Friday February 6, 2015 12:21 PM

The gold market appears to be in a tug of war with uncertainty: in Europe, with Greece boosting safe-haven demand on one side, and a strong U.S. dollar on the other side, says Jonathan Butler, precious metals strategist at Mitsubishi Corporation. Although brinkmanship between the European Central Bank and Greece could help support gold until the end of February when the bailout agreement expires, he says that a strong U.S. dollar will ultimately win. “Waves of selling were unleashed this afternoon following the U.S. non-farm payroll data which focused attention once again on interest rate rises in H2 2015, perhaps as early as June,” he says.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

Better Nonfarm Data May Bring Rate Hikes Sooner – TD Securities

Friday February 6, 2015 11:20 AM

The better-than-expected jobs data on Friday has changed the market’s view on when the U.S. Federal Reserve will announce a rate hike, and has hurt the metals complex, says TD Securities. “The odds of a July hike have rocketed to 47% (from just 32%) as September hike odds surged to 62% from a much more uncertain 48% prior to the payroll data,” says Steven Scacalossi, director head of sales global metals for the bank. “Gold has convincingly broken its 200-day moving average and now targets scale down support from $1225-1230.  Silver has broken its 50-day moving average at $16.75 and could target $16.25,” he adds.

By Sarah Benali of Kitco News; sbenali@kitco.com

 

BBH: Market Shifting To Mid-Year Rate Hike In U.S.

Friday February 6, 2015 9:35 AM

Currency analysts at Brown Brothers Harriman describe January’s employment report as “nothing shy of spectacular” and add the pendulum is swinging back to a mid-year rate hike from the Federal Reserve. “On balance, those who doubted a mid-year Fed hike have to reconsider,” they say. “We would subjectively attribute about an 80% chance, with the remaining 20% in September. The Fed delayed tapering by a couple of months from when it had appeared to signal it. We could expect the forward guidance at the March FOMC meeting to shift, and the "patience" diluted to something more data-centric,” BBH adds.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

RBC's Gero: Gold Losing Ground As Employment Data Supports Rate Hike

Friday February 6, 2015 9:27 AM

Gold’s break below $1,250 an ounce created some selling momentum in gold following a larger-than-expected increase in January’s nonfarm payrolls report, says George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures. “Traders fear that the Fed’s resolve to raise rates may be stronger…” he says. “Lower open interest, plus lower prices are not helpful to the bulls.” Comex April gold is just off its session lows of $1,237.30 an ounce, trading at $1,240.40, down $22.30 on the day.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

CME Group Reports 2014 Financial Results, Metals Daily Volume Up 14%

Friday February 6, 2015 7:49 AM

On Thursday, CME Group reported its latest financial results, which showed a 22% increase in fourth quarter revenues, and annual overall daily volumes reaching record highs. “We saw significant growth in every product area during the fourth quarter, ranging from 14 percent in metals to 41 percent in interest rates," said Phupinder Gill, CME Group chief executive officer, in a press release. “Average daily volume reached nearly 15 million contracts, up more than 30 percent and representing the second highest quarterly volume in our history,” added Terry Duffy, CME’s executive chairman and president. CME said total revenues for the last quarter of 2014 reached $841 million, while operating income came in at $472 million.

By Sarah Benali of Kitco News; sbenali@kitco.com