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OUTSIDE MARKET DEVELOPMENTS: Equity markets in Asia and Europe are generally weaker this morning, and U.S. stock indices have posted moderate losses during the early Tuesday trade. The Dollar is generally weaker against the major currencies during overnight trading, although posting a moderate gain against the Pound. The Japanese Prime Minister will face a leadership challenge in an upcoming political party election. France has sent a proposal for stronger EU regulation of commodity markets to the European Commission. Japanese Industrial Production during July was up 0.3%, higher than forecasts. Japanese Retail Sales were up 3.9% year-on-year, higher than expectations. Euro zone Unemployment during July was 10.0%, unchanged from last month and in-line with forecasts. German Unemployment during August was 7.6%, unchanged from last month. UK individual borrowings during July were 300 million Pounds, much weaker than expectations. A private survey of UK Consumer Confidence during August rose to -18, slightly higher than forecasts. US economic numbers released this morning include a private survey index of Home Prices at 8:00, a private survey of Purchasing Managers in the Chicago area at 8:45, and a private survey of Consumer Confidence at 9:00 AM.
GOLD MARKET FUNDAMENTALS: The gold trade continues to waffle between support off the uncertainty in the global economy, and concerns of spiraling deflation. Some gold traders think that gold is set to be undermined in the face of weak economic data points ahead, but the real test will be the post-report trade action in gold. European gold traders seemed to be partially undermined by the initial weakness in equity prices today, and that would seem to suggest that deflation concerns are present again in the marketplace. A recent decline in volume is thought by some traders to be a sign that the month and a half rally in gold prices is starting to discourage some buyers, but the bulls could spin that argument around and suggest that volume seems to be declining on down days in prices. At least in the early action today, the trade seems to be poised to take a large amount of direction from the FOMC meeting minutes to be released later in the trading session. Comex Gold Stocks were 10.817 million ounces, down 63,029 ounces. Gold stocks have declined 15 of the last 20 days. Comex Gold stocks are at the lowest in the past 10 readings.
SILVER MARKET FUNDAMENTALS: The bear camp is probably a little emboldened by the weak action on the charts in the early Tuesday US silver trade, as silver prices reached the lowest level since August 25th. News of a fresh silver find from a Canadian silver miner is probably not a major impact on silver prices today, as silver recently hasn’t paid that much attention to physical supply side stories. After showing some leadership within the precious metals complex last week, some traders suggest that silver prices might have become short term technically overbought off last week’s action, and therefore the bull camp in silver would seem to need help from the scheduled data flows today. Like gold, silver seems to be getting less lift from economic uncertainty, and that suggests physical commodity market fundamentals might be regaining importance in the marketplace. Comex Silver Stocks were 110.758 million ounces, down 386,235 ounces. Stocks have declined 11 of the last 20 days.
PLATINUM: The platinum market appears to be tracking physical commodity market fundamentals during a period of slowing growth expectations. With the October platinum market reaching a partially overbought level yesterday and temporarily forging the highest price level since August 19th, it isn’t surprising to see prices this morning in the midst of a noted range down extension. Weaker equities and a negative tone toward the economy would seem to give the platinum bears the edge, but the bull camp might suggest that any favorable surprise from the data front this morning could catch the platinum market in an overly bearish fundamental posture.

