Posts Tagged ‘economy’

US Data & Need for Fed Clarification Send Gold Futures Soaring

Gold futures have blasted-off today reportedly once mixed domestic data highlighted uncertainty with the Federal Reserves timing of their next rate hike. Gold futures are up $22.40 per ounce currently trading at $1,153.90 at the New York Commodity Exchange.

The US Commerce and Labor Departments both released information such as initial jobless claims, durable goods orders (and “core” durable goods orders), orders & shipments for core capital goods, which came in outside analysts projections, but also revisions from previous reports were eye-openers for the gold trade. Later today, the Federal Reserves Chairwoman will be delivering a speech that investors will be listening to that may provide clarity on last week’s decision to keep interest-rates steady.

The trend for gold has been back and forth with big swings in the past month, and is now at a crossroad to switch back up. Gold futures will require a little more action to the upside to change the direction to up in my work, however.

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Slowing Demand for Supply Weighing on Copper Futures

Copper futures are said to be spiraling lower not only because demand has been hampered for the raw material, but now there’s confirmation of that by the lack of requests to withdraw copper from the London Metal Exchange warehouses – the lowest since March, 2013. Copper futures is down $4.50 per pound today (as of this writing), currently trading at $2.38 at New York’s Mercantile Exchange.

Copper is used in many things in our daily life, such as car’s, electronic devices and power lines, but stockpiles of the industrial metal have reportedly doubled over the last two years as consumption has all but dried-up. China, the world’s biggest copper consumer, is experiencing slower economic growth hampering demand for the metal, but they are just one country of many.

Copper futures trend is clearly down with no bottom in sight. A bounce higher should be required before traders even consider taking a short position because the risk (volatility) is quite high.

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Gold Futures Lagging on Greek Restructuring & US Data

Gold futures are down for the fourth straight trading session after mixed-signals with the US economy and the unfolding of the Greek debt crisis. Gold futures are down $2.70 per ounce currently at $1,144.70 at the Commodity Exchange in New York.

Gold – usually viewed as a “safe-haven” for investors amid inflation and world instability – has been lagging despite the sluggish economy in China, the Greek debt crisis becoming larger, and the recent deal on Iran’s nuclear ambition. Here in the US the Federal Reserve Chairwoman, Janet Yellen, is said to be sending indications that current domestic conditions may likely justify hiking-up interest-rates, however the stronger dollar, recent initial jobless claims, and even manufacturing data are all unclear.

The trend for gold futures is down with no bottom yet in sight. A bounce higher in gold futures is becoming overdue in my opinion.

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Copper Futures Hover at Two-Week Highs Amid Greek Default

Copper futures have been back-and-forth in prices this week with the Greek debt issue and the nation’s potential departure from the Euro-community fresh on traders minds. Copper futures settled today at $2.6295 per pound, up $0.0120 for the day at New York’s Commodity Exchange.

Copper futures had been trading at four month highs in mid-May, but just last month had fallen to four month “lows.” Coming into the confrontation week for Greek default, copper futures are near two-week highs.

The trend for copper futures is down with no bottom yet in sight. With the nation holiday ahead of us, if copper futures can’t find direction before Friday then perhaps the trade needs to get the holiday behind them.

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Copper Futures Higher on Chinese Stimulus Outlook

Copper futures are beginning their rebound today from three-week lows on the outlook that weak Chinese factory activity may prompt the national government to introduce new stimulus measures to turn things around. Copper futures ended Thursday up 225 points at $2.8515 per pound at New York’s Commodity Exchange.

Interestingly it was data released by a popular bank’s “purchasing manager’s” index that revealed China’s data only inched-up by two-tenths of a point (to “49.1”) which missed expectations for better growth and below the benchmark level of “50” which would indicate growth in activity rather than contraction. China is the world’s largest copper consumer and used nearly 40% of copper resources just last year.

The trend for copper futures is up and there is no topping action yet in sight. I suspect the Chinese interest-rate cuts have helped prompt this market higher since its January lows.

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Chinese GDP Speculation Adds to Copper Futures Choppiness

Copper futures is once again in choppy trading with disappointing Chinese growth data prevailing the speculation that Beijing officials will have to do more to jumpstart their economy. Copper futures ended trading Wednesday at New York’s Commodity Exchange up almost .02c from the day before near $2.72 a pound.

The Chinese economy is said to have grown by 7% in the first quarter – which was forecasted – but down from an expansion rate of 7.3% from the prior quarter. This happens to be the slowest pace of growth for their country since the global financial crisis era in 2008.

The trend for copper futures are at a crossroad. The up-moves in copper fail to have immediate follow through thrust which keep me on the sidelines.

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New York’s Feds Send Gold Futures Plummeting

Gold futures are sharply lower today reportedly after the New York Federal Reserve’s index of manufacturing conditions showed improvement for prospects in February – but just not at the pace for economic growth expected. The index dipped to a level of “7.8” for this month when in fact analysts were4 expecting 8.5.

Gold futures may be at a vulnerable crossroads amid ongoing expectations for the Federal Reserve private bank to begin a campaign to raise interest-rates possibly in June. Higher interest-rates are considered bearish for gold & precious metals as an investment because it competes with yield-bearing assets when rates are rising.

The trend for gold futures is down once again after a brief rise last month. There is no bottom yet in sight for gold futures, however, a base of support comes in at the $1,170.00 level in my study.

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Copper Futures About-Face on Demand Risk

Copper futures did a complete “about-face” today after yesterday’s run-up to the $3.10 level. Copper futures are back trading below $3.00 today after it was learned weaker US & Chinese inflation numbers are signaling slowing economies and less industrial metals demand.

Separate domestic and Chinese reports today revealed for the first time in a year, US wholesale prices fell unexpectedly last month. At the same time, reports from China show costs to consumers there rose at the slowest pace in almost five years. The significance here is these two countries represent the planet’s biggest copper consumers.

The trend for copper futures, although technically down, have been choppy at best. I will consider shorting copper futures on a pullback soon.

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Commodity Futures Markets Only Game In Town

Recent commodity assets under management rose to a record $320B in September, from a $293B in August, Barclays Capital reported.  Since bond yields are low, and the stock market is flat, it seems the smart money is drifting into hard-asset commodities in this economy.

Barclays also reported liquid investment flow into commodity markets reached more than $9B in September alone, which is the third-highest figure ever recorded ($10.8B total for third quarter).  Commodity index investments brought in $7.5B in the quarter as well.

A Barclays agent was quoted as saying today, “The fundamentals of most commodities, many of which remain fraught with supply side issues, continue to act as attractive magnets for long-term asset allocation.”  Do you get the hint we may very well see more upside to these (futures) markets…?

We rode one heck of a wave up in most of our grain markets recently.  With an exception of our wheat markets, there still is no sign of a top in my work for most of these commodity markets.

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Crude Oil Futures Up on Leading Indicators

An index of leading economic indicators beat most economists’ expectations today, and news that existing home sales grew sent crude oil futures back up to $75 per barrel.  Crude oil futures had been pushing downward this past week, but with this news, some may speculate this as some type of expansion in our economy into next year.

Crude oil futures have ranged from $70.76 to just over $78 per barrel this past month.  $75 per barrel oil happens to be the target price for oil estimated by Saudi Arabia’s King Abdullah back in 2008.

Chief energy economist at Deutsche Bank, Adam Sieminski, had this to say today “King Abdullah said he wanted $75 oil.  It’s good to be king.  When you’re Saudi Arabia and have the ability to put oil on the market and take it off in the quantities you want, you can pretty much have what you want.”

Crude oil futures are up about 9% for the year, but on their lower range for the past entire year.  I breakout may be looming…

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