Market Malaise Over Upcoming Fed Interest Rate Meeting

The metals closed the trading day on a lower note led by a weaker Euro and general market malaise. Stocks have been under water all day reflecting a renewed worry about banking giant State Street. The company reported that it’s $625 million sub-prime loss reserve may not be enough cover it’s needs. Remember; it doesn’t take much bad news for traders to forget the recent good news and to head for the sidelines again – and vice versa. Last on the Dow 913 down 50 points.

In the currency markets the Euro is presently down 76/100ths of cent versus our Greenback with traders beginning to express concern over this week’s Fed interest rate meeting scheduled for Wednesday.

Crude is taking it’s cue from stocks with Oil currently down 36 cents at $70.57. As for the metals; Silver finished the New York session down 30 cents at $14.38. Gold shed $13.00 to $944.00. Palladium eased $3.00 closing at $275.00. Platinum fell $25.00 to end at $1243.00. Volume was moderate.

Traders report the sudden “kiss and make up” attitude from North Korea may have bled a bit of the geo-political anxiety premium from prices today. Tomorrow the calendar resumes with a fresh look at U.S Productivity and the latest Wholesale Inventories.

Tuesday’s Economic Calendar:

U.S. Wholesale Trade
U.S. FOMC Meeting
and Rate Decision – Volatile Event
German Consumer Prices

Traders Selling Dollars in a Big Way

As the final trading week of July comes to a close the metals finished on a higher note. Silver went up 38 cents to $13.92. Gold tacked on $19.00 closing at $954.00. Palladium edged up $2.00 finishing the day at $262.00. Platinum gained $20.00 to $1201.00 per ounce. Trading volume was moderately heavy.

Once again our regular day to day barometers of Oil and Euro led the way. Today’s key event was a 1.76 cent surge in the Euro against our Dollar. While the Euro got some support from an additional $1.31 rise in the price of Oil, it was not the primary driving catalyst. According to sources in London, a powerful rumor started circulating throughout Europe regarding General Electric. The rumor indicated that GE’s financial arm GE Capital will announce the need for an additional $12-14 billion in bail out capital. (THIS IS A RUMOR ONLY) Even so, traders started to sell Dollars in a big way. Last on the Euro $1.4256.

Meanwhile Crude is trading at $68.25. Today’s economic data came in mixed with only the GDP worth mentioning. It clocked in with a smaller than expected decline of 1%. However;the prior quarter’s decline of 5.5% was revised lower to a 6.4% decline. Over in the stock market the Dow remained calm in the wake of the data and is apparently ignoring the GE rumor; at least so far. Last on the Dow 9180 up 26 points. When things get going next week traders will be focusing in the next Non Farm Payroll Report due out next Friday. On Monday the calendar contains a fresh look at Construction Spending, the ISM Manufacturing Index, and Auto Sales.  Have a great weekend.

Tuesday Market Wrapup

Metals ended the trading day on a subdued note after Fed Chairman Bernanke’s Capitol Hill testimony suggested the Fed was keeping vigilance over inflation. The Dollar recovered early session losses on the news with the Euro now trading at $1.4179 off 31/100ths of U.S cent.

Metals lost further support as the price of Oil slipped into neutral territory with the August futures contract set to expire today. Last on crude $64.02 up 4 cents. As a result Silver finished the New York session at $13.53 off 12 cents. Gold fell $4.00 ending at $948.00 per ounce. Palladium was our lone exception closing at $256.00 up $1.00. Platinum closed near the lows at $1175.00 off $14.00.

Stocks turned lower during the past hour as recent leaders such as financial and technologies came under profit taking. Traders figure that after 6 straight days of advance and with the pending release of Apple and Yahoo earnings due after the close; this might be a good time to step to the sidelines. As for tomorrow the calendar remains idle with the exception of the Weekly Oil Inventories.

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