Commodities Brief – Precious metals consolidate gains ahead as US equities near 2007 highs

Gold has managed to trade unevenly during European trading, as market participants prepare for a post-sequester session in the United States. The yellow metal managed to start the trading week in positive territory, after reaching as high as 1584.65 (intraday maximum), however this proved to be the pinnacle of pricing thus far. In these moments the price of gold has settled at USD $1578.12 per oz., though MACD indicators are negative and the price is being held in check by the 20 and 50-day SMA. Renewed bond buying in the United States coupled with equities trading near 2007 highs also give reason for gold bears to pause.

Silver gains traction at 28.60
The white metal has been unable to make a run at the 29.00 level during European trading, after a previous attempt at the 28.80 region was stymied during the overnight session. At the onset of US trading, silver is operating at USD $28.64 per oz., with its 10-day EMA/initial resistance capping any potential advances for now.

Crude oil continues it’s decent
WTI Crude has continued on last weeks trend, en route to the 90.00 region. Prices managed so stabilize above the 90.00 support/psychological barrier, though renewed questions facing US growth have sparked concerns of mitigated demand. At the time of writing, crude has settled at USD $90.56/bbl Monday.

Mar 4, 2013

Forex Flash: ECB to leave rates unchanged on first signs of economic recovery – Merrill Lynch

Broadly supportive PMI releases for February as well as improving sentiment indicators released by the European Commission are first signs of economic recovery in the Eurozone, but that doesn't mean financial market stabilization. According to the ECB, the "M3 report suggests that credit creation is still very slow in the euro area, with SMEs still finding it hard to obtain credit", wrote Merrill Lynch analysts. "Overall, these data are consistent with our expectation of a moderate contraction (-0.2% qoq) in Q1 2012. Yet these data also confirm our view that divergence is on going across euro area countries", they added, pointing to surging retail sales in Germany in January by 3.1% mom/+2.4% yoy (and the strongest monthly gain in six years) while French consumer spending dropped by 0.8% mom/-0.2%.

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Mar 4, 2013

Forex Flash: Global growth to accelerate by 2014 – Goldman Sachs

According to the Economics Research Team at Goldman Sachs, “We expect a modest recovery in global growth this year accelerating into 2014. European equities in our view remain good value, especially versus bonds. However, near-term risks are high and domestic growth is sluggish. We search for structural growth stories, which are not already heavily priced; we think sectors such as autos, tech, personal & HH goods and healthcare fall into this category. We believe several sectors are facing continuing structural issues including telecoms and oil & gas and would continue to avoid exposure to these areas despite low valuations.”

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