Gold Market

Gold future took a little correction yesterday on optimism of debt talk till $1602.80 after which it again revived to settle at $1613.40 as the debt talk stalled and vote for the plan postponed.

 The dollar index settled with marginal gain before a planned briefing by Obama administration officials on the stalemate in raising the US debt limit that is needed to avert a default

 Unemployment benefit claims fell in the US by more than expected signaling a fading labor market weakness might have supported the dollar to gain

 The global equities remained submissive yesterday and settled all most all at a negative side. The ambiguity over the US debt ceiling might led the investors to remain calm for investing in riskier assets, except FTSE all other renowned exchanges fell

 Holdings in the SPDR Gold Trust, the world's largest goldbacked exchange-traded fund increased to 1262.97 tons from 1244.79 tons as on 28th July

 The gold-silver ratio improved to 40.54 from 39.81

OUTLOOK:

At the Globex platform gold is seen quoting up by $4.70, at $1618.10 after the US House postponed a vote on speaker John Boehner’s debt limit plan which will be taking place today evening at 6 pm Washington time. Asian stocks, taking cues from the US equities are trading mostly at a downside as the US debt talk stalled yesterday. The dollar index is gaining at present on optimism of the US lawmakers; finding of a temporary solution to the debt limit. In  the early morning Japan industrial production on a monthly basis rose but lesser than expected which might have appreciated the Yen. The dollar index is however likely to pare the initial gains as reports in the evening might show a contraction in GDP along with a reduced personal consumption. Overall the bullion sector looks dicey. On one hand it is the debt limit talks, if works out positively, gold will be set to poise. On the other hand, if the opposite happens along with a faltering GDP, gold might be  demanded as haven. Under such circumstances it is therefore likely to remain at an elevated level before voting starts. So, it is recommended to be long for a shorter target for the metal.

Commodity money

Commodity money

Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity. Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction to one another, in various commodity valuation or Price System economies. Use of commodity money is similar to barter, but commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content. American Eagles are imprinted with their gold content and legal tender face value.

SILVER MARKET

Silver plunged yesterday on the same optimism that the EU leaders would have moved closer to resolve the region’s debt crisis. The immediate delivery future at the COMEX fell 1.65%

 The dollar index  settled near half a percent below prior closing as the debt ceiling decision remained indecisive 

Global equities closed mixed. While Europe and some Asian regional stocks gained, the US stocks fell after the existing home sales fell unexpectedly

The I-share silver holdings increased to 9864.33 tons from 9673.36 tons as on 19th  July

OUTLOOK:

At the Globex platform silver is seen quoting up by $0.537, at $40.095. As discussed in Gold’s outlook, the Asian equities are trading at a downside  as a deal to prevent the US debt default remained obscure. The dollar index is therefore sliding against the majors. The Euro  area chiefs are having the second summit today in Brussels to solve the second bailout of the Greek default where the German chancellor and the French president are likely to announce a joint position over the same issue. Hence the euro is gaining against the dollar.Coming to the economic data front, the PMI numbers from the Euro zone and German are likely to fall short from the prior level which may impact upon the Euro adversely although the EU chiefs meeting at Brussels today may keep the currency strong on an anticipation of resolving second bailout of Greece. The US releases are also expected to have a mix kind of impact. Hence silver may remain volatile today with bias towards upside. Hence it is recommended to be long for the metal.

GOLD

Gold fell for the second straight day on optimism that the EU policy makers are moving closer in resolving the region’s debt woes, cutting demand for the metal as haven. The immediate delivery future at the COMEX lost 0.26%.

 The dollar index  settled near half a percent below prior closing as the debt ceiling decision remained indecisive

 Global  equities  closed mixed. While Europe and some Asian regional stocks gained, the US stocks fell after the existing home sales fell unexpectedly

 Gold losses remained limited on concern that the Obama administration and congressional leaders won’t reach an accord on increasing the nation’s debt ceiling

 Holdings in the SPDR Gold Trust, the world's largest goldbacked exchange-traded fund slid to 1246.01 tons from 1249.34 tons as on 20th July

 The gold-silver ratio increased to 40.36 from 39.80

OUTLOOK:

At the Globex platform gold is seen quoting up by $5.20, at $1602.10. Most of the Asian stocks declined as a deal to prevent US debt default remained elusive. Dollar index is therefore also sliding while the Euro is gaining strength against the dollar after the German chancellor and French President reached a joint position on Greece’s debt crisis. The Euro area chiefs are having a summit today with an aim to stem the contagion on expectation of which the Euro is expected to remain strong for the day. On the other hand, US president Obama’s administration has signaled that it may accept a short term increase in the US debt limit if lawmakers need a few days to finish the work on a broader agreement to cut the deficit. Coming to the economic data front, the PMI numbers from the Euro zone and German are likely to fall short from the prior level which may impact upon the Euro adversely although the EU chiefs meeting at Brussels today may keep the currency strong on an anticipation of resolving second bailout of Greece. The US releases are also expected to have a mix kind of impact. Hence gold may remain volatile today with bias towards upside. Hence it is recommended to be long for the metal.

SILVER REVIEW

Silver climbed to a nine week high after S&P joined Moody’s credit rating to undermine US credit rating. Futures at the COMEX gained 1.42% .

 The dollar index settled 0.01% higher than the prior amid missed talks regarding monetary easing and a better than estimated jobless claims data

  Global  equities fell on concern of a failure of right decision by the US president Obama and Congressional leaders to tackle the debt

New applications for unemployment benefits fell last week to the lowest level in recent times, suggesting fewer layoffs in early July than usual

The I-share silver holdings increased to 9633.55 tons from 9500.57 tons as on 13th July

OUTLOOK:

At the Globex platform silver is seen quoting down by $0.469 at $38.225. As discussed in Gold’s outlook, duality in Fed’s remarks for monetary easing within two consecutive days, made investors skeptic about the economy’s outlook. Beside’s a failure to reach any deal on debt ceiling by the Obama administration is also creating ambiguity to contain the debt limit. Data yet to release from the US in the form of manufacturing and industrial production is likely to increase which might provide a boost to the dollar and thereby silver might remain under pressure. The Asian equities are trading at a mix tending towards down side may also trigger silver to retreat. Overall, silver is likely to remain weak for the day and hence is recommended to remain short for the metal.

GOLD REVIEW

Gold future rallied to a record high of $1594.90 to settle at 0.24% higher from the prior at $1589.30 on speculation that debt woes in the US and Europe will escalate, boosting the appeal of the precious metal.

 The dollar index settled 0.01% higher than the prior amid missed talks regarding monetary easing and a better than estimated jobless claims data

 Global equities fell on concern of a failure of right decision by the US president Obama and Congressional leaders to tackle the debt

 New applications for unemployment benefits fell last week to the lowest level in recent times, suggesting fewer layoffs in early July than usual

 Holdings in the SPDR Gold Trust, the world's largest gold backed exchange-traded fund remained unchanged at 1225.40 tons from 1205.41 tons as on 14thJuly

 The gold-silver ratio slid to 41.07 from 41.55

OUTLOOK:

At the Globex platform gold is seen quoting down by $5.60, at $1583.70. The Fed is prepared to take additional action if the economy appears to be in danger of stalling, Bernanke said recently but opposed the same yesterday while president Obama and congressional; leaders have as yet failed to reach a compromise on reducing deficits and raising the debt ceiling. The dollar index is therefore weakening after S&P joined Moody’s and came out with a likely US credit rating cut. The Asian equities are trading at a mix, tending mostly towards downside amid uncertainties of US economic conditions whether to provide stimulus or not. Coming to the economic data front, the US consumer price index is likely to ease while the manufacturing and industrial productions are likely to improve. These may provide a boost to the dollar in the evening.  In Europe, results of stress tests on 91 banks as part of an effort to reassure investors the region’s lenders have enough capital will be released by the European Banking Authority today. Overall, gold seems to be little weak today and hence is recommended to remain short for the metal.

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.

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.

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.

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.