – the third highest on record – pushing the total number of people not in the labor force to a record 95.385 million, as the civilian labor force shrunk by whopping 765,000 in one month. — Zerohedge

Average hourly earnings came in unchanged for October, below expectations of +0.2%. The annualized rate of wage growth slowed to 2.4%.

Some are claiming this should be attributed to hurricane disruptions, but the chart presented by Bloomberg suggests that wage growth was meeting resistance ahead of 3% long before this hurricane season. This is something the Fed is likely to be watching very closely going into year-end, because if already tepid wage growth has stalled, it does not bode well for the inflation pressures that Fed keeps contending are just around the corner.

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Morning Snapshot: Gold remains consolidative within recent range

USAGOLD/Peter Grant/11-02-17

Gold is maintaining a consolidative tone at the low end of the range that has dominated for the past several weeks. Markets are awaiting the release of the House tax plan as well as President Trump’s nomination of the next Fed chair.

The House plan is expected to be focused on a permanent cut to corporate taxes, from 35% to 20%. Additionally, the number of individual income tax brackets are to be cut and the estate tax will be repealed. However, the devil is in the details and those details are likely to have significant implications for the national debt.

Fed Governor Jerome (Jay) Powell is widely anticipated to be nominated to replace Janet Yellen as Fed chair. Powell is a centrist and is likely to perpetuate the current policy tact.

Yesterday’s Fed policy statement did nothing to curtail expectations of a December rate hike. Fed funds futures put the probability at 97%, even though inflation remains below target.

A lot of focus will also be placed on tomorrow’s release of October jobs data. The market is anticipating a sizable rebound in nonfarm payrolls of 318k, following September’s surprising negative print.

As for today’s U.S. data, it has been generally positive with a better than expected rise of 3.0% in Q3 productivity (prelim) and bigger than expected drop in initial jobless claims.

The BoE raised rates by 25 bps today. It was the first hike in a decade and they indicated that 2 more would be needed during the next two years to control prices. With UK inflation running above target, this one may have made some sense, but some are already expressing concern that the BoE is being “too upbeat.”

Sterling has firmed, which is helping to check the upside in the dollar. That in turn, may help to underpin gold investment.

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Morning Snapshot: Gold firms within range

USAGOLD/Peter Grant/11-01-17

Gold is higher within the range, but remains limited by a firm dollar and stocks. The market is awaiting the Fed’s policy decision later today.

The Fed is expected to hold steady, keeping the December rate hike on the table. However, it might be worthwhile to temper tightening expectations going into year-end, just to give themselves some leeway in the event that inflation fails to pick up.

The ADP jobs survey came in stronger than expected, perhaps creating some upside risk for Friday’s nonfarm payrolls report. Expectations are presently +318k, with the unemployment rate holding steady at 4.2%.

Later this morning we’ll see manufacturing PMI and ISM, construction spending, EIA crude stocks and domestic car and truck sales.

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Morning Snapshot: Gold retreats back into range as dollar firms on weaker yen

USAGOLD/Peter Grant/10-31-17

The consolidative tone in gold persists as the dollar remains firm and stocks rebound. The yellow metal still needs to climb back above $1300 to ease short-term pressure on the downside.

The BoJ left the policy rate unchanged at -0.1%, kept 10-year JGB rates capped “around zero” and will maintain the QE pace of ¥80 trillion per year. Despite optimism about both growth and inflation, guidance remains dovish. That pressured the yen, buoying the dollar in the process.

The Fed begins their two-day FOMC meeting today. When policy is announced tomorrow, no change is expected. While a December rate hike will remain on the table, it might behoove the central bank to start tempering those expectations; unless they truly believe inflation is on the verge of rebounding.

Expressed concern about the ongoing absence of inflation — which is the reason they paused in September — would likely halt the recent rise in the dollar. With the ECB, BoC and BoJ maintaining their dovish guidance, it might be in the best interest of the Fed to hint that the pause might be perpetuated into 2018.

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Morning Snapshot: Gold remains range bound to begin busy week

USAGOLD/Peter Grant/10-30-17

Gold starts the week as it ended, consolidative within the recent range. The dollar is a little easier, as are stocks, with risk appetite tempered somewhat ahead of this rather busy week.

The first indictments in the Russian collusion investigation are occurring today. Former Trump campaign chairman Paul Manafort and his aide Rick Gates are supposed to turn themselves in to the FBI today.

The Fed’s two-day FOMC meeting commences tomorrow. No change to policy is anticipated, but markets will be looking for further clarification of the central bank’s intentions for December. The BoJ and BoE meet this week as well.

Today’s U.S. data are a mixed bag. Personal income and consumption jumped in September. However, core PCE inflation was up a scant 0.1%. The Fed still has an inflation problem, which was the primary reason they paused the tightening cycle in September.

Politico is reporting that President Trump will make his nomination for the next Fed chair on Thursday. They reported last week that the field had narrowed to John Taylor and Jerome Powell.

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Morning Snapshot: Gold remains defensive at low end of recent range

USAGOLD/Peter Grant/10-27-17

Gold remains defensive at the low end of the recent range, weighed by heightened risk appetite and a stronger dollar. Support in the yellow metal is well defined by the 1260.10 (06-Oct low).

U.S. advance Q3 GDP came in better than expected at 3.0%, essentially unchanged from +3.1% in Q2. This will help justify persistently elevated expectations for a December rate hike, even though the absence of inflation continues and that’s the “mystery” that prompted the Fed to pause in September.

The BoJ faces the same problem with October CPI coming in at +0.7% y/y. Don’t expected any move toward tighter policy anytime soon.

The dollar is rallying based on anticipated widening of interest rate differentials. Most of the world continues to lean toward easier policy, while the U.S. is in the midst of a tightening cycle (Sep pause notwithstanding). These dollar gains are keeping a lid on gold for now.

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The Morning Snapshot: Gold remains consolidative below $1300

USAGOLD/Peter Grant/10-26-17

Gold continues to consolidate below $1300 after ECB policy came in as expected: Steady on rates and smaller QE for longer. Mario Draghi’s press conference is ongoing.

U.S. initial jobless claims rebounded 10k last week, but the print was still below expectations. The trade gap widened in-line with expectations.

There are reports circulating this morning, citing Politico, that Janet Yellen and Kevin Warsh are out of the running for Fed chair. That may mean that the field has narrowed to John Taylor and Jerome Powell.

The dollar index is probing back above 94.00, buoyed by a dovish ECB and the resulting weaker euro. That is keeping gold defensive. Political and geopolitical tensions continue to provide support.

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Morning Snapshot: Gold steadies as dollar gains stall

USAGOLD/Peter Grant/10-25-17

Gold is maintaining a generally consolidative tone within the recent range, as gains in the dollar index stalled ahead of head of important resistance at 94.00/14. The yellow metal needs to reclaim $1300 to ease short term pressure on the downside and return confidence to the dominant uptrend.

A better than expected Q3 GDP print for the UK sparked a rebound in Sterling, amid reinvigorated hopes that the BoE will raise rates next week, for the first time in more than a decade. This has weighed on the dollar.

U.S. data today were generally positive with durable goods orders, new home sales and home prices all beating expectations. The Bank of Canada will announce policy today (steady expected) and the ECB is up tomorrow.

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Morning Snapshot: Gold retreats into range as stocks lurch higher

USAGOLD/Peter Grant/10-24-17

Gold has retreated into the range once again as stocks lurch higher. The dollar is firmer this morning as well, but solid resistance in the dollar index at 93.99/94.14 remains intact.

Political and geopolitical tensions continue to be seen as supportive for the yellow metal. The government of Catalonia is expected to respond to Spain’s demands on Thursday. Japan’s Defense Minister categorized the North Korea threat as having “grown to the unprecedented, critical and imminent level.”

Today’s U.S. economic calendar is light today with Markit PMIs for October and the Richmond Fed index. Tomorrow the BoC will announce policy, followed by the ECB on Thursday.

Both policy decisions and the guidance will be interesting, as recent data — particularly weak inflation — may have derailed tightening plans. If easier policy prevails, the Canadian dollar and euro may come under further pressure.

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Morning Snapshot: Gold remains defensive to start week

USAGOLD/Peter Grant/10-23-17

Gold remains under pressure as risk-appetite remains elevated, driving global shares higher. Last week’s passage of a 2018 budget resolution by the Senate further stoked hopes for President Trump’s proposed tax cuts.

Spanish Prime Minister Mariano Rajoy said over the weekend that he would seek to dissolve the Catalonian government under Article 155, thereby ending the region’s autonomy. The EU fell in line with Spain’s central government. However, Catalan foreign affairs spokesman Raul Romeva said, “the people and the institutions in Catalonia will not let this happen.” It would appear that a showdown is brewing.

Shinzo Abe has consolidated power as a result of the weekend snap election. Abe-nomics will continue, but he is also expected to modify Japan’s pacifist Constitution so that he can “deal with North Korea.” Japan needs to be able to defend itself, but this could mark the beginning of a new Asian arms race.

The U.S. calendar is very light today. The highlight of this week will be the ECB rate decision on Thursday.

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Morning Snapshot: Gold softens as advancement of budget/tax reform stokes risk appetite

USAGOLD/Peter Grant/10-20-17

Gold is back on the defensive within the range after the Senate narrowly passed the 2018 budget blueprint by a 51-49 vote. This bolsters hope that the GOP proposed tax reform will be advanced as well, prompting a rebound in risk appetite; as reflected by higher stocks.

Yields have rebounded as well, pulling the dollar higher, which has in turn pressured the yellow metal. The budget blueprint allows $1.5 trillion to be added to the deficit over the next 10-years. This is one of the keys to President Trump’s tax cut, borrow and spend reflation agenda.

Geopolitical risks are likely to limit the downside. Spain is expected to terminate Catlonia’s autonomy tomorrow. CIA Director Pompeo and National Security Advisor McMaster both seemed to suggest a heightened possibility of a military confrontation with North Korea at a security forum on Thursday.

The U.S. calendar is light today with just September existing home sales (-0.9% forecast) and Treasury Budget for September. We’ll also hear FedSpeak from Mester and Yellen.

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Morning Snapshot: Gold jumps as Spain prepares to revoke Catalonia autonomy

USAGOLD/Peter Grant/10-19-17

Gold is rebounding today and has already exceeded yesterday’s high amid reports that Spain will move to rescind Catalonia’s autonomy today. This unprecedented move has sapped risk appetite, weighing on global shares and pushing yields and the dollar lower.

Spanish PM Mariano Rajoy said that Article 155 would be invoked today, asserting direct rule over Catalonia. Rajoy says Spain seeks to “restore the constitutional order.” Put another way, this move seeks to crush the independence movement, but I doubt the separatist will go quietly into the night.

Again, it’s interesting to watch the dollar come under pressure at times of heightened geopolitical tensions. There was a time, not so long ago, when the dollar was THE safe-haven currency. That is no longer the case.

U.S. economic data were mixed this morning. Initial jobless claims fell 22k last week. The Philly Fed index for October came in much better than expected. However, leading indicators fell 0.2% in September, below expectations of +0.1%.

We’ll hear FedSpeak from Ester George later this morning as well, as prospects for a December rate hike remains elevated.

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Morning Snapshot: Gold remains defensive as dollar/yields rise

USAGOLD/Peter Grant/10-18-17

Gold remains defensive after recent gains above $1300 faltered as talk about a potentially hawkish replacement for Janet Yellen began to circulate. That story continues to play out this morning, buoying yields and the dollar and pressuring the yellow metal.

As I wrote in yesterday’s DMR, appointing a hawk like John Taylor to chair the Fed risks derailing any hope that President Trump’s reflation agenda gets off the ground. What Mr. Trump really needs is an unabashed dove like Janet Yellen, or as DoubleLine Capital’s Jeff Gundlach speculated last week, Neel Kashkari.

U.S. housing starts and permits plummeted in September, well below the expectations of analysts who were already expecting a hurricane related slow down. Later today we’ll see EIA crude stocks and the Beige Book. FedSpeak from Dudley and Kaplan is already trickling out of a moderated discussion on economic development.

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Morning Snapshot: Gold retreats into range as dollar firms

USAGOLD/Peter Grant/10-17-17

Gold retreated into the range after failing to sustain recent probes above $1300, as the dollar firmed. However, political and geopolitical risks are still seen as supportive underpinnings to this market.

U.S. trade prices came in hotter than expected for September, with a 0.7% gain for imports and a 0.8% rise in export prices. Higher energy prices associated with the hurricanes contributed to the rise in import prices. While these gains may prove temporary, these data bolster the position of the policy hawks on the FOMC calling for a December rate hike.

Look for the probability of a rate hike to go back above 90%, which is pushing the dollar higher. However, with expectations already all-but a sure thing, there’s not much more room for improvement and gold has been holding up pretty well. There’s also still plenty of time before that December meeting.

U.S. industrial production rose 0.3% in September, in line with expectations, versus an upward revised -0.7% in August (was -0.9%). Cap use edged up to 76.0%, from a negative revised 75.8% in August (was 76.1%).

Later this morning we’ll see the NAHB housig market index for October, Treasury budget for September and August TIC data. We’ll also hear FedSpeak from Philly Fed’s Harker.

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Morning Snapshot: Gold firm above $1300

USAGOLD/Peter Grant/10-16-17

Gold remain well bid above $1300, having ended last week on an upswing. The next technical hurdle is defined by resistance at 1308.80/1313.62. A breach of this level would return confidence to the dominant uptrend.

The dollar index is modestly higher, but momentum on recent uptricks has been lackluster. Fed funds futures suggest the probability of a December rate hike remains near 90%. These factors are limiting the upside.

North Korea has renewed its threat to fire missiles toward Guam as U.S. and South Korean forces begin new naval drills. Spain is still waiting for clarification from Catalonia as to whether they declared independence or not last week. If they did, or they do not respond by Thursday, Spain has threatened to impose direct rule.

The U.S. calendar is light today. NY Empire State index surged to an 8-year high of 30.2 in October, well above expectations of 20.0, versus 24.4 in September. September Treasury budget is out this afternoon

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Morning Snapshot: Gold pops back above $1300 after data

USAGOLD/Peter Grant/10-13-17

Gold jumped back above $1300 after a tame core CPI print for September, shows that the Fed continues to face an inflation problem. Headline inflation rose 0.5%, the biggest m/m jump since January, but it was still below expectations of +0.6% and attributed to hurricane distortion.

Like PPI yesterday, higher energy prices in the wake of the recent hurricanes pushed the broader measures of inflation higher. However, these gains are unlikely to be sticky.

This morning’s gains put the yellow metal decisively back above the entire 20-, 50-, 100- and 200-day moving average complex, returning considerable credence to the underlying uptrend. Next resistance is at 1308.80, the halfway back point of the decline off the September peak at 1357.50.

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Morning Snapshot: Gold re-approaches $1300

USAGOLD/Peter Grant/10-12-17

Gold re-approached the $1300 level in overseas trading, buoyed by heightened geopolitical tensions and a toppy-looking dollar. The yellow metal has retreated modestly intraday in the wake of warmer than expected inflation data.

U.S. PPI rose 0.4% in September, stoked by hurricane distortions and in line with expectations. Core PPI jumped +0.4% as well, which was above expectations of +0.2%.

Initial jobless claims fell 15k last week, suggesting that the hurricane effect on labor may already be reversing. However, it remains to be seen if that will be sufficient to reverse the existing downtrend in payrolls that had developed long before this hurricane season.

A move back above $1300 would put gold above the 20- and 50-day moving averages, returning confidence to the dominant uptrend. The halfway back point of the recent correction comes in at 1308.80.

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Morning Snapshot: Gold consolidates below $1300

USAGOLD/Peter Grant/10-11-17

Gold is consolidating below the $1300 level as traders await the minutes of the September FOMC meeting. Geopolitical tensions and a softer dollar are seen as being supportive to the yellow metal.

The Fed paused the recent tightening cycle in September amid persistently sluggish inflation. The minutes will perhaps provide some additional clarity as to just how concerned the members are and if current market expectations for a December hike are realistic.

Recent gains in the dollar index stalled well shy of the 100- and 200-day moving averages. The trend is still down and negation of this 92.90/88 support level would return considerable confidence to that trend, which should push gold higher.

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Morning Snapshot: Gold more than $30 off Friday’s low

USAGOLD/Peter Grant/10-10-17

Gold extended to the upside in overseas trading amid rising geopolitical risks and mounting concerns that the President is going to have difficulties passing tax reform. The yellow metal is up more than $30 since hitting an 8-week low at 1260.10 on Friday.

Catalonian President Puigdemont is slated to address parliament today and is expected to declare independence from Spain, or at least a movement toward independence. Spanish PM Rajoy has vowed that “Spain will not be divided” and that he is prepared to employ “all means” within the law to preserve national unity.

Bloomberg has reported that Spanish National Police are in place and prepared to arrest Puigdemont. If the Catalan police attempt to shield Puigdemont, there is the risk of violence. However, it is the longer-term and broader implications for Spain and Europe that are of concern to markets.

The Hill reports this morning that based on recent rhetoric, Kim Jong Un may believe that a U.S. decapitating strike is imminent. That may prompt the North Korean leader to launch a preemptive strike.

There is growing concern that President Trump’s tax reform plan is losing momentum. This had been a big driving force in the stock market rally as investors salivated over the proposed corporate tax cut. This is a must-win issue for the President, given the failure of repeal-and-replace and the lack of progress on immigration reform and the the wall.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |

Morning Snapshot: Gold firms on geopolitical risks, “startling” drop in U.S. payrolls

USAGOLD/Peter Grant/10-09-17

Gold starts the week at a 5-session high after finding support on Friday at the 1260.00 level in the wake of September’s negative nonfarm payrolls print. Heightened geopolitical tensions are also providing support to the yellow metal.

St. Louis Fed President James Bullard called the negative NFP number “startling” and said more data were needed before committing to a December rate hike. Nonetheless, Fed funds futures continue to suggest the probability of a rate hike is all-but a sure thing.

There will be quite a bit of FedSpeak again this week. We’ll see if anyone else is troubled by the deterioration in the labor market. As noted in commentary on Friday, the trend in payrolls rolled over long before this hurricane season.

Geopolitical tensions are on the rise again amid expectations of an impending North Korean missile tests. The UK is reportedly developing a war plan as such a test may result in a U.S. military response.

The Treasury market and the Fed are closed today for Columbus Day. However, Chinese investors are back in the mix after the long Golden Week/National Day holidays.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |