Gold Traders Uneasy – Spark Temporary Rally

  

                         Gold reacted quickly to Mr. Summer’s withdrawal of his nomination to head the FOMC. Gold climbed by $22.00 in the early morning session to trade at 1331.00. Exactly why a possible nomination is having such a huge market effect is an indication of the frayed nerves of commodity traders ahead of this week’s FOMC meet and possible taping. Syria weighed heavily on the markets over the last two weeks exhausting traders. Gold gained as the dollar dropped to the lowest level in a month after Lawrence Summers withdrew from consideration. Silver rallied from its worst week since June.

The U.S. and Russia held talks on a plan for Syria to surrender chemical weapons to avert a strike that could stoke Middle East tensions and announced a successful conclusion and a plan to move forward easing market tensions. The Federal Reserve is expected to announce its first move to taper its $85 billion in monthly bond buying when its two-day meeting ends Wednesday. While the Fed is seen curbing bond purchases by an initial $10 to $15 billion — a relative baby step compared to the massive amount of stimulus applied — it sends an important message that the Fed is moving toward a normalization of rates and expecting a more normal economy. While the Fed meeting in the week ahead tops the list, Congressional budget maneuvering and any developments on Syria will also get attention. The United Nations is expected to receive a report Monday which should show if Syria used chemical weapons on its citizens.

Silver is trading at 22.193 gaining 47 cents as the US dollar weakened to trade at 81.26 down by 42 points following cues from gold. The tonnage of silver bullion bars held by the US silver ETF increased around 30 tons or. 0.3 percent to 10,536.70 tons. Precious metals are expected to trade with a mixed note on the back of ease in concerns in QE tapering from Federal Reserve in its meeting during the week. The base metals pack on the LME traded on a negative note in the last week due to concerns regarding QE taper which could be announced in the FOMC meeting this week and mixed economic data from the advanced economies. However, weakness in the DX and decline in inventories prevented sharp decline in the base metals on the LME. Copper gained this morning as the US dollar tumbled. Copper prices on the LME slipped around 1.3 percent in last week and touched a low of $7024/ton on Friday. Prices declined during the later part of the week on the back of favorable economic data from US increased concerns of QE tapering from the Federal Reserve.

Further, decline in industrial production data from Euro Zone exerted downside pressure on prices. In the early part of the week, prices rose on account of positive economic data from Chinese economy. - Fxempire

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Crude Oil slightly higher on Middle East issues

         Crude Oil futures traded modestly higher in the early part of Friday’s Asian even as talks between the U.S. and Russia regarding the situation in Syria advanced. 

On the New York Mercantile Exchange, light, sweet crude futures for October delivery inched up 0.02% to USD18.62 per barrel in Asian trading Friday. The October contract settled up 0.97% at USD108.60 per barrel on Thursday. 

U.S. Secretary of State John Kerry is due to meet with his Russian counterpart Sergei Lavrov in Geneva later to discuss terms for Syria to surrender its chemical weapons.

Oil rose on concerns talks may hit snags and hike the chances of U.S.-led limited military strikes against Syria, which energy investors fear would engulf the broader oil-rich Middle East and threaten global supply.

However, OPEC member Libya has again the Middle East oil scenario because of dwindling supply. Libya has had supply issues for more than two years due to geopolitical strife and domestic attacks on oil assets. 

Now, ongoing labor strife is hindering Libyan output. In early September, Libya's output fell to just 150,000 barrels per day, though it has the capacity to produce 1.6 million barrels per day. Exports fell to 80,000 barrels per day, according to National Public Radio. 

Before the Arab Spring in early 2011, Libya was producing over 1 million barrels per day. The country is home to Africa’s largest oil reserves. 

The International Energy Agency added that oil supplies from the Organization of the Petroleum Exporting Countries fell by 260,000 barrels to 30.51 million barrels per day in August, due to declining output from Libya. 

Elsewhere, Brent crude futures for October delivery fell 0.05% to USD111.75 per barrel on the ICE Futures Exchange. - investing.com

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Gold lower as tapering talk escalates

                         Gold futures traded slightly lower in the early part of Friday’s Asian session, extending losses from Thursday’s U.S. session, as traders dealt with lingering fears of Federal Reserve tapering. 

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery fell 0.24% to USD1,327.40 per troy ounce in Asian trading Friday. The December contract settled lower by 2.43% at USD1,330.60 per ounce on Thursday. 

Gold futures were likely to find support at USD1,315.40 a troy ounce, the low from Aug. 14, and resistance at USD1,416.30, Tuesday's high.

The Federal Reserve kicks-off a two-day meeting on September 17 and with fears of a U.S. military strike against Syria waning, traders appear to be betting that the Fed will move forward with plans to taper its USD85 billion-per-month bond-buying program. Expectations are in place that the U.S. central bank will trim its monthly purchases by USD10 billion. 

Monetary stimulus programs such as Fed asset purchases weaken the dollar to spur recovery, which makes gold an attractive hedge. 

Some decent jobs data seemed to affirm the notion that tapering is imminent. In U.S. economic news out Thursday, initial claims for jobless benefits fell by 31,000 to 292,000 last week. Economists expected a reading of 330,000 claims. The less volatile four-week moving average fell to 321,250 from 328,750. That is the lowest reading since October 2007. 

Elsewhere, Comex silver for December delivery fell 0.72% to USD21.990 per ounce while copper for December delivery rose 0.13% to USD3.210 per ounce. - investing.com

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Metals Ease After Russia Offers Alternative To Syria

                  Gold dipped a bit this morning giving up just under $8 to trade at 1378.80 as global tensions took an unexpected turn on Monday. As the US congress returned to Washington to begin the debate on military intervention in Syria a surprise offer from Russia hit the news. President Obama was scheduled for a week of live press coverage working the public for support to strike Syria. John Kerry spent the weekend visiting leaders from around the globe mustering support and backing after the UN and the G20 showed little interest in military action. Gold prices fell as concern about the Syrian conflict escalating eased after President Bashar al-Assad’s government welcomed a Russian proposal to place its chemical weapons under international control. The suggestion comes a day before US President Barack Obama is scheduled to present an Oval Office address seeking support for American military action to oust Assad.

Gold eased as traders once again looked towards the FOMC next week. The dollar index, which measures the greenback against a basket of six currencies, extended its decline from Friday when a report showing weaker than expected jobs data fuelled uncertainty about whether the Federal Reserve will start tapering its stimulus.

Silver’s decline was limited as strong data from China helped support the demand for industrial metals. Silver tumbled to 23.385 when just a week ago silver was at the $25 level.  China over the weekend reported strong exports during August, at up 7.2% on an annualized basis. Strong Chinese import levels for August were also reported, at up 7.0% year on year.

Consumer inflation in China rose 2.6% in August, year on year, which was in line with expectations. China industrial production figures are due out Tuesday. There was also strong GDP data coming out of Japan Monday. The upbeat Asian economic data is a bullish underlying factor for the precious metals markets.

Copper, the metal used in power and construction, was lifted by data from China that reinforced expectations of a rebound in demand for metals from the world’s largest consumer. Copper gained on Monday but gave back those gains on Tuesday morning as commodities turned to the red. Copper is trading at 3.257 down by 24 points as traders took positions before Chinese data due shortly.

Chinese data is expected to show a climb in retail sales and industrial production which will be supportive of the commodity currencies along with the overall commodities market. As tensions in the Middle East ease, traders will be closely watching economic data for clues. Many traders sold off metals to book profits after political tensions pushed the prices higher. - Fxempire.com

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EIA Inventory And Chinese Data Limit Price Declines For Crude Oil

       

                  WTI Crude oil eased on Tuesday and continued to fall on Wednesday morning trading at 106.99 down by 41 cents in the Asian session. Brent oil gave up 14 cents to trade at 111.31. Tuesday’s decline in oil prices came despite a bullish economic report from China, a key market for oil consumption growth. Chinese industrial production rose at its fastest pace in 17 months in August, authorities said Tuesday, the latest in a series of better-than-expected indicators pointing to a pick-up in the world’s second-largest economy. China’s industrial production rose at its fastest in 17 months in Aug, authorities said Tue, the latest in a series of better-than expected indicators pointing to a pick-up in China’s economy. The main gauge of output at China’s factories, workshops and mines increased 10.4% YoY in Aug

As tensions in the Middle East seemed to settle to a low boil with a possibility of a diplomatic solution in Syria, commodity prices eased. The tone in markets has shifted since Russia proposed Monday that Syria’s chemical weapons stock could be brought under international control in a bid to head off threatened US military strikes. US equities rose Monday and were rallying Tuesday, while oil prices have dropped as the prospect of US military action has declined. Diminishing worries about potential US military strikes on Syria had further sharpened investor appetite and eased safe haven trades. Syria has accepted a Russian proposal to give up chemical weapons and win a reprieve from U.S. action. 

In a live address to the nation from the White House late Tuesday, Obama said delaying a decision on military intervention was necessary to give Russia’s plan to neutralize its ally’s chemical weapons a chance. “I have therefore asked the leaders of Congress to postpone a vote to authorize the use of force while we pursue this diplomatic path,” Obama said, noting that Secretary of State John Kerry would head to Geneva to meet his Russian counterpart on Thursday. However he warned that it was too early to tell if Russia’s plan would work, and said cruise missile destroyers would remain stationed in the Mediterranean, ready to strike on the Assad regime.

Traders will now take a look at fundamentals ahead of the EIA inventory due later today.  WTI oil inventories probably declined by 2.1 million barrels to 358.1 million last week, according to the median estimate of 12 analysts surveyed by Bloomberg before a report from the Energy Information Administration That would be the lowest level since Aug. 31, 2012.

Natural gas climbed 18 points this morning after tumbling yesterday as reports that the Energy Information Administration’s inventory scheduled for release Sept. 12 may show stocks grew by 65 billion cubic feet in the week ended Sept. 6, according to the median of six analyst estimates compiled by Bloomberg. The five-year average gain for the week is 62 billion. Overnight weather forecasts turned warmer helping to give gas a boost after yesterday’s decline. Natural gas is trading at 3.60 - Fxempire.com

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Gold Traders Watch The FOMC And Look Forward To US Debt Ceiling

                 Wall Street climbed, extending the longest winning streak for the S&P’s 500 Index since July, as data showed China’s economy is improving amid signs of easing tensions over Syria. Gold continued to tumble as global tensions eased after President Obama called for a pause on authorizing a military strike on Syria, easing concern that a conflict will disrupt Middle East. Gold is trading at 1366.80 tumbling from a weekly high just under the 1400 price level. Gold swung between gains and losses, touching the lowest price in three weeks, after U.S. President Barack Obama asked Congress to delay a vote on military action against Syria, diminishing haven demand. Gold has retreated from a three-month high at the end of August as political tension in the Middle East eased. Obama has asked Congress to postpone a vote on military action while he pursues a diplomatic solution for Syria in light of Russia’s proposal for international control of the regime’s chemical weapons, he said in an address to the nation yesterday. The U.S. said Syria’s government used the weapons last month against civilians and had threatened a punitive strike in response.

With Syria moving off the front page traders are once again focusing on next week’s FOMC meeting. Traders are keenly watching US data for signs of what to expect from the Fed. Job openings in the U.S. fell in July to the lowest level in six months, signaling uneven progress in employment. The number of positions waiting to be filled declined by 180,000 to 3.69 mn, from a revised 3.87 mn the prior month that was weaker than initially reported. Gold has lost 19 percent this year amid expectations that the Federal Reserve will pare its $85 billion monthly bond-buying program as the economy improves. The Fed will taper asset purchases by $10 billion at its Sept. 17-18 meeting, according to a Sept. 6 Bloomberg survey, even after data that day showed U.S. employers added fewer jobs than estimated in August.

Gold prices could rise if the Federal Open Market Committee does not trim its bond-buying program as much as market consensus expects, says B of A Merrill Lynch Global Research, according to kitco.com. The firm says expectations are that the Fed will taper its asset purchases, known as quantitative easing, by $10 billion to $15 billion. That view is priced into the market. “If the Fed is more dovish than that, i.e., tapers by less or delays tapering entirely, gold prices could rally in the short term. Yet, gains will in our view be limited, partially because real rates should continue trend higher in the coming quarters,” they say.

Traders are also closely watching the debt ceiling debate in the US which has been postponed several times since the “fiscal cliff” debates earlier in the year. The US could default on its obligations as early as Oct. 18 if Washington fails to agree on legislation to raise the government’s borrowing cap, a new study predicted on yesterday. The Bipartisan Policy Center analysis says the default date would come no later than Nov. 5 and that the govt would quickly fall behind on its payments, including Social Security benefits and military pensions. This could drive uncertainty back into the market and push gold prices upwards.

Silver is trading at 23.178 gaining 16 cents correcting its major tumble this week as Chinese data continues to support the metals pack. Copper is trading in the green at 3.279, while platinum gained over $12 to trade at 1486.15 and palladium added almost $6.00 to trade above the $700 price level.  - Fxempire.com

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Crude Oil trades lower after API data

                    Crude oil futures traded modestly lower in the early part of Wednesday’s Asian although inventories data from the American Petroleum Institute showed a larger-than-expected decline. 

On the New York Mercantile Exchange, light, sweet crude futures for October delivery fell 0.25% to USD107.12 per barrel in Asian trading Wednesday. The October contract settled down 1.94% at USD107.39 per barrel on Tuesday. 

Syria's reported decision give up control of its chemical weapons stockpile sent prices falling on Monday as fears subsided the U.S. would attack and draw the broader Middle East into conflict and threaten global crude supply.

While the Obama administration has pressed its case for attack on the grounds Damascus used chemical weapons in its civil war, polls show most Americans do not favor attacking Syria, which helped push oil prices lower as well. 

Meanwhile, the American Petroleum Institute said U.S. oil inventories fell by 2.9 million barrels last week. Analysts expected a draw-down of 2 million barrels. Gasoline stockpiles increased by 195,000 barrels while distillate supplies climbed by 807,000 barrels. 

Analysts expected gasoline supplies to decline by 1 million barrels and expected a climb of 800,000 barrels in distillates. The more widely followed numbers from the U.S. Department of Energy are due out later Wednesday. 

Oil traders continued to gloss over positive data out of China. On Tuesday, Chinese industrial production rose 10.4% in August, beating expectations for a 9.9% increase and accelerating from a 9.7% gain in July. The country’s is the world’s second-largest oil consumer. 

Elsewhere, Brent crude for October delivery fell 0.13% to USD111.30 per barrel on the ICE Futures Exchange.

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Gold modestly higher on bargain hunting

                Gold futures traded slightly higher in the early part of Wednesday’s Asian session as traders looked to be doing some bargain hunting with the yellow metal. 

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery inched up 0.11% to USD1,365.20 per troy ounce in Asian trading Wednesday. The December contract settled down 1.64% at USD1,363.70 per ounce on Tuesday. 

Gold futures were likely to find support at USD1,351.90 a troy ounce, the low from Aug. 20, and resistance at USD1,416.30, Tuesday's high. 

Gold’s safe-haven status plagued the yellow metal Tuesday, which proved to be another "risk on" with U.S. stocks again racing higher. Russia is offering to take control of Syria’s chemical weapons cache as a way of averting Western military offensive against the Middle East nation and that news ignited a rally in riskier assets. 

While the Obama administration has pressed its case for attack on the grounds Damascus used chemical weapons in its civil war, polls show most Americans do not favor attacking Syria, which further tarnished gold's appeal as a hedge to Syria-related uncertainty. 

Elsewhere, Indian gold imports plunged in August to a fraction of what the world’s largest gold consumer imported a year ago. India raised import tariffs on gold in an effort to stem a widening account deficit and plunging rupee that some market participants said could imperil the country’s already fragile investment-grade credit rating.   -investing.com

India imported three metric tons of gold in the past month, compared with 35 tons a year earlier, according to the Wall Street Journal. 

Meanwhile, Comex silver for December delivery rose 0.29% to USD23.083 per ounce while copper for December delivery added 0.25% to USD3.274 an ounce.

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Crude oil lower as U.S. jobs report lingers

                     Crude oil futures traded lower in the early part of Friday’s Asian session ahead of what some traders view as a critical U.S. non-farm payrolls report for August. 

On the New York Mercantile Exchange, light, sweet crude futures for October delivery fell 0.15% to USD108.21 per barrel on Asian trading Friday. The October contract settled higher by 1.06% at USD108.37 per barrel on Thursday. 

Better-than-expected economic indicators out of the manufacturing and labor markets bolstered demand for oil as well. 

In U.S. economic news out Thursday, the ADP National Employment Report showed the addition of 176,000 private sector jobs last month, but that missed the estimate calling for the addition of 180,000 new jobs. The July number was revised down to 198,000 from 200,000. 

The Labor Department said initial claims for jobless benefits fell by 9,000 last week to 323,000. The less volatile four-week moving average fell 3,000 to 328,500, the lowest reading since October 2007. The Labor Department releases the August jobs report Friday before the open of U.S. markets. 

The Institute for Supply Management said its August services purchasing managers index rose to 58.6% last month from 56.0% in July. That is good for the best reading since the index was created in 2008. Economists expected an August reading of 55%. The U.S. is the world’s largest oil consumer. 

Meanwhile, the Energy Information Administration reported that oil inventories fell by 1.84 million barrels to 360.2 million last week, more than market calls for a decline of 1.26 million barrels. That report was published a day later than usual because U.S. markets were closed for a public holiday Monday. 

Elsewhere, Brent for October delivery fell 0.17% to USD115.08 per barrel on the ICE Futures Exchange. - investing.com

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Gold lower after strong U.S. data points

                     Gold futures traded lower in the early part of Friday’s Asian session as traders in the region digested some strong U.S. economic data points that could give the Federal Reserve room to imminently begin tapering its quantitative easing program. 

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery fell 0.28% to USD1,368.80 per troy ounce in Asian trading Friday. The October contract settled lower by 1.22% at USD1,372.60 per ounce on Thursday. 

Gold futures were likely to find support at USD1,351.90 a troy ounce, the low from Aug. 20, and resistance at USD1,416.30, Tuesday's high. 

In U.S. economic news out Thursday, the ADP National Employment Report showed the addition of 176,000 private sector jobs last month, but that missed the estimate calling for the addition of 180,000 new jobs. The July number was revised down to 198,000 from 200,000. 

The Labor Department said initial claims for jobless benefits fell by 9,000 last week to 323,000. The less volatile four-week moving average fell 3,000 to 328,500, the lowest reading since October 2007. The Labor Department releases the August jobs report Friday before the open of U.S. markets. 

The Institute for Supply Management said its August services purchasing managers index rose to 58.6% last month from 56.0% in July. That is good for the best reading since the index was created in 2008. Economists expected an August reading of 55%. 

Those data points, particularly the ADP report and jobless claims could be a precursor to a strong August non-farm payroll report. Should the August jobs number surprise to the upside, many traders believe it is a foregone conclusion the Fed will begin tapering its asset-buying program before the end of September. 

Elsewhere, Comex silver for December delivery fell 0.15% to USD23.220 per ounce while copper for December delivery inched down 0.03% to USD3.245. - investing.com

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