Market Updates

Good morning everyone.

The precious metals, having spent their time since mid-December shrugging off regular record highs in US equity markets and instead taking their cues from a backpedalling Greenback to advance strongly, were taken to with a 4x2 overnight in late trade in what was an extremely choppy day. HFT Algo’s piled in and hoovered up US dollars when news hit the wires of Apple’s intention to repatriate its offshore profits and consequently make an estimated USD 38 billion one-off tax payment (likely the largest of its kind).  Additionally, the technology behemoth sketched out its plans to invest more than USD 30 billion to expand its US operations as a result of the recent tax cuts (including construction of a new US campus, data centres and the creation of more than 20,000 jobs, leading to a $350bn “direct contribution” to the American economy over the next five years).

Hello everyone.
 
The progress of US President Trump’s (and the Republican party’s) tax reforms held sway over the markets and related uncertainty fed into a weak US Dollar Index throughout much of yesterday’s trade, allowing gold and silver to advance by the close of business in spite of buoyant US equities markets.
 
That was basically the long and short of it, as the saying goes.

Cryptocurrencies have been in the news again this week, with RBA governor Phillip Lowe describing Bitcoin as a speculative mania!

Following on from his detailed report titled “Bitcoin, Dollars, Gold: What is the Future of Money” – ABC Bullion Chief Economist Jordan Eliseo has been invited to discuss the topic in a number of forums, including a recent podcast hosted by Livewire Markets, one of the leading financial news sites in Australia.

Hello everyone.
 
Gold and silver (in both USD and AUD terms) experienced what is commonly known as a “buy the rumour / sell the fact” rebound (or in this specific instance a “sell the rumour / buy the fact” bounce), as profit taking / shortcovering emerged when the US Federal Reserve confirmed a widely anticipated (and priced in) Fed Funds rate increase by announcing a 25 basis points hike at the conclusion of its FOMC monetary policy meeting. Additionally, guidance for next year suggested the likelihood of at least three more interest rate increases. The US central bank also signalled its intention to keep to its commitment to increase its monthly balance sheet runoff to $20b in Jan.

Hello everyone,
 
The bad news for precious metals (and specifically gold investors) is that some major support levels have ceded over the past few sessions with “risk on” being the trade du jour, spurred on by robust economic progress from the world’s largest economy, the USA. If a picture says a thousand words, then the attached charts for the US Dollar Index (DXY), the Dow Jones Index and the phenomenon that is Bitcoin, speak volumes. So too does the latest Commitments of Traders data as at December 5th (see table below) which portrays significant levels of long liquidation across the complex but especially in gold and silver.

Good morning everyone.
 
Mixed trade was seen in gold on Wednesday, while silver and platinum were pressured lower.
 
Gold slipped modestly after the release of the latest private U.S. ADP National Employment Report (Nov) which came in +190K and even though the all-important 200 Day moving average was penetrated, any sustained unravelling was prevented due to the US government funding and debt ceiling issue remaining unresolved.

The gold price broke below the key 200 day moving average this week, with the yellow metal currently trading just below USD $1,265oz. There is support at these levels, though a move down toward USD $1,250z can’t be ruled out.

Silver is also considerably weaker, having dropped below USD $16oz, down over 5% since the start of the week, with the gold to silver ratio (GSR) now approaching 79:1.

Good morning everyone.

Gold traded to its lowest level since August 9th in USD terms as the markets remained confident that the US Tax Reform legislation presently making its way through both Houses of government, will be passed before year end. ‘Risk on’ investor sentiment was thereby stoked as the US Dollar was driven higher against its major pairs.

Hello everyone,

Precious metals markets were ambling into the weekend on Friday until financial markets were thrown into late turmoil when a bottom-feeding ‘journalist’ from ABC News (US) ran a fraudulent story that former National Security Adviser in the Trump Administration, Lieutenant General Michael Flynn, would be testifying that then candidate Trump had ordered him to engage with Russian officials (thereby validating the “Russian Collusion” narrative), when in fact, Lieutenant General Flynn had been instructed to engage with Russian officials by President-elect Trump during the transition period as part of the normal (and legal) business of government.
 
The Dow Jones Industrial Average shed 390 points on the basis of the irresponsible falsehood as ABC News sat on a retraction for hours. XAU/USD rallied from 1271.50 to just short of 1290.00 before rolling over (and then gapping lower on this morning’s Far Eastern open). The US dollar was also crushed against all the major currencies on the back of the initial report.
 
This most recent example of (intentional) erroneous reporting underscores the agenda-driven approach and blind hatred of the US mainstream media towards President Trump and validates his placing the “Fake News media” directly in his crosshairs, as well as totally debasing any of their contributions.

Good morning everyone.
 
Gold and silver continued their southern drift on Thursday, pressured lower by the Dow Jones Industrial Average registering a record high above 24,000 and a spike in US Treasury Yields due to the shortening of odds in favour of the Republican Tax Reform Bill succeeding. Also weighing, were hawkish monetary policy comments from outgoing US Federal Reserve Chairman, Janet Yellen on the back of the seemingly robust US economy.

It’s been a mixed week for precious metals bulls, with the price of gold originally retesting the crucial USD $1,300oz mark, before pulling back to current levels around USD $1,285oz.
 
Silver has also suffered mixed fortunes, trading north of USD $17oz before an overnight pullback saw the metal fall to USD $16.50oz.
 
The proximate cause of last night’s pullback was a better than expected revision for Q3 GDP.

Good morning everyone.
 
XAU/USD was driven back down into the middle of its well-established 1265 to 1295/1300 range on Wednesday, finding support between its 21 & 100 Day moving averages at 1282 - 1285. The trigger for the retreat was a revision to 3rd Quarter US GDP data which at 3.3%, came in marginally above market expectations and delivered the strongest GDP result in 3 years.
 
The late in the session news yesterday of a North Korean missile launch was effectively shrugged off by the markets with President Trump casually remarking “We’ll take care of it.”

Good morning everyone.

Precious metals markets saw sideways, choppy, rangebound price action on Tuesday in spite of:
 
US equities continuing to scale record highs, fuelled by progress in the US Senate to advance the Republican tax bill.
Late reports of North Korea launching a missile 4.5 kms into the air which eventually fell into the Sea of Japan and which was claimed by the Pentagon to have been an ICBM.

Good morning everyone.
 
Having posted strong gains on the back of Greenback weakness (particularly against the JPY) on Friday, news on Monday that a breakdown in negotiations between the various parties in Germany that were attempting to form a coalition government resulting from September’s election, saw the precious metals rally deflate quicker than the Hindenburg, as the EUR was kicked to the curb and investors were herded back to the safety of the US dollar.

Over the last few weeks, ABC Bullion Chief Economist Jordan Eliseo has been busy preparing a key research report on Bitcoin, Gold and Cryptocurrencies.

This report covers key topics, including:

• The reasons behind the creation of Bitcoin

• The potential for blockchain technology

• A comparison of the monetary qualities of gold, versus fiat currencies and Bitcoin

• Why investors should be nervous about chasing price gains in cryptocurrencies

• Questions investors should ask about the monetary potential of Bitcoin and other cryptocurrencies

• Why gold likely remains the best protector of wealth in an uncertain market environment

For anyone interested in money, be it gold, US Dollars or cryptocurrencies, this report is a must read.

Click the image below to view the full report.

The fragility in the Australian consumer sector was underscored this week by yet another weak set of wages data, with the wage price index coming in well below what the market was expecting, sending the Australian dollar tumbling.

By John Feeney, ABC Bullion

On Monday 30th October, ABC Bullion was fortunate enough to interview Jim Rickards, one of the world’s leading precious metal analysts and author of New York Times bestsellers including the Death of Money, and Currency Wars.

Jim, who’s joining ABC Bullion for the Emirates Melbourne Cup at Flemington, caught up with ABC Bullion's Chief Economist Jordan Eliseo in Custodian Vaults, where he shared his views on a variety of topics, including;

• The performance of gold in 2017 – and how he expects the year to finish

• US Monetary Policy, and what is next for the Fed

• Developments in Catalonia, and their impact on the Euro

• The outlook in China, and how that could affect the Australian economy and AUD

• The potential for military conflict in Korea

• Gold price drivers between now and the end of 2018

Good morning everyone.
 
Thursday saw a few more items ticked off the week’s ‘bucket list’ but gold and silver held station within recent ranges.
 
First cab off the rank was the Bank of England monetary policy announcement. The central bank raised rates (for the first time in ten years) from 0.25% to 0.5% and indicated its intention to move aggressively by hiking 0.25% twice more over the course of the next two years (<sarc off>).

Good morning everyone.
 
Choppy trading within the recent range for precious metals was seen in reaction to the release of a raft of economic data and ahead of the US Federal Reserve’s FOMC monetary policy statement, which ultimately saw the FOMC vote unanimously to leave interest rates unchanged, in line with market expectations.
 
On the economic data front;

• U.S. ADP (Oct) came in +235K (vs +200K expected & negative revised +110K for Sep which was previously +135K)

• U.S. Construction Spending (Sept) was +0.3% (vs Unchanged expected & negative revised +0.1% for Aug which was previously +0.5%)

• U.S. ISM (Oct) came in at 58.7 (vs 59.4 expected and 60.8 in Sep)

It’s been a tough few weeks for precious metals bulls, with the price of gold declining to USD $1,275oz, now down nearly 6% from the levels it was trading at in early September. It has been a similarly tough run for silver, which was trading above USD $18oz barely two months ago, but is currently sitting at just USD $17.20oz, with a substantial overnight rally limiting the decline.
 
A rally in the US dollar, which had been falling for most of the year, has been a major factor pulling gold lower, as has the continued run of all time highs in global stock markets, whilst expectations of a December rate hike by the US Federal Reserve are also pressuring bullion.

Good morning everyone.
 
Mixed trade on Monday saw gold and silver in USD and AUD terms firm modestly as investors understandably took a “wait and see” approach and strapped themselves in ahead of a hectic week that includes;
                                      
MonPol announcements from the Bank of Japan on Tuesday, the US Federal Reserve on Wednesday and the Bank of England on Thursday.
 
An expected announcement by US President Trump (prior to his departure for an 11-day trip through Asia on Friday), nominating the next Chairman of the US Federal Reserve. Market consensus strongly favours Jerome Powell (a current member of the Federal Reserve Board of Governors) succeeding in receiving the nomination to the prestigious and all-important post over Stanford University Economics Professor John Taylor.