Consumer Confidence in Third Month of Decline

Metals closed the final New York trading day of the week higher. The metals continued to react positively to a lower Dollar sending Silver up 54 cents to $14.75. Gold surged $11.00 to a closing price of $957.00. Palladium ended the day and week at $286.00 up$4.00. Platinum gained $1.00 closing at $1238.00. Trading volume was light to moderate.

The Euro maintained most of it’s early session gains after the Michigan Sentiment Index of Consumer Confidence clocked in at 65. While the number was 1 point higher than the estimate; traders took a broader view pointing to the fact that index has declined for three straight months running. The Euro is 83/100ths of cent higher versus our Dollar at $1.4350. This change represents the price difference from yesterday’s wrap up level through today’s wrap up.

Stocks also turned lower in face of the Sentiment numbers supporting our theory of positive economic data addiction. The Dow is currently down about 47 points having been down almost 80 at the session lows.

Meanwhile the price of Crude was like a roller coaster throughout the day but is presently up 44 cents at $72.93. When we return on Monday traders will get a fresh look at manufacturing when the Chicago Purchasing Managers Index of Manufacturing (PMI) hits the tape.

Monday’s economic calendar:

U.S. Chicago PMI
U.K. Markets Closed

Oil Hangs On to Last Week’s Gains

Both of our day to day barometers are a shade higher with Oil hanging on to last week’s gain of $4.29 per barrel. Crude is presently up 18 cents at $74.07.  In the currencies the Euro is 11/00ths of U.S cent higher in a vacuum of fresh economic data. Last on the Euro $1.4328.

Metals are beginning the new trading week with Silver leading the way. Silver is 15 cents higher as traders lean towards an implied rise in industrial demand given last Friday’s optimistic outlook by Ben Bernanke. Last trade $14.35. Gold is down $1.00 at $953.00. Palladium is $286.00 up $4.00. Platinum slipped $22.00 to $1236.00.

In the stock markets; Both Asian and European markets closed or are trading solidly higher. On the domestic side the Dow ended the whole of last week with a gain of 184 points, and appears to be headed for a 36 points rise this morning.

On the geo-political front President Ahmadinejad is facing sharp criticism of his new cabinet nominees both at home and abroad as Iran’s internal turmoil deepens. On the other hand North Korea continues to show warming gestures to the west with the current meeting between the Koreas being extending from it’s scheduled length.

In a final note; Scotland is attempting to control the political damage from its decision to release the Libyan agent convicted of the Pan Am Lockerbie bombing. And Cash for Clunkers ends today.

Today’s economic calendar:

Canadian Retail Sales

Tomorrow’s economic calendar:

U.S. S&P/Case-Shiller House Price Index
U.S. Consumer Confidence

Traders Nervous in Advance of Bernanke’s Speech at 10AM

Metals are changing hands in a mixed and quiet fashion. Silver is 7 cents higher at $13.99. Gold is $943.005 up $1.25 per ounce. Palladium is $1.00 lower at $275.00. Platinum is down $3.00 and trading at $1239.00.

The lack of activity is being ascribed to nervousness in advance of today’s scheduled speech by Fed Chairman Bernanke at 10 am eastern. Expect Dollar volatility. The head of the Fed is expected to make remarks about the economy at the Annual Fed Symposium in Wyoming. Of greater concern should be whether Mr. Bernanke gets a second term, with President Obama to make that decision shortly. Early indications warn that a change at the helm of the Fed would cause a major stock market shake out.

Speaking of the stock market; the Dow ended Thursday with a 70 point gain and appears to be headed for another 40 point gain this morning with traders expecting to see a slight improvement in this morning’s release of Existing Home Sales. The latest estimate calls for a reading of 5 million units compared to June’s 4.89 million. Just another example of bad but better.

Meanwhile over in the energy markets the price of Oil continues to rise with electronic trading showing a gain of 76 cents to $73.74. Keep in mind the recent rise in the price of Oil is a two edged sword. Rising prices implies higher demand and greater economic activity, but rising prices also tend to divert consumer spending dollars which will ultimately hurt economic expansion.

In currency trading we find the Euro up 76/100ths of U.S cent in advance of the Bernanke speech; and in line with the weaker Dollar and higher oil. Last trade $1.4320.

In global matters; Iran has suddenly agreed to allow greater monitoring by U.N. inspectors of a uranium-enrichment facility, ending a long standing diplomatic impasse. You get the sense that Iran is trying to divert world attention from it’s current social unrest. In a final note; Cash for Clunkers will officially end next Monday.

Late Afternoon Pre-Fed bounce in the Euro

With about a half hour to go before the Fed releases it’s data; the metals ended the New York session on a firm note.

The Euro gained 62/100ths of cent versus our Greenback with currency traders front running their expectations of what the Fed will say. The Euro got a little extra support when the U.S.Trade Deficit expanded by $1 billion from the prior month.

Traders took their cue from a surge in Oil and a late afternoon pre-Fed bounce in the Euro. Silver ended the session at $14.56 up 22 cents. Gold gained $4.00 to $950.00. Palladium and Platinum remained slightly down,losing $7.00 per ounce for a close of $1235.00 and $2.00 for Palladium and a close of $273.00. Volume was moderate.

Crude Oil jumped by $1.24 per barrel on the Dollar’s weakness along with a powerful surge in the Dow. The rise in Oil comes despite today’s higher than expected inventories. Last on Crude $70.69.

In the stock market the Dow is presently up 134 points with traders pointing to the warm reception on today’s treasury debt auctions. Other traders are buying in advance of expected optimism on the part of the Fed. More in the AM

Fed Statement Later Today has Traders in Waiting…Again

The metals continued trading in a tight range during the overnight Asian and European sessions. Again today traders are virtually immobilized as they wait for today’s Fed interest rate announcement along with the accompanying statement before committing. What will the Fed say regarding their perception of the economy? This is what has traders in most markets anxious. We will know at 2:15 pm eastern today.

Currently we find Silver changing hands at $14.20 off 11 cents. Gold is $3.00 lower at $943.00. Palladium remains unchanged at $275.00. Platinum is $1235.00 off $9.00.

Forex

In the currency markets it’s the same thing with the Euro treading water at $1.4163 up 3/100ths of cent versus our Dollar. Crude Oil is also flat with traders waiting for today’s Weekly Oil Inventories along with the Fed announcement. The latest estimate calls for Oil supplies to show rise of 1.2 million barrels.

In stock trading the Dow ended Tuesday with a decline of 96 Dow points as traders made a final hour scamper to the sidelines in advance of today’s pearls of wisdom from the Fed.

Today’s calendar also contains the latest look at our Balance of Trade. The weakening Dollar continues to cut the disparity between our exports and imports. The weaker Dollar makes our products for export cheaper to buy. Look for imports to still exceed exports by $28.6 billion. The expected deficit is a shade higher than last month’s $26 billion.

In domestic matters; President Obama continues to push for his health care reform bill. On the geo-political front U.S missiles struck a suspected Taliban camp in Pakistan killing 14 militants. In Kuwait an al Qaeda linked group was arrested for planning an attack on a U.S military base there.

Today’s economic calendar:

U.S. Trade Balance
U.K. Employment

Tomorrow’s:

U.S. Initial Claims
U.S. Retail Sales
U.S. Import Prices
U.S. Business Inventories

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