The Hightower Report

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

OUTSIDE MARKET DEVELOPMENTS: While equity markets in Asia and Europe were sharply lower during overnight trading, early indications are that US equity markets will open with substantial losses later on today. The US Dollar is sharply higher against most of the major currencies this morning. A study conducted by the European Central Bank stated that the current sovereign debt crisis may put the sustainability of the Euro into question. There are reports that Qatar may be in negotiations to take a stake in major French bank BNP Paribas. A private survey of Chinese Manufacturing during August came in at 49.4, a decline of 0.5 from July. A private survey of German Manufacturing during September was 50.0, roughly in-line with forecasts. A private survey of Euro zone Service Industries during September was 49.1, roughly 2 points below market expectations. Euro zone Industrial New Orders during July were down 2.1%, weaker than projections. The Treasury’s quarterly auction of 10-Year TIPS securities will have results announced today at 12:00 PM. Major US economic numbers to be released this morning include Weekly Jobless Claims at 7:30 AM, and a private survey of Leading Economic Indicators at 9:00 AM.

GOLD MARKET FUNDAMENTALS: Clearly the fear of global slowing and historic easing measures from the US Federal reserve have failed to inspire fresh investment in gold overnight, as gold prices have slumped to the lowest level since August 26th. Surprisingly the dollar has also remained in favor, despite the news of additional quantitative easing yesterday and that has probably added to the aggressive liquidation tilt in gold over the last 24 hours. In fact, with manufacturing readings from China and the Euro zone coming in below the growth/no growth line on the charts, the trade is embracing the threat of recession and that apparently fosters liquidation action in gold. While the need to raise margin capital for equity market positions is probably causing some of the slide in gold prices this morning, there would also seem to be some players exiting gold because of fears that slowing will result in a bad overall environment for gold and commodities. In other words, simply seeing a global recession might not be “enough” uncertainty for gold. However, some gold traders are holding out hope that something even worse than a global recession could be seen, in the event the euro zone fails or breaks up and that is probably serving to cushion gold against even more aggressive liquidation. In the early action today, traders apparently fear equity market spillover selling pressure in gold and that in turn could make the US claims release an important pivot point for gold traders. While there are speeches today from the Treasury Secretary, the World Bank President and the Managing Director of the IMF, it is unlikely commentary can alter the macro economic expectation of further and more severe slowing ahead. Comex Gold Stocks were 11.409 million ounces down 610 ounces.

SILVER MARKET FUNDAMENTALS: December silver has also managed a downside breakout overnight and in the process the market fell to the lowest level since August 12th. Like gold, a higher dollar and fears of slowing have resulted in a negative vibe toward commodities and precious metals. Certainly the fear of equity market margin calls, has fostered some liquidation of silver and gold but one would think that relationship would become less significant going forward. Apparently silver traders are seeing a return to global slowing as a negative and it could take something very significant like a US credit rating downgrade or a Euro zone break up to rekindle flight to quality interest again. Given the fact that December silver has fallen below a series of points on the charts overnight, some traders expect to see a measure of follow through technical selling today. As in gold, the silver market is likely to see some reaction to the US claims data, but it is unlikely that a single second tier economic reading will be able to dramatically alter what is becoming an entrenched expectation of a return to recession. A number of traders are suggesting that silver might have little in the way of support until the $37.50 level, which was a pivot point for the market back in the early August correction. Comex Silver Stocks were 104.393 million ounces down 858,819 ounces.

PLATINUM: Given the sharp range down failure in platinum, one could quickly come to the conclusion that platinum is tracking its classic physical commodity market fundamentals. Therefore, fears of slowing and evidence of slowing are likely to throw platinum prices back toward the early summer lows. At least in the near term, classic internal supply and demand fundamentals might be tossed aside as big picture recession views are prompting capital flight from almost all commodities, into what seems to be a limited number of safe haven instruments. For the time being, lofty analysts price goals for platinum are discounted and the negative flow of outside market action looks to dominate. Next downside targeting in October platinum could be $1,708, with $1,675 possible if the threat of a global recession is fully priced.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

OUTSIDE MARKET DEVELOPMENTS: While equity markets in Asia were generally lower during overnight trading, stock indices in Europe are stronger this morning. Early indications are that US equity markets will open with substantial losses later on today but well above their overnight lows. The US Dollar is close to unchanged levels against most of the major currencies this morning, with large gains forged versus the Swiss Franc and Japanese Yen. The Swiss National Bank announced that the Swiss Franc will have a minimum exchange rate of 1.20 Francs to the Euro. The German Finance Minister stated that Greece will get no more emergency debt aid if that nation does not receive a positive result from ECB and IMF inspectors. Euro zone Retail Sales during July were up 0.2%, above market forecasts. Euro zone GDP during the second quarter was up 1.6% year-on-year, in line with expectations. The only major US economic number to be released this morning will be a private survey of US non-Manufacturing industries during August at 9:00 AM. In addition, Fed Regional President Kocherlakota will give a speech during the session.

GOLD: The gold market ramped up to another new high overnight but that action was tempered somewhat by reports of currency intervention overnight. While gold seemingly became short term technically overbought, with the sharp upward extension overnight, residual macro economic uncertainty toward the US economy and renewed European debt concerns have rekindled safe haven interest in gold regardless of the adverse currency market action. Some gold traders might even suggest the Swiss Franc was damaged as a flight to quality instrument by the SNB peg and that in turn leaves gold as part of a shrinking flight to quality contingent. While US equities are expected to open sharply lower this morning and that might add to the uncertainty in the marketplace, it could take a noted decline in the ISM Non Manufacturing reading to push fresh additional buying into gold, especially after the additional range up action this morning. The gold market could have garnered some support from news that the Russian central bank was planning to buy some gold this week, but the quantity of that anticipated purchase wasn’t that significant. The gold market might also be impacted by a Fed speech around mid session today, as the promise of easing from the Fed might tamp down some macro economic concerns. Comex Gold Stocks were 11.584 million ounces up 7,570 ounces. Gold stocks have increased 11 of the last 20 days. The Commitments of Traders Futures and Options report as of August 30th for Gold showed Non-Commercial traders were net long 232,638 contracts, a decrease of 15,331 contracts. The Commercial traders were net short 274,457 contracts, a decrease of 15,182 contracts. The Non-reportable traders were net long 41,820 contracts, an increase of 149 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 274,458 contracts. This represents a decrease of 15,182 contracts in the net long position held by these traders.

SILVER: At least in the early US Tuesday action, the December silver contract was unable to take out the prior session’s high and that seems to have prompted talk overnight that silver is destined to lag behind gold prices. It is possible that silver is being partially held back by its industrial component, but with the intervention seen against the Swiss, some traders are suggesting that the list of effective flight to quality instruments has been reduced and that in turn could ultimately benefit the silver market. In another element that could be detracting from the bullish bias in silver, the trade saw news recently that Mexico had become the world’s largest silver producer, but since that was the result of a 1st half 2011 decline in silver production from Peru, many traders probably come away from that news with a somewhat bullish supply side vibe for silver. Comex Silver Stocks were 102.891 million ounces down 1,446,794 ounces. Stocks have declined 11 of the last 20 days. The Commitments of Traders Futures and Options report as of August 30th for Silver showed Non-Commercial traders were net long 33,577 contracts, a decrease of 1,936 contracts. The Commercial traders were net short 53,599 contracts, a decrease of 3,704 contracts. The Non-reportable traders were net long 20,022 contracts, a decrease of 1,767 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 53,599 contracts. This represents a decrease of 3,703 contracts in the net long position held by these traders.

PLATINUM: While platinum did manage a temporary higher high for the move overnight, it wasn’t able to return to its contract highs. Like silver, platinum seems to be periodically undermined by its physical commodity market roots. However, the platinum market recently hasn’t paid that much attention to classic physical fundamentals lately and that suggests that a flighty to quality focus generally remains in control of prices. In fact, the market doesn’t seem to be that interested in the prospect of a major platinum miner being forced to sell partial ownership to the Zimbabwe government. The Commitments of Traders Futures and Options report as of August 30th for Platinum showed Non-Commercial traders were net long 26,942 contracts, a decrease of 1,582 contracts. The Commercial traders were net short 33,155 contracts, a decrease of 1,233 contracts. The Non-reportable traders were net long 6,213 contracts, an increase of 349 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 33,155 contracts. This represents a decrease of 1,233 contracts in the net long position held by these traders. There might not be much in the way of solid support in October platinum until the $1,860.50 level.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

OUTSIDE MARKET DEVELOPMENTS: While equity markets in Asia and Europe are generally weaker during the overnight session, early indications are that US equity markets would open with moderate losses later on this morning. The US Dollar is higher against most of the major currencies this morning, although posting a loss versus the Yen. The Prime Minister of Greece will reshuffle his cabinet and pursue a vote of confidence in order to pass new austerity measures as part of a potential new aid package for his nation. The ruling party in Japan may raise corporate and income taxes to repay government bonds used for funding post-earthquake reconstruction. Euro zone CPI during May was up 2.7%, in line with market forecasts. UK Retail Sales during May were down 1.4%, weaker than expectations. Major US economic numbers to be released this morning include Weekly Jobless Claims and May Housing Starts at 7:30 AM, and the Philadelphia Fed’s survey of US Business Conditions during June at 9:00 AM. In addition, Fed Regional President Fisher will give a speech during the session.

GOLD MARKET FUNDAMENTALS: While gold prices seemed to forge some upside action yesterday off the uncertainty in the US economy yesterday, others were simply impressed with gold’s ability to hold together in the face of weakness in a broad cross section of physical commodity markets. Perhaps the gold market was partially undermined by news of rising Chinese gold production from the first four months of 2011, but that negative impact could be partially countervailed by news overnight that Russian gold and currency reserves reached up to the highest level in almost 3 years. News that the Russian central bank has generally been building its gold and currency reserve base in each of the prior two years might also cushion the gold market against what appears to be a pattern of weakness in a host of physical commodity markets. At least at times yesterday, the gold market seemed to benefit from evidence of slowing in the US economy, but initial expectations for the scheduled data today wouldn’t seem to give a definitive signal on the direction of the US economy. More than likely, gold remains in a position to garner some lingering support from the Greek debt crisis, especially since the Euro has started the Thursday US trade off on a slightly weaker footing. However, a stronger Dollar probably countervails some of the flight to quality lift for gold off the ongoing Euro zone debt saga. Comex Gold Stocks were 11.267 million ounces down 26,783 ounces.

SILVER MARKET FUNDAMENTALS: The silver market seems to be somewhat off balance as a result of broad based slowing fears and perhaps because of weakness in a host of physical commodity markets. While Comex silver stocks remained below the potentially psychological level of 100 million ounces overnight, the stocks yesterday saw a daily increase of 600,511 ounces to stand at 99.4 million ounces. Comex Silver Stocks have declined in 12 of the last 20 days. Talk of strong Asian demand for silver might also be providing the market with some support against what at times seems to be a broad based physical commodity market liquidation bias. Silver continues to see generally up beat analysts forward price projections, although some forecasts have recently been pulled down from levels forecasted earlier this year. In the mean time, silver might have to rely on flight to quality or safe haven support, as classic physical commodity market fundamentals could be undermining in the short term. So far, the silver market hasn’t taken much in the way of direction from earnings and production news from a series of silver miner results this week.

PLATINUM: The platinum market saw noted downside action on the charts overnight and given the apparent softening of the US economic outlook, the initial weakness today isn’t that surprising. With the market also seeing evidence of Indian tightening overnight and renewed Greek problems in the headlines it would seem like the platinum market almost totally discounting evidence of strong Chinese platinum import data. Typically seeing a physical commodity market discount favorable Chinese import/demand news story is usually a sign of broad based macro economic negativity in the marketplace. With the expectation of lower equities and some strength in the Dollar, the platinum market also looks to face a wave of negative outside market factors. Near term downside targeting is seen at $1,750 basis the July platinum contract.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

OUTSIDE MARKET DEVELOPMENTS: While equity markets in Asia and Europe were generally weaker during the overnight session, early indications are that US equity markets would open with moderate gains this morning. The US Dollar is weaker against most of the major currencies this morning, although posting gains versus the Yen and Swiss. News reports indicate that a potential Greece aid package may ask private creditors to swap their current holdings for longer maturities. The IMF has urged China to let the value of the Yuan rise further in order to help rebalance the Chinese economy. Japanese GDP during the first quarter was down 3.5% year-on-year, weaker than market expectations. The UK Trade deficit during April was 7.39 billion Pounds, a smaller deficit than projected. The Bank of England will announce their monetary policy decision at 6:00 AM, while the European Central Bank will announce their monetary policy decision at 6:45 AM. Major US economic numbers to be released this morning include Weekly Jobless Claims and the April International Trade Balance at 7:30 AM, and April Wholesale Trade at 9:00 AM. In addition, Fed Vice Chairman Yellen and Fed Regional Presidents Plosser and Pianalto will give speeches during the session. The final leg of the Treasury’s monthly refunding, the 30-year note auction, will have results announced at 12:00 PM.

GOLD MARKET FUNDAMENTALS: The gold market starts the Thursday US trading session off on a slightly weaker footing despite somewhat supportive currency market action. Apparently residual concern of slowing in the US economy has lost its capacity to foster safe haven buying of gold, or perhaps the magnitude of the slowing fears in the US aren’t higher enough to prompt fresh buying action. Some players think the impending ECB rate decision has spooked some longs to the sidelines, while others think that the ECB won’t be able to justify a hike in this meeting, especially given the damage to sentiment caused by the most recent round of Greek debt troubles. Some traders think that gold is deriving some support from the tensions in the most recent OPEC meeting, where the cartel was clearly divided between raising production and holding production steady. Those OPEC members against raising production levels suggested that they were concerned about overheating in the Chinese economy, especially if energy prices were reduced in the wake of a higher output move. In fact, the main dispute inside OPEC was on the outlook for the global economy and that could indirectly provide some support to gold prices ahead. In looking ahead, the gold market will see a couple US Fed speeches today, with the Fed’s Plosser already weighing in with a partially dovish statement overnight. With the Fed Beige book, US data and recent Fed statements mostly leaning toward more slowing in the US, it is possible that some gold bulls are becoming hopeful of a delay in the end of QE2 or some other gold supportive stance from the US Fed. Comex Gold Stocks were unchanged at 11.214 million ounces.

SILVER MARKET FUNDAMENTALS: Somewhat surprisingly the silver market is showing some minor early gains today and that could be a sign that silver is starting to sense a softening of the US Fed tone. Clearly silver would be undermined in the event the ECB raises interest rates this morning but that isn’t a widely anticipated development. Seeing silver rally and gold decline today could also suggest that macro economic uncertainty isn’t high enough to support gold and that type of action could also suggest that silver is indeed hopeful of a delay in the end of US QE2. Some traders are suggesting that silver is coiling for some type of key decision ahead and therefore the last month’s high and low prices could be seen as critical technical points directly ahead. Comex Silver Stocks were 101.015 million ounces down 7,683 ounces. Silver stocks have declined 12 of the last 20 days.

PLATINUM: The platinum market was showing some minor weakness in the early Thursday US trade, despite an initial attempt to rally in the silver market. However, weakness in copper and energy prices and a lack of direction in world equity markets seems to have left the bear camp with a slight edge. Platinum and other physical commodity markets are probably fretting the ECB rate decision this morning, even though US central bank comments recently have leaned more toward an extension of easing. While platinum recently saw favorable comments toward Ford motor company shares, the tone of the Fed Beige book yesterday would seem to be somewhat restraining of platinum and other physical commodity prices. Platinum has also shown some coiling action for the month of June and that could mean that the trade is waiting for a clearer track on the US economy before committing to a fresh trend. Up trend channel support in the July platinum market is seen at $1,818.80 today and that level rises to $1,825.20 on Friday.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

Global equity markets were generally higher during the overnight and early morning hours, with indications that US equity markets would open with sizable gains this morning. The US Dollar is generally weaker against most of the major currencies, although posting a strong gain versus the Yen. News reports indicate that Germany may drop their attempts to have Greece have an early rescheduling of their debt as a condition for any new aid package. A major credit rating agency put Japan on a sovereign debt watch for a possible ratings downgrade. Japanese Industrial Production during April was up 1.0%, lower than market forecasts. German Unemployment during May was 7.0%, in-line with expectations. Euro zone Inflation during May was up 2.7% year-on-year, lower than projections. Major US economic numbers this morning will include a private survey of US Home Prices at 8:00 AM, a private survey of Chicago area Purchasing Managers at 8:45 AM, and a private survey of US Consumer Confidence at 9:00 AM.

GOLD MARKET FUNDAMENTALS: The gold market managed another new high for the move overnight, with the June gold contract reaching the highest level since May 4th in the early Tuesday US trade. Apparently a slightly improved outlook for Japanese manufacturing and decent Euro zone economic readings have provided a somewhat positive macro economic backdrop this morning, which might be accentuated by renewed strength in energy prices. With the Dollar also falling to the lowest level since May 6th, the gold market is probably benefiting from the overnight currency market action. Unfortunately, for the bull camp in gold, US gold prices this morning might be somewhat restrained by weakness in Indian gold prices overnight. Some traders are suggesting that the prospect of weak US scheduled numbers later this morning could kick up the currency related support for gold, but that line of reasoning would seem to conflict with the positive initial reaction in gold prices last night to the hope that some idled Japanese manufacturing was poised to get back on its feet. Comex Gold Stocks were 10.875 million ounces down 271,824. Comex Gold Stocks are at the lowest levels since 09/27/2010. Comex Gold stocks are at the lowest in the past 10 readings. The Commitments of Traders Futures and Options report as of May 24th for Gold showed Non-Commercial traders were net long 213,515 contracts, an increase of 18,535 contracts. The Commercial traders were net short 259,797 contracts, an increase of 20,177 contracts. The Non-reportable traders were net long 46,282 contracts, an increase of 1,641 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 259,797 contracts in gold. This represents an increase of 20,176 contracts in the net long position held by these traders.

SILVER MARKET FUNDAMENTALS: The silver market appears to be caught up in a positive early wave that has also served to lift gold, equities and energy prices. A weaker Dollar is also serving to lift silver prices, which are probably garnering some positive vibes from hopes of improved physical demand for some commodities in the face of more positive Japanese manufacturing talk overnight. Some players even think that gold and silver are deriving some lift from talk of a possible deal that would allow Greece to cut its value added tax, which in turn is thought to be a stimulus to that troubled economy. Comex Silver Stocks were 101.428 million ounces down 383,025. Stocks have declined 12 of the last 20 days. The Commitments of Traders Futures and Options report as of May 24th for Silver showed Non-Commercial traders were net long 24,246 contracts, an increase of 180 contracts. The Commercial traders were net short 43,120 contracts, an increase of 883 contracts. The Non-reportable traders were net long 18,875 contracts, an increase of 705 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 43,121 contracts. This represents an increase of 885 contracts in the net long position held by these traders.

PLATINUM: The platinum market managed a distinct range up extension this morning and in the process the July contract reached the highest level since May 5th. Apparently the market is benefiting from hope that some Japanese manufacturing might be set to restart and that in turn is seen as a direct benefit to platinum demand expectations. Keep in mind, the platinum market has tracked tightly with global auto sector developments and therefore it is possible that some fresh buyers are stepping into platinum off hopes of increased physical demand ahead. There was a minor supply side setback overnight in platinum, but this morning’s attention seems to be fixated on the demand side of the equation. The Commitments of Traders Futures and Options report as of May 24th for Platinum showed Non-Commercial traders were net long 21,961 contracts, a decrease of 1,159 contracts. The Commercial traders were net short 25,095 contracts, a decrease of 1,264 contracts. The Non-reportable traders were net long 3,134 contracts, a decrease of 104 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 25,095 contracts. This represents a decrease of 1,263 contracts in the net long position held by these traders.