Precious Metals Market Report
Wednesday 05 July, 2017
Fundamentals and News*
Yen Rises With Gold as Asia Stocks Open Mixed
Geopolitical concerns loomed over financial markets for a second day, as sabre-rattling over North Korea’s nuclear weapons program sent investors seeking out haven assets such as the yen and gold, while stocks opened mixed.
Equities in Australia slipped, while Japanese and South Korean shares were slightly lower, with U.S. equity and bond markets set to reopen after the July 4 holiday. The yen and gold climbed for a second day after the missile launch fanned concern North Korea is closer to building a device capable of hitting the U.S. Oil continued its rebound.
The U.S. confirmed the rocket launched on July 4 was an intercontinental ballistic missile. North Korea now may be capable of striking the U.S. — possibly Hawaii or Alaska — though it’s believed to be some way from the capability to deliver a nuclear payload to the U.S. mainland. Kim Jong Un is “firmly determined and committed” to test an ICBM that can hit the U.S. mainland within this year, the state-run Korean Central News Agency said in a statement.
Markets in the past have shown a capacity to quickly move beyond periods of tension on the Korean peninsula following short bouts of risk aversion. The stock market opening in Hong Kong will be closely watched after a pronounced sell-off there on Tuesday saw technology shares tumble.
Elsewhere, the Federal Reserve is due to release minutes from its June policy meeting, the latest clues for investors on the path for U.S. interest rates ahead of Friday’s key jobs report. Equity investors this year have put their faith in a global economic recovery, helping spur all-time highs in global stocks, whereas bond buyers appear less sanguine on the outlook, doubting Fed rate hike plans.
Adair Turner, Jon Moulton and Mark Gilbert discuss the outlook for the global economy and monetary policy.
Political turmoil on the Korean peninsula comes ahead of the G-20 summit in Hamburg this week as the United Nations Security Council prepares to host an emergency meeting Wednesday. U.S. President Donald Trump will attend the G-20 and is expected to hold his first meeting with Russia’s Vladimir Putin as well as meet his Chinese counterpart Xi Jinping. Read more on U.S.-China relations and North Korea here.
The big economic event of Asia’s day will be the release of China’s Caixin Services Purchasing Managers’ Index, which came at 51.5 in May. Both theprivate and official readings for the manufacturing sector in the world’s second-largest economy were better than expected in June. Also coming are the Bank of Thailand’s interest-rate decision, Philippines inflation data for June, and Japan’s Services PMI for June.
The yen rose 0.3 percent to 112.93 per dollar as of 9:12 a.m. in Tokyo after climbing as much as 0.6 percent during Tuesday’s session.
Gold advanced 0.3 percent to $1,227.28 an ounce following its 0.3 percent climb on Tuesday.
(*source Bloomberg)
Data – Forthcoming Release
Technical Outlook and Commentary: Gold
Gold for Spot delivery was closed at $1223.42 an ounce; with gain of $3.22 or 0.26 percent at 1.00 a.m. Dubai time closing, from its previous close of $1220.2
Spot Gold technically seems having resistance levels at 1246.3 and 1254.9 respectively, while the supports are seen at $1218.2 and 1209.5 respectively.
Technical Outlook and Commentary: Silver
Silver for Spot delivery was closed at $16.08 with loss of $0.05 or 0.31 percent at 1.00 a.m. Dubai time closing, from its previous close of $16.13
The Fibonacci levels on chart are showing resistance at $16.67 and $16.87 while the supports are seen at $16.01 and $ 15.81 respectively.
Resistance and Support Levels
Indications only, open & closing prices are bids; data source: Bloomberg; important disclaimer below; Times as per Dubai
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