Evening Gold Commentary-Jul 16th, 2013

Evening Gold Commentary-Jul 16^th, 2013

 

1: Market Review

Evening Market Review
	Last Close	Open	Close	High	Low	Change	Change%
Gold	1281.8	1281.6	1290.4	1294.7	1275.6	8.6	0.67%
Silver	19.84	19.9	19.97	20.04	19.66	0.13	0.66%
Crude oil	106.47	106.44	105.77	107.18	105.66	-0.7	-0.66%
US dollar index	83.07	83.071	82.498	83.152	82.39	-0.572	-0.69%
5yr Treasury	1.39%	1.36%	1.37%	1.38%	1.35%	-0.02%	-1.44%
30yr Treasury	3.61%	3.57%	3.58%	3.60%	3.57%	-0.03%	-0.83%
3-month LIBOR	0.27%	0.27%	0.27%	0.27%	0.27%	-	-
S&P 500	1682.50	1682.70	1676.26	1683.73	1671.84	-6.24	-0.37%
DJIA	15484.26	15485.03	15451.85	15498.16	15415.71	-32.41	-0.21%
NASDAQ	3607.49	3611.00	3598.50	3611.35	3589.65	-8.99	-0.25%
FTSE	6586.11	6586.11	6556.35	6606.42	6556.35	-29.76	-0.45%
DAX	8234.808	8251.51	8201.049	8252.25	8178.189	-33.76	-0.41%
CAC40	3878.58	3881.99	3851.03	3884.639	3846.82	-27.55	-0.71%

 

2: Fundamental

 

1 Gold futures gained for the sixth time in seven sessions as the dollar’s drop increased demand for the metal as alternative investment on speculation that the Federal Reserve will maintain its monetary stimulus.-- Debarati Roy & Nicholas Larkin(Bloomberg)

2 Goldman Sachs Group Inc. (GS) said earnings doubled, beating analysts’ estimates on a surge in underwriting revenue and gains from the firm’s own investments.-- Michael J. Moore(Bloomberg)

3 AngloGold Ashanti Ltd. (ANG), the world’s third-biggest producer of the metal, cut its output forecast for this year and will write down the value of assets by as much as $2.6 billion after reducing gold-price forecasts.-- Thomas Biesheuvel(Bloomberg)

4 Homebuilder confidence in the U.S. rose more than forecast in July to the highest since January 2006 as companies grew more upbeat about sales prospects.-- Jeanna Smialek(Bloomberg)

5 Barclays Plc (BARC), Britain’s second-largest bank by assets, hired Tushar Morzaria from JPMorgan Chase & Co. (JPM) to replace Chris Lucas as chief financial officer.-- Howard Mustoe & Ambereen Choudhury(Bloomberg)

6 Headline inflation at the consumer level jumped in June-largely on energy. Meanwhile, the core rate held steady. The consumer price index for June surged 0.5 percent, following a modest rebound of 0.1 percent in May. The latest number came in higher than the consensus forecast for 0.4 percent. The core CPI-excluding food and energy-increased 0.2 percent, matching the pace in May. Expectations were for a 0.2 percent increase.—Bloomberg

 

7 Industrial production regained some momentum in June after weak numbers in April and May. Overall industrial production rose 0.3 percent, following no change in May (originally unchanged) and a 0.3 percent decline in April. Expectations were for a 0.2 percent advance.--Bloomberg

 

3: Technical Analysis

 

Today, the COMEX August Gold Future contract fluctuated and increased the whole day and gained a moderate increase, ending at $1290.40, or increased by 0.67%.The trading is stable and without rocketing or diving. After the “Golden Cross” formed by MA5 and MA10 four days ago, now the tread is clearer and more optimistic. The other MAs are still in a bearish position. Candlestick has a thin green body, with extremely short upper and lower shadow. The volume is 10%more than yesterday’s volume.

First support level: $1220                   Strong support level: $1180

First resistance level: $1300               Strong resistance level: $1350

MACD: The DIFF and DEA are both negative, which means it’s still a bearish market by now.

KDJ: The value of K is 84.076, which is over 80. It means investors should consider cutting the long position or opening short position. The value of J implies the same signal, which is 101.135˃100.

Bollinger bands: The candlesticks are moving above middle BB, showing the market is still getting strong. Furthermore, the spaces between upper, middle and lower BB is shrinking, which tells investors the bottom is forming.

4: Opinions and Expectations

 

1 The rand declined for the first time in three days as gold-mine workers rejected a proposal at the start of wage negotiations in the industry, fueling concern that labor disruptions may weigh on exports and economic growth.-- Robert Brand(Bloomberg)

2 Citigroup posted a surge in profit from a strong securities business, but executives warned that a slowdown in emerging markets could weigh on the company’s results later this year.--WSJ

3 Retail sales in the U.S. grew a softer-than-expected 0.4% in June, with consumers buying more cars but mostly cutting back on other nonessentials.--WSJ

4 Putin said he hopes NSA leaker Snowden leaves Russia and that the situation doesn’t hurt relations with the U.S.--WSJ

 

5 Mortgage rates have jumped in recent months. As of Thursday, the rate on a 30-year-fixed mortgage was 4.51%, more than a percentage point higher than the 3.35% seen in early May. The increase has snuffed out refinancing and some economists fear it could slow home-buying activity. Even at these higher rates, homes remain more affordable than they have been in decades.--WSJ

 

5: Tomorrow’s Focus

 

1 Federal Reserve Chairman Ben Bernanke to testify before the House Financial Services Committee in Washington.

 

2 Housing Starts

       Prior                      Consensus                          Consensus Range

Starts - Level - SAAR                       0.914 M                0.951 M                                0.915 M to 0.985 M

Permits - Level - SAAR                   0.974 M                0.990 M                                0.975 M to 1.010 M

 

6: Important Charts

 

COMEX GOLD August

 

Key Economic Data

Crucial Economic Data
	June	May	April	March	S1, 2013	2012
GDP		-	-	-                 -	1.80%	2.20%
CPI	0.50%	0.10%	-0.40%	-0.20%	-	1.70%
Fed Reserve Target		0.25%	0.25%	0.25%	0.25%	0.25%
ECB key rate		0.50%	0.50%	0.75%	0.75%	1%-0.75%
Unemployment rate	7.60%	7.60%	7.50%	7.60%	-	-