Market Updates

Over the last few weeks, ABC Bullion Chief Economist Jordan Eliseo has been busy preparing a key research report on Bitcoin, Gold and Cryptocurrencies.

This report covers key topics, including:

• The reasons behind the creation of Bitcoin

• The potential for blockchain technology

• A comparison of the monetary qualities of gold, versus fiat currencies and Bitcoin

• Why investors should be nervous about chasing price gains in cryptocurrencies

• Questions investors should ask about the monetary potential of Bitcoin and other cryptocurrencies

• Why gold likely remains the best protector of wealth in an uncertain market environment

For anyone interested in money, be it gold, US Dollars or cryptocurrencies, this report is a must read.

Click the image below to view the full report.

The fragility in the Australian consumer sector was underscored this week by yet another weak set of wages data, with the wage price index coming in well below what the market was expecting, sending the Australian dollar tumbling.

By John Feeney, ABC Bullion

On Monday 30th October, ABC Bullion was fortunate enough to interview Jim Rickards, one of the world’s leading precious metal analysts and author of New York Times bestsellers including the Death of Money, and Currency Wars.

Jim, who’s joining ABC Bullion for the Emirates Melbourne Cup at Flemington, caught up with ABC Bullion's Chief Economist Jordan Eliseo in Custodian Vaults, where he shared his views on a variety of topics, including;

• The performance of gold in 2017 – and how he expects the year to finish

• US Monetary Policy, and what is next for the Fed

• Developments in Catalonia, and their impact on the Euro

• The outlook in China, and how that could affect the Australian economy and AUD

• The potential for military conflict in Korea

• Gold price drivers between now and the end of 2018

Good morning everyone.
 
Thursday saw a few more items ticked off the week’s ‘bucket list’ but gold and silver held station within recent ranges.
 
First cab off the rank was the Bank of England monetary policy announcement. The central bank raised rates (for the first time in ten years) from 0.25% to 0.5% and indicated its intention to move aggressively by hiking 0.25% twice more over the course of the next two years (<sarc off>).

Good morning everyone.
 
Choppy trading within the recent range for precious metals was seen in reaction to the release of a raft of economic data and ahead of the US Federal Reserve’s FOMC monetary policy statement, which ultimately saw the FOMC vote unanimously to leave interest rates unchanged, in line with market expectations.
 
On the economic data front;

• U.S. ADP (Oct) came in +235K (vs +200K expected & negative revised +110K for Sep which was previously +135K)

• U.S. Construction Spending (Sept) was +0.3% (vs Unchanged expected & negative revised +0.1% for Aug which was previously +0.5%)

• U.S. ISM (Oct) came in at 58.7 (vs 59.4 expected and 60.8 in Sep)

It’s been a tough few weeks for precious metals bulls, with the price of gold declining to USD $1,275oz, now down nearly 6% from the levels it was trading at in early September. It has been a similarly tough run for silver, which was trading above USD $18oz barely two months ago, but is currently sitting at just USD $17.20oz, with a substantial overnight rally limiting the decline.
 
A rally in the US dollar, which had been falling for most of the year, has been a major factor pulling gold lower, as has the continued run of all time highs in global stock markets, whilst expectations of a December rate hike by the US Federal Reserve are also pressuring bullion.

Good morning everyone.
 
Mixed trade on Monday saw gold and silver in USD and AUD terms firm modestly as investors understandably took a “wait and see” approach and strapped themselves in ahead of a hectic week that includes;
                                      
MonPol announcements from the Bank of Japan on Tuesday, the US Federal Reserve on Wednesday and the Bank of England on Thursday.
 
An expected announcement by US President Trump (prior to his departure for an 11-day trip through Asia on Friday), nominating the next Chairman of the US Federal Reserve. Market consensus strongly favours Jerome Powell (a current member of the Federal Reserve Board of Governors) succeeding in receiving the nomination to the prestigious and all-important post over Stanford University Economics Professor John Taylor.

Precious metal prices eased in September, with the price of gold declining by nearly 2%, and silver easing by almost 4%. The month had started off strongly, with gold pushing up toward the USD $1,350oz level, but was unable to hold the gains, with continued strength in equity markets (which hit new all time highs), and a rally in USD contributing to the pullback we’ve seen over the last three weeks.

Good morning everyone.
 
Gold and silver trekked sideways in US Dollar terms for the most part during the Far Eastern timezone yesterday, which was affected by National Day of the People’s Republic of China ‘Golden Week’ public holidays. XAU/AUD was given a boost however, after the Reserve Bank of Australia left rates unchanged at 1.50% which torpedoed the AUD/USD and consequently drove XAU/AUD higher.

Good morning everyone and Happy Friday as the curtain comes down on another month (and quarter) for the year.
 
Mixed trade on Thursday saw bargain hunters lift gold and silver away from Wednesday’s post-option expiration 4-week lows (in US Dollar terms). Closer scrutiny of US President Trump’s tax reform plan also saw investor enthusiasm come off the boil to a small degree, leading to the Greenback paring some of its recent gains to the benefit of gold and silver.

Good morning everyone.
 
Gold and silver retreated on Tuesday particularly in US Dollar terms. Profit taking into the North Korean geopolitical news-triggered rally hit the metals as Europe arrived. Additionally, US Federal Reserve Chairman Janet Yellen wrested back the news cycle from North Korea by delivering a speech on “Inflation, Uncertainty, and Monetary Policy” before the National Association of Business Economists in Cleveland which was perceived as hawkish (and thus bearish for precious metals values) by the markets, even though the Fed Chairman kept all policy options open.

Good morning everyone.
 
Event risk came to the fore again on Monday to cast off the weight of last week’s bearish FOMC policy statement on precious metals values and to launch gold, silver and platinum significantly higher overnight. The event risk came in the form of comments from North Korea’s foreign minister at an impromptu press conference in New York.
 
In a continuation of the verbal sparring that has transpired between North Korea and the US Administration since President Trump’s bellicose speech at the UN last week, Foreign Minister Ri Yong Ho stated that “The UN Charter acknowledges member states’ right of self-defence. As the United States has declared a war, even though its strategic bombers don’t cross our border, we will come to own all rights to respond for self-defence including shooting down its planes at any time." "All options are on the table for North Korean response." "The whole world should clearly remember it was the US who first declared war on our country."

Good morning everyone and happy Friday!
 
XAU/USD & XAG/USD remained under pressure as they continued to feel blowback from Wednesday’s FOMC monetary policy announcement in which the US central bank signalled its intentions on interest rates and tackling its $4.5 trillion balance sheet.
 
Paradoxically, Greenback strength / AUD weakness meant that gold and silver in AUD terms closed higher on the day.

Good morning everyone.
 
Precious metal values retreated after the US Federal Reserve Bank’s FOMC left interest rates unchanged (as expected) but signalled the possibility of one more rate hike in 2017 and more importantly, laid out its intentions in relation to its colossal $4.5 trillion balance sheet.
 
The US central bank intends to begin unwinding its holdings of U.S. Treasuries and MBS’s in October by initially cutting up to $10 billion per month from reinvestments. Thereafter the amount will increase by $10 billion every quarter (to a maximum of $50 billion per month) until a balance sheet reduction of at least $1 trillion has been achieved. In other words, the monetary smack that has fuelled the credit bender that the US economy has been on since the 2008 GFC is soon to be withdrawn as the central bank ‘normalises’ its money printing monetary policy and balance sheet.

Precious metal prices have pulled back meaningfully in the past 10 days, with gold falling to just USD $1,309oz, a decline of almost 3% from levels seen in earlier September.

Silver has fallen too, declining by over 5.5% over the same time period, with gold’s little cousin currently trading at around USD $17.28oz.

Australian dollar prices are sitting at $1,638oz for gold, and $21.69oz for silver, with the local currency trading above USD $0.80, largely unchanged over the month, even though iron ore has been clobbered by over 10% over the same time period.

Good morning everyone.

Gold and silver consolidated and tread water on Tuesday ahead of Wednesday’s MonPol announcement by the US FOMC, as the markets await guidance from the Federal Reserve regarding the scope and timing of any potential paring back of the its balance sheet.

Good morning everyone.
 
Precious metals have been on the slide since the air came out of the ‘safe-haven’ trade (i.e. geopolitics) with gold in particular, hitching its caboose to a strong (inverse) correlation to the USD/JPY. Throw into the mix, record US equity market highs and rising US Treasury yields and that just about covers the reasons for the corrective action seen across the precious metals markets.

Good morning everyone and Happy Friday!
 
A tumultuous day in the markets saw gold and silver eventually close near session highs.
 
Gold and silver were driven hither and yon by;

• Disappointing Chinese economic data

• The Wild West of cryptocurrency markets with newswires carrying reports that “China may shut all local Bitcoin exchanges by Sept: YICA”

• The Bank of England keeping interest rates unchanged and hinting at the tightening of the monetary spigots in the months ahead.

• US Treasury Secretary, Steven Mnuchin commenting that: “Although we respect the Fed’s independence, we are concerned about economic growth. We’re doing everything we can -- whether it’s tax reform, whether it’s regulatory relief, whether it’s trade -- to create economic growth. And we’re less concerned about inflation at the moment."

• Reports that the Democratic People’s Republic of Korea were preparing another missile launch

• The Democratic People’s Republic of Korea launching a missile at 6:57am local time, which passed over Hokkaido at 7:06am local time, and came down in the Pacific Ocean, some 2,000 KM east of Japan's Erimo Misaki.

Good morning everyone.
 
Range trading / consolidation was seen in gold for much of the Far Eastern and European sessions on Wednesday but the big move came during US trading when the wick was lit under the beleaguered Greenback (see attached USD Index chart - Daily 2 Years) and consequently gold and silver in USD terms were kicked lower.
 
The catalyst for the US Dollar move, was news filtering out from Administration officials via various outlets that a target date of September 25th had been set to lay out details pertaining to one of President Trump’s key platforms - tax reform.

Good morning everyone.
 
Not a lot to report from Tuesday’s activity in the precious metals markets with intraday speculative jockeying seeing gold drift lower during the Far Eastern session, before buying returned when Europe arrived and finally a ‘pop’ to session highs as gold was alleged to have benefited from Bitcoin getting slammed lower late in the day when newswires carried the following comments from JP Morgan’s Chairman, President and CEO, Jamie Dimon:
DIMON: BITCOIN IS A "FRAUD"; "WORSE THAN TULIP BULBS"
DIMON: BITCOIN WILL EVENTUALLY BLOW UP
DIMON: BITCOIN WON'T END WELL
DIMON: WOULD FIRE ANY TRADER TRADING BITCOIN FOR BEING STUPID

Good morning everyone.

US equities rebounded sharply back towards recent record highs, as last week’s investor bearishness on the back of forecast apocalyptic devastation of Florida in the wake of Hurricane Irma, failed to materialise when the expected Category 5 hurricane (consistent wind speeds of 252 km/h or higher leading to catastrophic damage) made landfall closer to a Category 2 hurricane (consistent wind speeds of 154-177 km/h leading to extensive damage).

Good morning everyone and I trust you had a good weekend.

XAU/USD registered its highest level since mid-August last year as geopolitics, receding yields on US Treasuries, huge ETF demand and record trading volumes on COMEX, disastrous weather events and poor US macroeconomic data weighing upon the Greenback, all underpinned precious metals investor appetite.

Good morning everyone.
 
Gold, having reached its highest level in USD terms since late September last year on Tuesday, (spurred on by geopolitical tensions, receding yields on US Treasuries, a soft Greenback and monster inflows into ETF products. Tuesday saw a record inflow of 9.5 tons bringing to 26 tons the total amount that has been piled onto gold ETF’s since the start of September - which follows an increase of 31.4 tons globally in August), pared gains on Wednesday as President Trump dialled-down recent rhetoric towards North Korea and perhaps more importantly, in a predictably unpredictable move the US President reportedly reached an agreement with Democrat congressional leaders (thereby circumventing GOP leaders who were all opposed to the deal) to pass aid for Hurricane Harvey relief AND to extend government funding until December 15, as well as a 3-month debt limit increase. Thus, any investor uncertainty or speculation surrounding government funding and the debt ceiling was killed stone dead until December 15th.