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!
GOLD MARKET FUNDAMENTALS: While the gold market is not seeing evidence of falling gold held in trust readings this morning, gold prices overnight were weak again. With the press full of references to profit taking and April gold in the early going today already taking out the prior session’s lows, one could suggest that the bear camp does have some form of a technical edge. In fact, with some very weak European economic news released overnight and several press outlets this morning touting the prospect of deflation in their headlines again, one almost gets the sense that some of the declines in gold prices this morning are coming from fears of deflation and or fears of too much slowing. With the US Treasury Secretary speaking yesterday and then again on Thursday, it is also possible that some gold bulls are fearful that the US “bank plan” is actually forming and that in turn probably serves to tamp down the flight to quality theme even further. Some traders suggest that the recent positioning report in gold served to undermine the trade, but with the combined net positioning in gold actually showing a contraction in the net long position from the prior week’s reading, and April gold this morning at one point falling below the level where the latest COT report was measured, it is likely that the net spec long positioning is being brought down and that in turn could temper the amount of long liquidation ahead.
OUTSIDE MARKET DEVELOPMENTS: With the only scheduled data point out of the US today, coming in the form of a Wholesale trade reading, it would seem like the focus of the precious metals markets will be partially focused on a slight up tick in global risk appetites. Not surprisingly a slide in the US Dollar is being mostly ignored by the metals markets this morning, and therefore it could take a slide and close below the 88.00 level in the March Dollar index before the metals trade gives any credence to the overall action in the Dollar. It also wouldn’t seem like firmer equity market action this morning is providing any support to the gold and silver markets this morning and that seems to extend a recent pattern of almost no direct correlation at all between precious metals and stock prices. In short, flight to quality and safe haven issues seem to have drifted onto the back burner and with Citi Group supposedly posting a profit for the first two months of 2009, it is possible that the market will attempt to tamp down the flight to quality angle even further. Just to add to the potentially negative bias today, the Chairman of the US Federal Reserve is expected to speak today and his recent dialogue has lent support to equities and has seemingly undermined the precious metals.
