Morning Market Update July 15

July 15th, 2013 by

Gold and silver opened up sharply to begin trading this week, after posting the largest weekly gain since 2011 on Friday. However, a rebounding dollar dampened the rally in European trading, with a sharp mini-selloff just before the New York open.

Both silver and gold saw an immediate recovery, and as of 10am are trading near unchanged. Hedge funds are reported to have increased long options last week, betting on a near-term gold rally. Oil futures are slightly lower, but still within easy striking distance of the recent 14-month high.

In Asia, the Shanghai Gold Exchange reported deliveries for the first six months of this year almost equaled the total amount of deliveries for 2012. January to June deliveries totaled 1098 tonnes, compared to 1139 tonnes for all of 2012.

China reported second quarter GDP rose at 7.5%, down from 7.7% in the first quarter. This was in line with analysts expectations. Honk Kong, Chinese and Japanese markets all closed up slightly in the green. This was enough for the Nikkei to hit a seven-week high, however.

In Europe, there was little fallout in the market over Fitch downgrading France’s sovereign debt from AAA, the last of the major ratings agencies to do so. Gold is at a three-week high in Euros, as the common currency barely hangs on at the 1.30 mark. Some analysts believe that with all the debt troubles in southern Europe, it will take little to spark a safe haven rally in gold on the Continent.

In the U.S. stocks oscillated on the open, but are trading near flat. Retail sales for June were disappointing, coming in at half what was expected. The Commerce Department said retail sales increased only 0.4%. The big market mover this week, at least in the U.S., should be the testimony of Fed Chairman Ben Bernanke before the House regarding the economy and monetary policy.

by David Peterson