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: With the Dollar a touch higher this morning, it is not surprising to see a bit of early divergence between gold and silver prices. With global equity markets not giving off definitive direction overnight and UK retail sales data somewhat soft overnight, physical commodities in general seem to be facing some minor macro economic adversity. With the US initial claims figures expected to forge a minimal rise later this morning, the fear of slowing looks to remain in the headlines in a number of markets. However, as the US data flow progresses today, it is possible that the outlook for the US might improve slightly, as the trade generally expects to see a positive leaders figure and an improvement in the Philly Fed readings. While the US Treasury Secretary is also scheduled to testify on financial reform this morning, there doesn’t seem to be expectations of a definitive link between the House testimony today and precious metals price action.
GOLD MARKET FUNDAMENTALS: The bull camp might be stirred by the early attempt to run above this week’s consolidation high zone of $940.6, but the bear camp will suggest that the market was unable to sustain that strength. Perhaps the initial strength was the result of favorable Indian demand talk overnight or perhaps even off favorable press coverage of solid gold bar sales through vending machines in Europe! Apparently the gold trade remains mostly uninterested in the status of talks between South African miners and the South African gold mining companies, but seeing the unions press for quicker results could be seen by some as a bullish development, as that could point to impatience and perhaps eventual conflict between the parties. However, the gold market has recently seemed to be somewhat focused on the ebb and flow of the economic outlook, which of late, seems to be tending more toward slowing than toward growth. It is also possible that gold is deriving a minimum amount of support this morning, from news that weekly Russian gold and currency reserves declined. However, with inflationary expectations seemingly tamped down in the wake of US inflation readings and general weakness in oil prices, it would seem like the inflation hawks are being undermined from a number of angles. Therefore, the action in the equity market and the action in the US Dollar both look to be dominating forces for the gold market today.
