Posts filed under “Think Tank”

Gold Market Weekly Report

For the holiday shortened week, spot gold closed at $929.80 per ounce, down $9.80 or 1.04 percent. Gold equities, as measured by the XAU Gold & Silver Index (12) fell by 2.64 percent for the week. The U.S. Trade-Weighted Dollar Index (13) gained 0.52 percent.

Key Research Points:

• Turkey, the world’s third-largest manufacturer of gold jewelry in 2007, imported 4.1 tons of gold valued at $125 million in the past three weeks as the wedding season boosted demand

• According to Reuters, Abu Dhabi June gold sales have risen 30 percent from the previous month. The jump is from holiday buying and sales expected to stay robust into the first half of July.

• Scotia Capital states that increasing levels of investment demand for gold bullion will continue and to expect strong activity in physical gold buying. The company also said there will be further inflows into gold backed exchange traded funds during the second half of 2009 and into 2010.

• Analysts suggest a falling U.S. dollar, rising commodity prices and the prospects of high levels of inflation should compel investors to own gold and silver to hedge against financial uncertainties.

• China, the largest holder of foreign currency reserves, renewed its call for a stable U.S. dollar and has proposed to include the topic of a new global currency at the next G8 meeting. The People’s Bank of China will now allow banks to undertake settlement of cross-border transactions between Chinese exporters in Chinese yuan and have offered tax breaks to exporters who make use of this new settlement option. These are negative factors for the dollar and may cause a spillover in bullion purchases as the dollar faces downward pressure.

Gold ETF (GLD)

gold-7609

Source: FusionIQ

Gold has risen from a low of 859 in April to a high of 989 last month. It has retraced close to 50% of that move recently and now appears ready to renew its major bull market up trend. This is being reinforced by the U.S. dollar, which is starting to break down, signaling that a bear market decline is just getting started. Support within the triangle consolidation pattern still stands near 90/91 on the GLD (our Gold market proxy).

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Category: Commodities, Think Tank

Ahead of the reopening of the 10 yr bond auction and with the S&P’s back to where they were on May 1st, we can compare where interest rates, inflation expectations, the US$ and the CRB index were on May 1st with today’s level in the S&P’s in order to gauge the impact of treasury supply…Read More

Category: MacroNotes

Consumer Credit

May Consumer Credit fell $3.2b to $2.519 trillion (SA) but $5.6b less than anticipated. Consumer credit outstanding is now at the lowest level since Dec ’07 and May is the 8th month in the past 9 that has seen a decline. Most of the decline was in revolving credit which fell $2.9b while non revolving…Read More

Category: MacroNotes

King Report: Who Cares About Moving Averages?

> There is mucho pontificating by research types and pundits that ‘all is still well because the S&P 500 held its 200-day moving average. These people are wrong and misguided. Long-time readers know that we regularly assert that the slope of the moving average is of paramount importance and breaches that are contra to the…Read More

Category: Think Tank, Trading

10 year note auction

The reopening of the 10 year note auction was solid as the yield was 4 bps lower than where the when issued was trading and the bid to cover of 3.28 was well above the one year average of 2.31 and at the highest level since at least 1994. This also comes in the context…Read More

Category: MacroNotes

Rate hike odds

Coincident with the pullback in most markets over the past few weeks on doubts with the robustness of the 2nd half global economic recovery, the fed funds futures have been pricing in lowered odds of a fed rate hike by year end. Odds of a 25 bps hike to .50% by December is near 20%…Read More

Category: MacroNotes

8,893 “Bill Millers”

> I am especially pleased to present today’s Think Tank piece by James Bianco. Jim has run Bianco Research out of Chicago since November 1990. He has been producing fixed income commentaries with a circulation of hundreds of portfolio managers and traders. Jim’s commentaries have a special emphasis on: money flow characteristics of primary dealers,…Read More

Category: Index/ETFs, Investing, Think Tank

Show Me The Shoots or we’ll see a bath tub shaped recovery

Show Me The Shoots, the green shoots that is. It is what every investor is watching and looking for as we begin Q2 earnings season, with guidance being of the utmost importance. The shape of the 2nd half recovery will hopefully get some clarity. Since I believe consumer spending will remain punk, if inventory restocking…Read More

Category: MacroNotes

King Report: More Goldman Intrigue

> FT’s Alphaville published the resume of Serge Alevenkov, the indicted Goldman programmer: VP, Equity Strategy Goldman Sachs (Public Company; GS; Investment Banking industry) May 2007 — Present (2 years 3 months) • Lead development of a distributed real-time co-located high-frequency trading (HFT) platform. The main objective was to engineer a very low latency (microseconds)…Read More

Category: Think Tank

Rising Delinquencies Revive Credit Concerns, Hit Markets

Good Evening: The U.S. equity markets took another shot to the chin today when rising delinquencies for Home Equity Lines of Credit reminded investors just how important and impactful will be the rising rate of unemployment to our economy going forward. Known as HELOCs among credit cognoscenti, home equity lines join prime mortgages and credit…Read More

Category: Markets, Think Tank