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United Market Commentary

Friday, March 17, 2017


Market Commentary - March 17, 2017

"STEADY". That is the operative word that best summarizes the bullion activity for the global trading day. The market recovered from its implied weakness earlier in the week due, in no small part, to the FOMC statement following the more than expected 25bp interest rate increase. A slightly oversold market rebounded on the Fed's not too "aggressive" approach to rate hikes, leading to a selloff in the U.S. dollar and a corresponding rise in metals prices. With the market closing the week without giving back the recent gains, look for a test to the upside early in the week to see if the buying interest we saw before the FOMC hullaballoo returns to the metals.

The Far East began at $1226 and fell into a range of $1225 (day low) to $1227 for the entire Hong Kong trading day. Oddly, London was the "mover"; rising from $1226 to $1230 during their day.

New York opened at $1228 and did move to the day high of $1230 by fixing time. For the rest of the session, a range of $1227 to $1229 covered the activity for the day. Gold closed the week at
$1228.50.

Michael Mikolay

Thursday, March 16, 2017


Market Commentary - March 16, 2017

The gold market saw some early following through buying on Thursday with analysts still digesting the wording of the FOMC statement release yesterday. After some technical buying early in the New York day dissipated, gold fell back into a quiet range for the remainder of the day. With the Fed statement deemed as not "hawkish" on interest rates as it could have been, the U.S. dollar seems to have stalled in its upward momentum and begun to decline modestly. This may underpin gold for the short term and allow bargain hunters to begin to re-establish positions liquidated in front of the anticipated interest rate increase.

Sydney began at $1219 and saw early buying in Hong Kong, with gold rising through their hours, touching $1228.50 before closing at $1226. London did not show any buying interest at all and, in fact, saw light selling which pushed gold down to $1224. Light buying in front of NY trading lifted the market to a close of $1226.

New York opened at $1227 and saw immediate buying, with gold rising to the intraday high of $1234. As the buying dried up, the metals saw short term profit taking, with gold falling back to $1226 by fixing time. Although steady for the remainder of the trading day, gold fell into a narrow range of $1229 to $1225 until the close of $1225.50 in quiet conditions.

The Market Closes the week with:

9:15am Industrial Production for February - cons. +0.2%

10:00am Consumer Sentiment Index for March (preliminary) - cons. 97.2

10:00am Leading Economic Indicators for February - cons. +0.4%

Michael Mikolay

Wednesday, March 15, 2017


Market Commentary - March 15, 2017

Well, the FOMC did what was expected. In the last several trading sessions, the precious metals markets have sold off in anticipation of what they expected the FOMC to do - raise interest rates. So when it finally happened, gold went higher. Why? A bit of a relief rally combined with an oversold market all slightly relieved at the Fed's admission that it anticipates only two more rate increases this year. Some thought three were in the cards. Gold rose almost twenty dollars as the Federal Reserve increased interest rate by the 25bp everyone thought they would. Could the FOMC set the precedent of rate tightening with several Central Bank meetings scheduled around the world? Could world currencies rally as a result and set the stage for a U.S. dollar decline vis-à-vis other global currencies? The next week could be interesting.

The market continued its malaise in front of the Fed announcement with Asia opening at $1198 (the low of the day) and rising above the $1200 level in early Hong Kong. A range of $1200 to $1204 covered both the Far East and European theatres.

New York began at $1205.50 and fell back to $1203 early on before falling into a $1203 to $1206 range until the announcement. Fed Chair Yellen noted that the economy is growing at an expected pace. However, the Fed will remain accommodative - for the short term. Note the quote:

"The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is like to remain, for some time, below levels that are expected to prevail in the long run"

Gold moved sharply higher on the wording, rising $1212 at once, then continuing to the day high of $1220 by late afternoon. A modest pullback to $1219 ended the session. Look for more follow through buying early overnight then a leveling off to see if the "bears" return.

Tomorrow brings:

8:30am Jobless Claims - cons. 240,000

8:30am Housing Starts for Feb - cons. 1.270 M units // Permits - cons.1.270 M units (both annualized)

8:30am Philadelphia Fed Business Outlook Survey Index for March - cons. 30.0

Michael Mikolay

Tuesday, March 14, 2017


Market Commentary - March 14, 2017

Gold faded late in the New York session as the expectancy of an FOMC interest rate increase lifted the U.S. dollar once again in light trading. Inclement weather on the East Coast kept many traders at home today and weakening oil prices in a decidedly thin market all helped to apply pressure to the market during the afternoon hours. All attention turns to the FOMC - where the rate increase is largely "baked into the cake". However, the statement release by the Fed is the "pudding" inside. Look for the usual insight and prognostication by qualified (and unqualified) analysts to skew the market one way or another - at least for 24 hours.

The mostly quiet day began in the Sydney after a $1204 start, with gold falling first to $1202 before rising back to opening levels in early Hong Kong and trading within that range all day. Only late slippage heading in European hours pushed gold to test the $1200 level. London recovered back to $1204 fairly quickly and also became quiet, only rising to $1205.50 in their last hour of trading.

New York began at $1206 but ran into immediate selling, "see-sawing" between $1202 and $1206 through midday (briefly touching the day high of $1206.50). Appearing to struggle after midday, late afternoon saw some selling interest at the $1202 level, with gold falling quickly to the day low of $1197. A modest recovery (very modest) in the last ninety minutes of trading lifted gold to a close of $1198.75.

Tomorrow brings a broad spectrum of data for analysis:

8:30am CPI - Consumer Price Index for February - cons. +0.1% // less food & energy - cons. +0.2%

8:30am Retail Sales for February - cons. +0.1% // less autos - cons. +0.2%

8:30am Empire State Mfg. Survey Index for March - cons. 15.4

10:00am Business Inventories for January - cons. +0.3%

10:00am Housing Market Index for March - cons. 66

2:00pm FOMC Announcement - expect a 25bp rise in interest rates. Pay attention to the statement that follows.

Michael Mikolay

Monday, March 13, 2017


Market Commentary - March 13, 2017

Gold closed basically unchanged from Friday in a day with may be best termed "uninspired" by any trading standard. The markets awaited two distinct events on Tuesday, the upcoming FOMC meeting and the upcoming winter snowstorm which threatened much of the east coast by tomorrow afternoon. Both anticipatory events seemed to promote a malaise on financial markets as a whole, although the FOMC forecast tomorrow may be subject to more prognostication than the weather will be.

A $1206 open in Sydney was followed by mostly sideways trading for most of the session. Some late day buying lifted gold to the day high of $1210 before closing Hong Kong at $1209. London drifted lower as the U.S. dollar began to move slightly higher, with gold slipping back to the $1205 level.

New York experienced the most lifeless (sans holiday trading), with a $1204 opening giving way to a $1202.50 to $1205 range for most of the trading day. A late minor selloff pushed gold to close at $1202.

Tomorrow:

8:30am Producer Price Index for February - cons. +0.1% // less food & energy - cons. +0.2%

FOMC Meeting Begins - Look for Announcement at 2:00pm Wednesday


Michael Mikolay


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Precious Metal Spot Prices

  Bid Change
Gold $1,265.19 +$0.64/+0.05%
Silver $17.33 +$0.08/+0.46%
Platinum $944.00 +$2.00/+0.21%
Palladium $813.00 +$2.00/+0.25%
Gold 2017-04-28 2:19 AM
Bid/Ask $1,265.19/$1,265.29
High/Low $1,266.00/$1,263.10
Change +$0.64/+0.05%
Silver 2017-04-28 2:19 AM
Bid/Ask $17.33/$17.34
High/Low $17.38/$17.24
Change +$0.08/+0.46%
Platinum 2017-04-28 2:19 AM
Bid/Ask $944.00/$950.00
High/Low $950.00/$941.00
Change +$2.00/+0.21%
Palladium 2017-04-28 2:19 AM
Bid/Ask $813.00/$823.00
High/Low $823.00/$812.00
Change +$2.00/+0.25%

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Prices shown are for reference only. Please contact our trading desk for accurate, up-to-the-minute pricing.