Prices for precious metals prices mixed amid opened this morning, reflecting on-going uncertainty and unease in all markets in the wake of Japan’s emerging nuclear crisis. Gold operations had a difficult start, despite a substantial slide in the U.S. dollar trade-weighted index overnight.
The fact that gold was worth just $ 1,400 to level at a given moment that this epic crisis events, it would be expected to challenging targets to maintain full price $ 100 higher, not too much good for the bulls. At present it seems that the ebb and flow of the equity markets is the dominant price-fixing agent for precious metals and other commodities. The U.S. dollar movements seem to have taken a backseat in this respect.
The difference between gold (sold together with the dollar) and its metal was visible in the small profits that silver, platinum and palladium all recorded at the beginning of the New York session this morning. Silver rose 13 cents to $ 34.40 an ounce on the bid-side at the start of the day. While some market technicians see a potential “Bear Flag” in gold right now, and watch the price uptrend lasting six weeks have been canceled, short-term Elliott Wave Update Wednesday identified the key level for the cases falling in the yellow metal if the $ 1433.39 mark reached at what he calls a “counter-trend rally” on the 14th of the month.
A similar situation exists in silver, where the key, “not-to-be overcome” level that would keep the bears fed is now seen as the $ 36.56 price. Meanwhile, platinum advanced with the $ 6 to $ 1,695.00 an ounce, while palladium moved above $ 15 opening at $ 711.00 per troy ounce. In the background, crude oil also staged a “typical” dollar-inverse to be higher, gaining $ 1.90 to $ 99.88 per barrel mark to reach. Black gold was lifted higher by escalating violence in Libya as well. Col Gaddafi’s descendants gave the rebels, but 48 hours. which he labels them as to neutralize the insurgency and are choked.
Analysts at Standard Bank (SA) View the platinum and palladium markets as largely determined by their marginal cash cost producer at the moment. The research team at the bank opines that if a market kantelt a surplus in 2011, the underlying cash production costs of the marginal PGM producers could not raise the price of this metal support on a fundamental basis of comparison.
At this time, and factoring in the Japanese natural disaster, the supply and demand picture in the two precious metals turning towards A. .. delicate condition. Before the earthquake, the SB team from a deficit of approximately 110,000 ounces of platinum for the current year, and a 358,000 ounce deficit in palladium. If sales of vehicles in Japan were, say, an extremely unlikely and perhaps 25% this year, a fall due to the terrible events we are seeing, then the platinum deficit would fall to 48,000, but g and one in palladium could shrink to only 38,000 ounces, almost a balanced paradigm for both.
At night, more and more countries urged their nationals to leave Japan as soon as possible and a break was seen as growing between the U.S. and Japan in the communication and handling of emergency on the Fukushima nuclear reactor complex. Hardly any official body in or outside Japan seems to be a consultation on whether or not his Fukushima reactors or as to whether the efforts to address problems have met with success or failure melt.
The UN has scheduled an emergency meeting to resolve the crisis in Japan to keep, but the U.S. authorities with the safe (along with a growing list of countries), and now have the evacuation of 600 + Americans working in Japan, while the allowed issuing travel advice to anyone traveling to or within the affected country.
Even at night, the Japanese yen has witnessed a massive inflow of speculative funds, behind the players who hope to benefit from the potential repatriation of the currency in the aftermath of reconstruction. Although concrete evidence of such a home in the yen are not yet clear, although most analysts see the currency gains as temporary at best, currency speculators aggressively sold the U.S. dollar and bought the yen was leaving, pushing the last to record high near 76.25 against the dollar early this morning.
The U.S. dollar buys almost seven yen less today than it did one week ago, before the huge earthquake that hourly sequence of apocalyptic events that make headlines at this particular time. Some economists have offered the projection that the Japanese economy is now in a short recession, for a few quarters and result in a decline in GDP may be 1.2 percent in the coming quarter. The result of the tragedy could eventually total about 3% of Japanese GDP and while the nation is absolutely able to incur such costs, damage to tangible assets, human capital and general welfare will not be insignificant. The timing of the disaster could not be worse with respect to the country economic conditions.
It is a fact that the Japanese economy was on the mend prior to the devastating tectonic even that happened last Friday. Media Matters noted that reactionary and conservative media figures in the U.S. have cited the Japanese fiscal policy during the “lost decade” of the 1990s in their own incentive programs Criticize Barack Obama. “These figures ignore evidence that media according to leading economists, economic conditions were improving in Japan for the Japanese government stimulus spending temporarily abandoned in an effort to reduce the deficit,” the organization. Furthermore, it cites Nobel Prize winner and New York Times columnist Paul Krugman, that fiscal stimulus packages in Japan rated as “probably [had] prevented a weak economy from plunging into a depression.”
Similarly, Fed Chairman Bernanke to show his most vocal critics such as Sarah Palin and Ron Paul that his Qe1 and QE2 program did yield the intended results, despite the abundance of overly eager naysayers who see nothing but the Treasury printing presses would run on 100% on a 24 / 7 basis, and continue the public about the U.S. into a Zimbabwe-like inflation mess soon warn. Bloomberg News relays, according to Peter Hooper, chief economist at Deutsche Bank Securities Inc. in New York, “quantitative easing was a major factor in taking risks deflating the table. It certainly helped strengthen long-term inflation expectations, and it was a factor that contributed to the rally in the stock market. ”
Avoiding adverse outcomes, whether deflation (Japan) or inflation (China), depression (Japan) and sprawl making (China) also seems to be on the minds of central bankers in India overnight. The RBI’s policy interest rate hike before the eighth (!) Time in one years time this morning after they raised their inflation forecasts for the second time in a quarter. Inflation is under control now Job # 1 for India. Last week, Chinese Premier Wen stated that Public Enemy No.1 in China’s inflation spiral.
While the U.S. Fed has not yet signed the specific methods they can use to exit from its accommodative policy is already (albeit slowly) leaks some important aspects about the ability of the previously extended drain reserves. Such implements include the increase in the number of counterparties are used for drainage. Fed Chairman Dudley strengthens allegations that the U.S. central bank the necessary “tools” (ie hiking interest rates, tightening credit conditions, etc.) when needed, and he underlined the fact that QE2 has helped the U.S. economy.
Finally this morning, a quick roundup of pertinent U.S. economic statistics (and there were plenty on offer): U.S. jobless claims fell to 385,000 last week to submit (the four-week average is still at its lowest level since 2008). U.S. consumer prices rose 0.5% in February (petrol prices were blamed, mainly), while core inflation was moderate, with a 0.2% gain on the Mon Both of these figures were largely in line with economists’ expectations. U.S. industrial production unexpectedly fell by 0.1% last month, even if the index of leading economic indicators (LEI) recorded its eighth consecutive gain, from 0.8% in February (slightly less consensus forecasts, but still indicating a stronger restoration in progress). In fact, the Philly area manufacturing activity rose the most since 1984 according to this morning hit of the data. The Dow Jones average picked up 152 points’ worth of steam and appeared to have a better day on tap, for a change.
source:ibtimes
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