InvestMacro Forex News

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 27 Sept, 07:15 EST

WHOLESALE-MARKET prices to buy gold eased $5 in London on Thursday after an overnight rally to $1760 per ounce.

The Euro currency also eased lower after rallying to $1.29 – some 2¢ below the 5-month high hit a fortnight ago – as Spain was set to unveil its latest government budget cuts and Italy’s economy minister said Rome has no plans to request bail-out help.

Asian and European stock markets rose and major-economy “safe haven” bonds ticked lower.

US crude oil rallied back above $90 per barrel. Silver prices held in a tight range above$34.00 per ounce.

“Wednesday trading was dominated by a strong US Dollar,” says a note from German universal bank Commerzbank. “It pushed [all] precious metals lower.”

Although prices to buy gold “recovered almost all of [their] losses on Wednesday,” says the latest technical analysis from London market-maker Scotia Mocatta’s New York team, “gold broke through the bottom of the recent range on an intraday basis.

“This is near term bearish, but…we could retreat to $1712 without damaging the longer term uptrend. We believe that gold will try to test this level.”

“Gold [on Wednesday] finally had a decent flushout,” says the Asian office of Swiss refiner and finance group MKS.

Yesterday’s “rebound off [2-week] lows suggests there are still players waiting to buy gold on the dips.

“This was a healthy correction to clean out weak positioning, and long term probably just what the market needed.”

On the supply side today, Bloomberg News reports that 39% of gold mining output in South Africa – the world’s former #1 producer – has been closed after fresh wildcat strikes hit gold majors AngloGold and Goldfields.

New wage demands handed to managers at Anglo yesterday ask for 16,000 to 18,500 Rand per month. Rock drill operators currently average some 10,000 Rand according to local press – equivalent to US$1200.

The world’s third largest gold mining firm, Anglo has now suspended at all of its South African operations according to the Independent Online.

Over in platinum – where South Africa remains the world’s #1 producer, and where this year’s “strike season” first broke – the CEO of Anglo American Platinum said Wednesday that Amplats “will not negotiate” with workers on illegal strike at its key Rustenburg operation.

Last week, wildcat strikers won a 22% raise from platinum producer Lonmin, whose Marikana mine saw 34 workers killed by police in rioting this month.

“There’s no question it has caused massive damage to us and incredible damage to South Africa’s mining sector,” says Albert Wocke, associate professor at University of Pretoria’s Gordon Institute of Business Science.

With formal unions, all closely tied to the ruling ANC party, cut out of Lonmin’s negotiations, “The government needs to step up and reassure investors,” says Wocke.

“We have got an unstable, almost unpredictable regulatory regime.”

Political analyst William Gumede, also speaking to the LA Times, warns that “The biggest red flag is that people might actually start losing their trust in democracy as a protective mechanism.”

After the deaths at Marikana , “I think the police will feel constrained,” Gumede adds, “in how they deal with these strikes now.”

Meantime in Europe, the Spanish government was widely expected to announce sharp new cuts to its 2013 budget, ignoring protests earlier this week and striving to avoid tighter demands from international lenders if – or when – Madrid makes a formal request for help.

“Italy is doing, I believe, a very good job in reforming its economy and without the need for any extra help,” said Rome’s economy economy Vittorio Grilli last night, after meeting with Germany’s central bank president Jens Weidmann.

“At this point, it is not within any plan of the Italian government to apply for any programme. We are solving Italian problems within our government mandate.”

Reuters meantime reports that “tensions have risen in recent weeks” between Greece’s three official-sector lenders.

After the European Central Bank last week moved to start buying more weak-Eurozone debt in the bond markets, “The problem is between the IMF and the European Union,” says an anonymous Greek official, blaming the International Monetary Fund for wanting to impose harsher budget cuts on Athens to try and reduce its debt burden more quickly.

Adrian Ash
BullionVault

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

The Australian dollar made gains this morning on the back of speculation that the recent round of stimulus in China could have positive effects on the Australian economy.  It is hoped the package would boost exports for the world’s largest mining country due to China’s reliance on metals for its manufacturing sector, which has now seen five consecutive months of decline.

“It’s early days yet but the speculation will only have positive effects on the Australian dollar. Realistically this could very well cushion the recent blow to Aussie mining, which has only just exited a boom” said Marcus Holland, Editor at ExchangeCurrency.com.

The Aussie was up by 0.25% on the news, sitting at $1.0397 at 8:16am in London. Just 24 hours earlier the dollar had been at a two-week low of $1.0329. Earlier in the morning it had peaked at $1.0428 before contracting.

After gaining 0.4% on the yen, AUD pared its earlier rise to decline by 0.23% at 80.8054 yen per dollar.

China also hits US dollar

Elsewhere the US dollar fell against a large majority of the global economy’s most traded currencies. As Asian markets rallied on the back of Chinese stimulus, demand for the dollar fell, encouraging investors to become less focused on risk aversion.

While the unprecedented £94bn stimulus package announced on September 7th was enough to cause the Shanghai Composite Index to jump by more than 3.5% and increase prospects for manufacturers of steel.  It is widely believed that the next package would have a much broader range of effects. Many analysts suspect that it will be announced shortly after the Chinese National Day, which falls on the 1st of October.

The US dollar fell 0.15% against the Pound, 0.21% against the Canadian dollar and 0.05% against the yen in what proved to be a disappointing morning for the world’s most prominent currency.

USD has enjoyed strong growth of late as investors across the globe look for a safe haven amid concerns for the stability of the euro. The European debt crisis has been an on-going threat to investors who look to the US dollar and more recently the Swedish krona, in times of widespread decline as a method of wealth protection.

The People’s Bank of China is not known for its subtle approach to financial issues, with their “weekend policy adjustments” becoming something of a running joke among market insiders and currency traders alike.

In 2010 the central bank announced a 4 trillion Yuan round of stimulus focused on the infrastructure of the nation, with a portion set aside for “social welfare”. The total package, which translated to around $585bn was on par with a move made by the US Federal Reserve around the same time, yet the Chinese economy was two thirds smaller than its American counterpart.

Marcus Holland added “Such drastic actions from the People’s Bank of China in the past, or perhaps even over reactions, have given investors’ confidence that the next stimulus package will come and it will be big. That is bound to have a dramatic effect in both Asian markets and the countries it imports from”.

By TraderVox.com

Tradervox.com (Dublin) – The sterling pound has strengthened against the dollar for the first time in four days after the UK government report showed that the economy has contracted less than it was estimated, signaling UK economy is improving. The disposable income also increased last month. The UK currency also improved against the euro to its strongest level in three weeks after protests erupted in Spain calling for the reversal of austerity measures. The government report showed that the UK economy contracted by 0.4 percent in the second quarter compared to the 0.5 percent projected by economists.

Simon Derrick, who is the Chief Currency Strategist at the Bank of New York Mellon Corp, said that the numbers from the Office of National Statistics have boosted sentiments that the UK is the preferred safe haven currency from the troubles in euro zone. He pointed out that the troubles in Greece and the continue protest in Madrid are the main focus. In Spain, protesters started to demonstrate yesterday near parliament building and have continued today despite police detaining some of the protesters. The cabinet meets today to pass austerity measures aimed at curbing the debt crisis in the country.

According to Paul Robson, a Foreign Currency Strategist in London at Royal Bank of Scotland Group Plc, said that the continued worries in Europe will only drive investors to buy more sterling. The pound has advanced by 2.2 percent this year among the top ten traded currencies in developed countries. The euro has clashed 3.4 percent while the US dollar has dropped by 2.5 percent.

The sterling pound advanced against the dollar for the first time in four days by 0.2 percent to exchange at $1.6203 at the start of trading in London today. The currency traded 0.3 percent low against the yen exchanging at 79.37 pence per euro. It had earlier appreciated to its strongest since September 6 of 79.24.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

By TraderVox.com

Tradervox.com (Dublin) – The 17-nation currency remains low against the dollar as Spain prepares to present it budget cuts to boost the economy. The euro has fallen against the yen for more than a week after reports from Germany showed that unemployment increased in the country for the sixth month. The unemployment is due to the slowing global economy and the debt crisis in Europe which has escalated, forcing companies to hold on their gains. The dollar index remained unchanged prior to the release of a report projected to show US durable goods orders dropped in August. According to Lutz Karpowitz, the focus today is on Spain, which has enhanced the pressure on the euro. Karpowitz, who is a senior foreign-exchange strategist in Frankfurt at Commerzbank AG added that the pressure on the euro will continue even after the Spanish budget as the tensions in the country and Greece remains high.

The Greek exit from the euro zone has been discussed by several leaders in the region, with Czech President Vaclav Klaus saying that the exit of one or more member states will not destroy the monetary union. Czech Republic, which is aspiring to join the euro zone, has indicated that it is under no pressure to join the common currency. Czech President termed the troubled Greece as a “victim” of the monetary union.

The 17-nation currency remained at $1.2874 at the start of trading in London today after declining to its lowest since Sept 12 of $1.2835. It remained at 100.03 yen per euro, extending its longest declines since May 31. The yen remained strong against the dollar at 77.70 yen per dollar. Economists are predicting that the euro may weaken to $1.22 by the year end. The Spanish cabinet will meet at 11a.m Madrid time and later a press conference will be held. The draft law on austerity measures will be presented to parliament on Sept. 29.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Article by AlgosysFx Forex Trading Solutions

On additional signs that the US economy remains rather fragile as the global economic backdrop deteriorates, the US dollar is foreseen to gain alongside its Aussie counterpart today on risk-off trades. Gauges of business spending and housing are believed to underscore the tepid pace of growth the world’s largest economy is apt to undergo in the coming months. Meanwhile, European debt jitters are presumed to heighten further as the markets nervously await developments out of Spain.

Economists say that a slump in demand for aircrafts and slowing business investment likely drove durable goods orders to plunge by its fastest rate since January 2009. Total bookings for goods meant to last at least three years are estimated to have dropped by 4.7 percent in August, offsetting the strong 4.1 percent gain in the previous month. On the positive side, Core Durable Goods Orders are presumed to have gained 0.2 percent, modestly recovering from the 0.6 percent drop recorded in July. According to economists the report will likely underline cautious spending among businesses in response to growing signs of cooling global growth and the unsettles budget situation in the US. Similarly, slowing growth from Europe to China is also hampering exports, another headwind for American manufacturers.

Meanwhile, despite encouraging trends in the housing market recently, today’s Pending Home Sales report is deemed to dampen optimism over the sector. The National Association of Realtors is awaited to report that the number of homes under contract to be sold dipped by 0.4 percent in August, turning around from the 2.4 percent rise in the prior month. Although the figure is unlikely to suggest that housing is once again easing, the report could temper positive expectations for the housing recovery. As a forward-looking indicator, a decline in pending home sales indicates weaker construction activity in the future. A sluggish labor market is deemed to have deterred demand for homes during the month. The US Labor Department is awaited to disclose that Unemployment Claims came in at 378,000 in the previous week, slightly lower than the 382,000 count registered in the prior week. Economists say that with jobless claims at their current levels, September could be another month of lackluster job growth. Given such downbeat economic reports from the US, the appeal of the safe haven Greenback is presumed to incline.

Meanwhile, Spain is currently at the front and center of the European debt crisis as investors fear that Madrid cannot control its finances and that Prime Minister Mariano Rajoy lacks the political power to take unpopular measures. Demonstrators gathered near Parliament in Madrid yesterday for a second day of austerity strikes, leaving borrowing costs to rise above 6 percent for the first time since September 18. Today, Rajoy is set to present his 2013 austerity budget which could be a precursor to seeking a sovereign bailout, potentially activating the European Central Bank’s bond-buying scheme. Analysts warn, however, that increasing pressure from protesters could limit the government’s resolve. Considering these, a short position is recommended for the AUD/USD today.

For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx

By Central Bank News
    The central bank of the Czech Republic cut its benchmark two-week repo rate by 25 basis points to 0.25 percent, a move that had been expected by economists.
    The rate cut by the board of the Czech National Bank (CNB) follows a similar 25-basis-point cut in June, bringing this year’s rate reduction to 50 basis points.
    The CNB also cut its Lombard rate by 75 basis points to 0.75 percent, while the discount rate was cut by 15 points to 0.10 percent. The new rates take effect on October 1.
    The Czech economy has been contracting for the last four quarters, leading economists to expect that the CNB would either cut rates further or undertake some form of quantitative easing.
    In the second quarter, the Czech Gross Domestic Product fell by 0.20 percent, after a 0.8 percent contraction of the first quarter. The annual shrinkage of the GDP was 1.0 percent in the second quarter.
    Inflation in August rose to 3.30 percent, up from 3.10 percent in July. The CNB targets inflation of 2.0 percent.

    www.CentralBankNews.info

Source: ForexYard

Investor concerns regarding Spain’s ability to handle its debt issues once again weighed down on the euro, which hit a two-week low against the US dollar during trading yesterday. The news also resulted in bearish movement for commodities, like crude oil which fell below the psychologically significant $90 a barrel level. Today, traders will want to pay attention to several economic indicators out of both the euro-zone and US. An Italian 10-year bond auction will provide important clues as to how quickly the euro-zone economic recovery is progressing. In addition, the US Core Durable Goods Orders, Unemployment Claims and Pending Home Sales have the potential to create market volatility.

Economic News

USD – Batch of US News Set to Create Dollar Volatility

The US dollar saw modest gains yesterday, as risk aversion in the marketplace, due to euro-zone debt concerns, caused investors to shift their funds to safe-haven assets. The USD/CHF traded as high as 0.9416 during European trading, up just under 30 pips, before a mild downward correction brought the pair to the 0.9410 level. Against the Canadian dollar, the greenback advanced close to 40 pips before peaking at 0.9842. A slight downward correction brought the USD to 0.9835 by the evening session.

Today, traders will want to pay attention to a batch of potentially significant US news. Specifically, the Core Durable Goods Orders and Unemployment Claims, both scheduled for 12:30 GMT, followed by the Pending Home Sales at 14:00, have the potential to create market volatility. Any better than expected news could help the greenback extend yesterday’s gains during mid-day and afternoon trading. At the same time, traders should note that if any of the data comes in below the forecasted levels, the dollar could turn bearish.

EUR – Euro Slides Further amid Debt Worries

The euro took losses against virtually all of its main currency rivals yesterday, as fears regarding Spanish debt and rising borrowing costs led to risk aversion in the marketplace. The EUR/USD, which only last week was at a four-month high, fell some 40 pips yesterday to trade as low as 1.2836, its lowest point in two weeks. Against the British pound, the euro dropped more than 20 pips to trade as low as 0.7939. A modest upward correction brought the common currency to 0.7947 toward the end of the European trading.

Today, in addition to any of the ongoing developments regarding the Spanish debt crisis, euro traders will also want to pay attention to an Italian ten-year bond auction. High Italian borrowing costs were one of the contributing factors behind the euro’s bearish movement over the summer. Should today’s bond auction indicate decreased demand for Italian debt or an increase in borrowing costs, the euro may extend yesterday’s bearish trend.

Gold – Risk Aversion Causes Gold to Tumble

A strengthened US dollar due to risk aversion in the marketplace yesterday resulted in the price of gold tumbling throughout the day. A strong dollar means that gold is more expensive for international buyers and typically causes the precious metal to fall. Overall, gold fell close to $30 an ounce during mid-day trading, eventually reaching as low as $1736.20.

Today, gold traders will want to pay attention to a batch of US data including the weekly Unemployment Clams and Pending Home Sales figures. Any better than expected news could result in the greenback extending its recent upward trend, which could result in additional bearish movement for gold.

Crude Oil – Crude Oil Falls Close to $2 a Barrel

The price of crude oil fell throughout the day yesterday, as investors chose to shift their funds from higher-yielding assets to safe-haven currencies due to concerns about euro-zone debt. Overall, the commodity fell close to $2 a barrel, eventually reaching as low as $88.93.

Today, data out of the US may be able to help crude oil recover some of its recent losses. Traders should note that any better than expected US news may signal to investors that demand for oil may increase, which could result in bullish movement for the commodity. At the same time, should any of the news disappoint, the price of oil could fall further.

Technical News

EUR/USD

The Bollinger Bands on the weekly chart are beginning to narrow, indicating that a major price shift could occur in the coming days. A bearish cross on the same chart’s Slow Stochastic signals that the price shift could be downward. Opening short positions may be the wise choice for this pair.

GBP/USD

The weekly chart’s Slow Stochastic has formed a bearish cross, indicating that this pair could see downward movement in the coming days. Furthermore, the Williams Percent Range on the same chart has crossed into overbought territory. Traders may want to open short positions for this pair.

USD/JPY

Both the Relative Strength Index and Williams Percent Range on the weekly chart are approaching oversold territory. Traders will want to keep an eye on both of these indicators. If they cross below the oversold line, it may be a sign of impending upward movement.

USD/CHF

While a bullish cross has formed on the weekly chart’s Slow Stochastic, most other long-term technical indicators place this pair in neutral territory. Traders may want to take a wait and see approach for this pair, as a clearer picture is likely to present itself in the near future.

The Wild Card

AUD/NZD

The MACD/OsMA on the daily chart has formed a bullish cross, signaling that this pair could see upward movement in the near future. Furthermore, the Williams Percent Range on the same chart has crossed into oversold territory. This may be a good time for forex traders to open long positions.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By Central Bank News
    The central bank of Romania held its monetary policy rate unchanged at 5.25 percent, as expected by economists, and said it would also ensure adequate liquidity in the banking system and maintain existing levels of minimum reserve requirements.
    The National Bank of Romania said  details about its decision would be presented later today.
    Romania’s central bank cut its policy rate in February and March for a total reduction this year of 50 basis points.
    Romania’s Gross Domestic Product expanded by 0.50 percent in the second quarter for an annual growth rate of 1.7 percent, up from 0.30 percent.
    The inflation rate in August rose to 3.9 percent , up from 3.0 percent, due to the higher cost of food from drought . The central bank targets annual inflation of 2-4 percent.
     www.CentralBankNews.info

Source: ForexYard

The euro saw very minor upward movement during the first half of Asian trading and eventually gained close to 30 pips to trade as high as 1.2899. That being said, the common currency was not able to sustain its bullish movement, and quickly reversed virtually all of its gains. The EUR/USD is currently trading at 1.2870, not far from a recent two-week low of 1.2834. Crude oil was able to largely maintain its gains from yesterday, after a lower than expected US inventories report signaled an increase in demand in the world’s largest oil consuming country. The commodity is currently trading at $90.10, up over a dollar from yesterday afternoon.

Main News for Today

Italian 10-Year Bond Auction
• Fears of rising borrowing costs in the euro-zone have led to risk aversion in the marketplace this week
• Any indication that Italian borrowing costs have gone up may lead to additional euro losses today

US Core Durable Goods Orders- 12:30 GMT
• The indicator is forecasted to come in significantly higher than last month’s
• If the final result comes in above the forecasted 0.2%, the USD could see gains against its main currency rivals

US Unemployment Claims- 12:30 GMT
• Forecasted to come in slightly below last week’s figure
• Anything below the expected 378K could help the US dollar in afternoon trading

US Pending Home Sales- 14:00 GMT
• Forecasted to come in at -0.4%, significantly below last month’s 2.4%
• Any worse than expected news could weigh down on the US dollar vs. the JPY

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.