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Morningstar Trader's Blog - Thursday, July 14, 2011
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# Thursday, July 14, 2011

GOLD REVIEW

Gold future rallied to a record high of $1588.90 to settle at $1585.50 amid concern of Moody’s warning to the US about the probability of losing its “Aaa” debt rating. US debt ceiling talks stumbled and Europe’s sovereign crisis persisted, boosting demand for the haven.

 The dollar index  plunged more  than a percent yesterday after Moody’s put US under review for a credit rating downgrade, damping demand for the nation’s currency

 Global equities remained firm. Despite the dollar retreated, Bernanke’s probable arrangement for more stimulus package kept  the investors confident to contain the risk

 US president Barack Obama and Congressional leaders have as yet failed to reach a compromise on reducing deficits and raising the $14.3 trillion federal debt ceiling before the government exceeds its borrowing  authority on Aug.2

 Holdings in the SPDR Gold Trust, the world's largest goldbacked exchange-traded fund increased to 1225.40 tons from  1205.41 tons as on 13th July, indicating growing investment demand

 The gold-silver ratio slid to 41.55 from 43.84

OUTLOOK:

At the Globex platform gold is seen quoting up by $0.90, at $1586.40. The dollar index is at a weaker note on Moody’s warning. The Asian equities are trading mix amid uncertainty of the US economy’s fate. Fed chairman Bernanke will testify the debt limit for a second day before lawmakers amid data that is likely to show retail sales slid in June. If the data come soft, it would give the market more of an excuse to anticipate more quantitative easing. He also said that he is prepared to provide more stimuli if needed after the dollar sank 1.4% against the Euro within a single day and warned a failure by congress to raise the debt limit would send shock waves through the financial system which is an enough reason for the metal to take an up ride. Italy is due to sell government debt today amid concern that the crisis may be spreading to that nation. Besides, Fitch has cut Greece’s credit grades to its lowest for any country in the world. The move from “B+” to “CCC” reflects the absence of a new fully funded and credible program by the IMF and the EU which intensified a real possibility of default. Overall, gold is likely to remain strong for the day and hence is recommended to be long for the metal.

 

Thursday, July 14, 2011 11:58:18 AM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Financial Terminology | Media  | 
# Wednesday, July 13, 2011

SILVER REVIEW

Silver remained pretty volatile yesterday however revived towards end after the EU finance ministers failed to defuse the region’s financial woes. Futures at the COMEX fell slightly .

 The dollar index  settled 0.24% lower than the prior after The Fed report said policymakers continued to debate whether additional stimulus will be needed if the outlook for economic growth remains weak

  Global  equities  shattered yesterday after Ireland’s downgrade to junk status added concern on Europe is losing control of the credit crisis

Ireland joined Portugal and Greece as the third Euro are nation to have its credit rating to below investment grade as European finance ministers struggle to contain debt

The I-share silver holdings  remained unchanged at 9532.4 tons

OUTLOOK:

At the Globex platform silver is seen quoting up by $0.556, at $36.19. As discussed in Gold’s outlook, the Asian equities gathered momentum after Chinese GDP  rose better than expected with acceleration in industrial production. The dollar index is at a lower side as the Fed minutes of the meeting showed no confirm solution about the monetary easing in near term. Ireland entered as the third Euro nation of getting the junk rating and the debt contagion is likely to spread to Italy. Economic release from the US scheduled today in form of monthly budget, is likely to widen the deficit which will be supporting the metal’s price. Hence it is recommended to be long for the metal.

Wednesday, July 13, 2011 12:08:59 PM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Financial Terminology | Media  | 

GOLD MARKET

Gold futures rose to a record settlement as Europe’s debt crisis boosted demand for the metal as a haven. The Euro fell against the dollar after a meeting of EU finance ministers failed to defuse the region’s fiscal woes. COMEX future immediate delivery advanced 0.85%.

 The dollar index settled 0.24% lower than the prior after The Fed report said policymakers continued to debate whether additional stimulus will be needed if the outlook for economic growth remains weak

 Global equities shattered yesterday after Ireland’s downgrade to junk status added concern on Europe is losing control of the credit crisis

 Ireland joined Portugal and Greece as the third Euro are nation to have its credit rating to below investment grade as European finance ministers struggle to contain debt

 Holdings in the SPDR Gold Trust, the world's largest goldbacked exchange-traded fund increased to 1225.40 tons from  1205.41 tons as on 12thJuly, indicating growing investment demand

 The gold-silver ratio improved to 43.84 from 43.39

OUTLOOK:

At the Globex platform gold is seen quoting up by $3.40, at $1565.80. Asian stocks halted a two day slump after China in the early morning reported a stronger than forecasted economic growth. Chinese GDP rose to 9.5% YOY basis while industrial production also accelerated, indicating the economy is still maintaining momentum even after hike in interest rate to cool inflation. The dollar index at present is weakening against the Euro and with this currency volatility and the debt contagion risk in Greece which is likely to spread in Italy, investors are therefore likely to gravitate towards something tangible like gold. Besides, the Fed policy makers disagreed on whether additional monetary stimulus will be needed, even if the outlook for economic growth remain weak, minutes of their meeting last month showed. Some members noted that the committee might need to consider further stimulus, while others voiced concern about an increased inflation risk that might warrant tighter monetary policy.  This is further propelling dollar to fall against the majors. The data yet to release from the US in form of monthly budget is further expected to widen the deficit which might be another triggering factor for gold. Overall, gold seems to remain strong for the day and hence is recommended to be long for the metal.

Wednesday, July 13, 2011 12:05:07 PM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Financial Terminology | Media  | 
# Tuesday, July 12, 2011

SILVER OUTLOOK

Silver plunged by more than 2 percent at the COMEX before any result declared from the meeting held by the US president Obama.

 The dollar index settled by gaining near a percent on anticipation of some result to come out from the meeting between Obama and the Republicans

 Global  equities  shattered yesterday as investors got worried after the European debt crisis was anticipated to be spilled over to Italy and Spain

The I-share silver holdings remained unchanged at 9532.4 tons

OUTLOOK:

At the Globex platform silver is seen quoting up by $0.121, at $35.810. As discussed in Gold’s outlook, the Asian stocks are trading at a downside amid concern of a probable worsening situation of European debt crisis. The Euro at present is weakening against the dollar before Italy to start selling one year bond today. The US treasuries yield fell as the government is going to sell $66 billion of notes and bonds this week, starting with a $32 billion of three year auction today. Coming to the economic data front, the US trade deficit is likely to worsen while Fed is yet to release the FOMC minutes of the meeting held on June 21-22. Overall, it is therefore likely that gold will beremaining strong for the day and hence is recommended to be long for the metal.Overall silver is likely to have a range bound movement for the day inclining to the upside.

Tuesday, July 12, 2011 2:02:18 PM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Do you know? | Market Summary | Media | others  | 

GOLD REVIEW

U.S. gold prices extended their gains to five straight sessions on Monday, supported by safe-haven worries that European nation debt issues could widen to other countries. August gold prices gained 0.49% to close at $1549.20 in the COMEX.

 The dollar index  settled by gaining near a percent on anticipation of some result to come out from the meeting between Obama and the Republicans

 Global equities shattered yesterday as investors got worried after the European debt crisis was anticipated to be spilled over to Italy and Spain

 Holdings in the SPDR Gold Trust, the world's largest goldbacked exchange-traded fund remained unchanged at 1205.41 tons

 The gold-silver stood at 43.32, slid slightly from 43.39

OUTLOOK:

At the Globex platform gold is seen quoting up by $3.40, at $1552.70. Asian stocks dropped amid concern of Europe’s debt crisis will worsen. European finance ministers revived the prospect of bond buybacks to ease Greece’s plight and declined to rule out a temporary default as they struggled to contain the debt crisis that has now spread to Italy who will sell one year bills today and as much as 5billion Euros of bonds on 14th July. So, the Euro is depreciating against the dollar.The US 10 year treasuries yield snapped gains as the US is also prepared to sell $66 billion of notes and bonds this week, starting with a $32 billion of three year auction today. The government also intends to offer $21 billion 10 year debt tomorrow. This may be another triggering factor for the metal to move up. US president has urged Republican leaders to compromise on their opposition to tax increase and achieve the largest possible deal to cut the Federal budget deficit. Coming to the economic data front, the US trade deficit is likely to worsen while Fed is yet to release the FOMC minutes of the meeting held on June 21-22. Overall, it is therefore likely that gold will be remaining strong for the day and hence is recommended to be long for the metal.

Tuesday, July 12, 2011 1:45:54 PM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Market Summary | Media  | 
# Friday, July 08, 2011

SILVER MARKET

Silver also moved up yesterday on anticipation of ECB’s rate hike. Also the better than expected UK manufacturing data prompt the metal to grow.

 The dollar index settled 0.28% below prior closing despite better jobless claims data but because of ECB’s rate hike which made the Euro stronger

  The US  and European equities closed by gaining modestly along with the Asian stocks assuming a better payrolls data to be released after ADP employers added more jobs than expected

 ECB has raised its benchmark rate yesterday to the highest in more than two years to curb inflation

The I-share silver holdings remained unchanged at 9532.4 tons as on 6th July

OUTLOOK:

At the Globex platform silver is seen quoting down by $0.106, at $36.43. As discussed in  Gold’s outlook, Asian stocks have advanced on anticipation of better payroll data after the ADP services showed a better than expected numbers. The dollar is also gaining on the back of same expectation. ECB  announced that the governing council decided to  suspend the minimum required collateral rules for Portuguese government debt in the refinancing operations which came in light of Tuesday’s step from Moody’s to cut the credit rating status to junk. Coming to the economic data front, the US employers are likely to add almost twice as many jobs in June compared with May after a better than expected figures cam e from ADP employers services yesterday. This may provide support to the dollar. US wholesale inventories may also fall. Overall, European debt woes may keep the metal strong for the day although the US release towards evening may put pressure. Hence, it is recommended to be long for the metal for a shorter target with due consideration to the US payrolls data

Friday, July 08, 2011 12:04:08 PM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Market Summary | Media  | 

GOLD MARKET

Portugal’s credit rating to below investment grade, making it the second euro area nation after Greece to be downgraded to so called junk status. On speculation of Europe’s sovereign crisis will spread, appeal for the precious metals boosted.

 The dollar index settled  0.28% below prior closing despite better jobless claims data but because of ECB’s rate hike which made the Euro stronger

 The ECB has raised its benchmark rate yesterday to the highest in more than two years to curb inflation

 US and European equities closed by gaining modestly along with the Asian stocks assuming a better payrolls data to be released after ADP employers added more jobs than expected

 Holdings in the SPDR Gold Trust, the world's largest goldbacked exchange-traded fund  remained unchanged at  1205.80 tons,  increasing concern about the investment demand as on 7thJuly

 The gold-silver stood at 42.57, slid slightly from 42.71

OUTLOOK:

At the Globex platform gold is seen quoting up by $0.90, at $1531.50. Asian stocks mounted before reports may show US payrolls increased. The dollar index is at a stronger side anticipating a better payroll data. Greece’s jobless rate is on the record, is raising the political cost of budget cuts providing fodder for anti government protest, which might have weakened the euro.  Trichet said that the ECB monetary stance remains accommodative and refrained from signaling a new rate hike for next month, especially after he said that recent data suggested growth is decelerating. The positive news and the end of all speculation was when Trichet announced that the governing council decided to suspend the minimum required collateral rules for Portuguese government debt in the refinancing operations which came in light of Tuesday’s step from Moody’s to cut the credit rating status to junk.Coming to the economic data front, the US employers are likely to add almost twice as many jobs in June compared with May after a better than expected figures came from ADP employers services yesterday. This may provide support to the dollar. US wholesale inventories may also fall. Overall, European debt woes may keep the metal strong for the day although the US release towards evening may put pressure. Hence, a range bound movement is expected.

Friday, July 08, 2011 12:00:21 PM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Market Summary | Media  | 
# Tuesday, July 05, 2011

Silver Market

Spot silver also gained by 0.82% yesterday. A sluggish kind of movement has been observed due to the US holiday.

 The  dollar index  settled 0.12% lower from the prior on anticipation of ECB’s rate hike this week made the Euro strong against the dollar

  The Asian equities closed at a positive note while FTSE also advanced near about half a percent. US markets were closed yesterday due to the Independence Day holiday

The I-share silver holdings remained unchanged at 9536.65 tons as on 1st July

OUTLOOK:

At the Globex platform silver is seen quoting up by $0.526, at $34.220. As discussed in Gold’s outlook, the Asian stocks are trading at a downside after Moody’s services threaten the Chinese banks credit outlook at a negative side. Also, on anticipation of raising interest rate at this weekend, dollar rallied

against the Euro as a refuge. Coming to the economic data front, the German and Euro zone PMI releases although are expected to remain at the prior level, the Euro zone retail sales are likely to

slow down a bit. Data belongs to the US in the form of factory orders however may raise which may provide support to the dollar. The same kind of explanation holds in silver also regarding the

opening price in Indian platform. At present, rupee is depreciating against the dollar and hence a gap up opening to that extent only is expected. However, relating to the economic releases, silver seem to be weak for the day. Hence, it is recommended to be short on the metal at higher prices.

Tuesday, July 05, 2011 12:01:08 PM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Market Summary | Media  | 

GOLD MARKET

Spot Gold gained for the first time in three days as the weaker dollar spurred demand for an alternative asset and benefitted from the stronger Euro on speculation that the ECB will raise interest rate this week.

 The  dollar index  settled 0.12% lower from the prior on anticipation of ECB’s rate hike this week made the Euro strong against the dollar

 The Asian equities closed at a positive note while FTSE also advanced near about half a percent. US markets were closed yesterday due to the independence day holiday

 Holdings in the SPDR Gold Trust, the world's largest goldbacked exchange-traded fund  remained unchanged at  1205.80 tons,  increasing concern about the investment demand

 The gold-silver stood at 43.78, slid slightly from 43.98

OUTLOOK:

At the Globex platform gold is seen quoting up by $14.70, at $1497.30. The Asian equities are trading at a mix with Chinese stocks paring gains after Moody’s services said that China banks’ credit outlook is potentially negative. Also, speculation mounted that China may raise interest rate as early as this weekend; offsetting optimism that Greece will avoid default, on the back of which the dollar rallied against the Euro. Coming to the economic data front, the German and Euro zone PMI releases although are expected to remain at the prior level, the Euro zone retail sales are likely to slow down a bit. Data belongs to the US in the form of factory orders however may raise which may provide support to the dollar. Due to US holiday yesterday a choppy kind of trading was seen at the electronic platform. At the Indian platform, the US spot prices might have factored in and the rupee appreciation put a lid on gold prices to move higher at a greater extend. Today, immediate delivery future although is showing 0.98% up, it might not open that much high as it would have been following the parity price in India. Hence, the rupee movement will be a crucial factor to decide the opening bell of Indian gold. Overall, gold is likely to remain weak for the day after a probable gap up opening (as rupee is likely to depreciate) and hence is expected to have a range bound movement for the day gold prices to move higher at a greater extend. Today, immediate delivery future although is showing 0.98% up, it might not open that much high as it would have been following the parity price in India. Hence, the rupee movement will be a crucial factor to decide the opening bell of Indian gold. Overall, gold is likely to remain weak for the day after a probable gap up opening (as rupee is likely to depreciate) and hence is expected to have a range bound movement for the day

Tuesday, July 05, 2011 11:25:35 AM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Financial Terminology | Market Summary | Media  | 
# Monday, July 04, 2011

Silver Market

The week gone by silver also tumbled more than the gold as investors’ optimism rose after the Greece got the aid from the European Union.

 The dollar index headed for a more than one and a half percent fall after a third straight weekly gain against the Euro, as the Greek probability of default subsided

  Global equities measured by the MSCI all country world indexes, posted gain of 5.36% while the Asian benchmark index climbed, driving the region’s key benchmark index up for a second straight week by 2.49% after Greece was able to put a halt to the worst case scenario. On the other hand, the CRB Index, a bellwether for commodities, also advanced by 2.07% despite precious metals got a hit. US stocks climbed, pulling the DJIA to gain by more than five percent

The I-share silver holdings slashed to 9536.65 tons from 9588.19 since last week

OUTLOOK:

At the electronic platform silver is seen quoting up by $0.30 at $34.01. As discussed in Gold’s outlook, the Asian equities are trading firm after the European officials approved an aid payment to Greece to stave off the default The Euro is also gaining strength against the dollar on the back of this news. The European Union has approved its share of 12 billion Euro aid to Greece however, IMF is still yet to provide the rest. From the economic data front, the Euro zone PPI is likely to come down which will be another factor for the Euro to make it strong against the majors. However, due to the US Independence Day holiday, a sluggish kind of trade can be expected. Overall, silver is expected to remain high although sustainability remains under concern. Hence it is recommended to be short for the metal at higher prices.

Monday, July 04, 2011 12:03:41 PM (Nepal Standard Time, UTC+05:45)  #    Comments [0]   Daily Bulletin Board | Market Summary  | 
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