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Printer Friendly VersionGood morning …
Precious Metals
Gold traded lower for most of the day, but gained a little steam after the noon hour and finished on an up note at $812.80, down 90 cents. Overnight, gold has pushed higher.
Platinum traded within a $25 range all day, but closed at the high end of it at $1366/oz., up $21. Overnight, platinum is trending higher.
Silver was down until the late morning, but it too found buyers in the afternoon hours, and they propelled it back to even at $13.25/oz., up a penny. Overnight, silver is sharply higher.
It was a blah day for the metals, with the dollar gaining and then falling, and crude slumping early before rallying back.
Julian Phillips, of goldforecaster.com, provided an in-depth look at what’s been happening in the market lately:
“Gold,” Phillips wrote, “bounced off strong support strongly today as we come to the close of the quiet season for gold and enter the main annual gold season in the final quarter of the year. Many
“The main driver of gold of late has been
“The malaise of the
“The
“This translates into slower capital investment into the States from Asia and the
“Gold and silver are nearing the end of the savage correction they have endured. With silver the 'long shadow' of gold falling further on the decline we would expect it to outperform gold going forward, particularly as we see investment demand in that metal appearing ahead of that demand in gold.”
Currencies and Economic News
In the currency market, the dollar wound up higher against the euro. Late Wednesday, the euro was trading at $1.4745 vs. $1.4785 on Tuesday.
Traders’ focus returned yesterday to concerns about the economic health of the eurozone.
“Technical indicators on [euro/U.S. dollar] suggest that there is potential for a further rise towards $1.4875-1.4900 in the short term,” wrote strategists at Jyske Bank.
“However looking a bit further ahead, there is no doubt that the trend [for the euro/dollar cross] is down,” they said.
Meg Browne, a senior currency strategist at Brown Brothers Harriman & Co., put forth the case for a stronger dollar, saying that, “In the long term, the tectonic plates of the market have shifted. The markets are coming around to the idea that the
But sentiment that the Fed might raise interest rates soon, to combat inflation, appears to be receding.
The futures market on the Chicago Board of Trade now shows only a 21% chance that the Fed will raise its target rate for overnight lending between banks by at least a quarter-point by its December 16 meeting. That’s down from 35% odds a week earlier.
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| Inflation is coming. That will be the result of the Government’s “plans” to bail out banks, car companies, and anyone and everyone who asks for a handout. |
Energy
In the energy market Monday, crude for September delivery ended its reign as front-month contract by moving slightly higher, closing at $114.98/barrel, up 45 cents. September reformulated gasoline added 4.6 cents, to $2.9103/gallon.
“Crude-oil imports rose by their largest weekly amount since March as oil barges flooded the Gulf shipping channel once Tropical Depression Edouard fizzled,” wrote Chris Lafakis, of Moody's Economy.com.
“The surge in crude-oil imports, coupled with depressed levels of refinery activity, resulted in a colossal rise in crude oil inventories; the largest in seven years.”
In its weekly inventory report, the Energy Information Administration said that crude supplies rose by 9.4 million barrels in the week ended August 15. Gasoline stocks fell by 6.2 million barrels, the EIA said, and distillates were up 500,000 barrels. Refinery utilization fell to 85.7% of capacity, compared with 85.9% a week earlier.
The “depressed level of gasoline demand has rendered [refineries] increasingly reluctant to process crude oil,” said Lafakis.
Base Metals
The base metals were mixed on Wednesday. Copper rose until just before the noon hour, cresting above $3.51, then hit a sudden vicious selloff that plunged it into negative territory, finishing at $3.4293/lb., down nearly 4˝ cents. Nickel was up strongly in the pre-dawn hours, then held up well through
Copper declined despite hints that
Imports could jump to between 100,000 metric tons and 120,000 tons a month, from 75,707 tons in June, Zhou said. The June figure was well below the monthly average of 114,502 tons in the first half.
“Watch out for a sharp pick-up in demand” from
But that anticipation wasn’t enough to counter the reversal in crude prices after the inventory report, and the strength in the dollar.
Meanwhile, zinc was held back on concerns that supply will outpace demand for a second consecutive year. The zinc surplus widened in the first half of this year to 72,000 metric tons, vs. a year ago, according to the International Lead and Zinc Study Group.
“Zinc is struggling to hold on to any gains it's made because supply fundamentals don't support a rally,” said Gayle Berry, of Barclays Capital in
Barclays estimates that zinc production will exceed demand by 95,000 tons this quarter.
That’s what’s happening … see you tomorrow!
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Learn more about Phoenix Matachewan.
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