|Bid||111.490 x 3000|
|Ask||111.500 x 4000|
|Day's Range||111.230 - 112.180|
|52 Week Range||111.230 - 129.510|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.40%|
US retail sales rose 0.5% sequentially in July against expectations of just a 0.1% increase. On an annual basis, the retail sales in July grew by 6.4%. The core retail sales (XRT), which exclude automobiles, gasoline, building materials, and food services, grew by 0.5% in July.
Mr. Market keeps working on moving on from Turkey worries, and earnings today from the likes of Macy’s and Cisco ought to help. Geopolitical angst hasn’t been doing that much for gold, and today’s call suggests the metal’s future isn’t so bright.
Usually, equity and commodity prices share a positive correlation. However, gold (GLD) is an obvious exception. The correlation between equities and commodities isn’t hard to explain. Commodities, like equities, tend to do well when demand is strong during periods of high economic growth. Commodities are weak in risk-off environments. Equity markets also fall during such periods.
As it is global stocks are feeling the pinch of escalating trade tensions between the United States and China, and now the collapse in Turkish lira has amplified the concerns. This is especially true as Turkish lira is in a free-fall territory, nosediving as much as 11% against the dollar in early trading today after plummeting more than 20% on Friday.Source: Shutterstock
Gold has been "out of style" in recent months. Sentiment readings and positioning in the futures markets appear to be at an extreme. The Dollar Index has made a new high for its recent move up. Is it all all over for gold or are we looking at an oversold extreme that could produce a trade-able rally? Let's see if we can separate some usable information from the dross.
As we’ve discussed previously in this series, the SPDR Gold Trust ETF (GLD) has fallen ~8.0% year-to-date and ~11.0% from its April peak. Historically, gold prices have declined in the summer months, only to climb in August onward due to the seasonal pattern of demand for gold. Physical gold demand from Asian countries such as India supports its price after that.
Usually, gold (GLD) is considered to be a “safe-haven asset” and gains due to economic or political turmoil. The latest evidence is Turkey’s economic and currency crisis. On August 13, gold prices (IAU) fell to 17-month lows despite the raging crisis in Turkey, which also seems to be spreading to other regions.
Goldcorp (GG) reported its Q2 2018 earnings on July 25, 2018, after the market closed and held its earnings conference call on July 26. It reported adjusted EPS of $0.02, which missed the consensus estimate by $0.05. Its revenues of $793 million missed the analyst estimate by ~9%. Lower production and foreign exchange currency costs were mainly responsible for the miss. The company reported that it lost $0.20 per share due to deferred tax balances. Goldcorp also missed analysts’ expectations for its Q1 2018 earnings.
The budget balance is the difference between what a country’s government garners from taxes and other sources and what it spends. The US (SPY)(IVT) budget deficit is creeping up. The administration expects annual budget deficits to rise ~$100.0 billion more than what was previously forecast for each of the next three years.
The US consumer price index (or CPI) for July rose 0.2% sequentially and 2.9% over the last 12 months. The core CPI, which excludes the volatile food and energy components, rose by 2.4% in the 12 months to July, which was the largest increase in core CPI since September 2008. In June, core CPI rose by 2.3%.
The demand for gold in India (INDA) fell 7.0% in the second quarter, mainly due to stronger equity markets and higher gold prices measured in rupees. This event caused local gold prices to rise, even with the price decline measured in US dollars.
Iamgold (IAG) generated revenues of $277.4 million in Q2 2018, which represents a YoY (year-over-year) growth of 1.1%. Its higher realized prices and higher sales at its Rosebel mine were offset by lower sales volumes at its Essakane and Westwood mines. Its attributable gold production was 214,000 ounces, which was 4% lower than Q2 2017.
Iamgold (IAG) reported its Q2 2018 results after the market closed on August 8. It reported EPS of $0.03, beating the consensus estimate by $0.02. Its revenues, however, missed the expectation, coming in at $277.4 million compared to the consensus of $301 million.
A currency crisis is currently rattling the world markets. Today, the Turkish lira (TUR) has plunged 20% against the US dollar (UUP), bringing its YTD (year-to-date) fall to 42%. The markets fear that this will spread to other regions, especially emerging markets (EEM).
According to a Reuters poll of 35 analysts and traders, the average gold price (GLD(IAU) forecast for 2018 and 2019 is $1,301 and $1,325 per ounce, respectively. Heavy losses suffered by gold prices in the second quarter led most of the analysts to lower their price estimates for the precious metal.
The CFTC (Commodity Futures Trading Commission) reports the position of major players in the futures market through its COT (Commitment of Traders) report. This report specifies the positioning of various players in the market. The report is released every Friday and shows the open interest recorded on the previous Tuesday.
The Federal Reserve’s tighter policy stance has also stalled gold’s rally. The Federal Reserve, the world’s major central bank, is raising rates in contrast to the rest of the world’s central banks, which are still following a loose monetary policy. For the week ended August 3, speculators were net long on the US dollar for the seventh straight week.
The unemployment rate for July fell 0.1% sequentially to 3.9%—its lowest point in nearly 18 years. Another highlight of July’s unemployment data was that the unemployment rate for the least educated US workers fell to 5.1% in July, the lowest since the government started collecting data in 1992. While the other elements of the US (VOO)(SPY) jobs report have picked up pretty much according to the economists’ expectations—or as Federal Reserve would like—wage growth has not shown as much acceleration.
The US (IVV)(QQQ) employment data for July was released on August 3. The job additions in July reached only 157,000, lower than the expectations of 190,000 job additions. Business and professional services gained 51,000 jobs, and the manufacturing (XLI)(CARZ) sector added a healthy 37,000 jobs.
Cryptocurrencies have suffered one heck of a head fake, and Ethereum (ETH-USD) investors were not immune. Earlier this year, ETH became a hedge of sorts within the wild virtual-currency markets. By the beginning of February, the crypto-coin had “only” lost about 19% of value from its all-time high. This compared very favorably to bitcoin, which lost 52%.
MARKET PULSE Gold futures closed barely in positive territory Tuesday, holding modest gains for much of the session as a leading dollar index (DXY) fell about 0.2%. A softening greenback has provided some short-term lift to the bullion, which has been trading near the year's lows.
Trade war fears have once again flared up with China threatening to impose tariff on $60 billion worth of American goods if the United States places more tariffs on Chinese imports. The list includes new 5,207 products including aircraft, soya bean oil, smoked beef, coffee and flour imported from the United States, with charges ranging from 5-25%.Source: ©iStock.com/MarcoCoda
Yahoo Finance's Jared Blikre joins Seana Smith from the floor of the New York Stock Exchange to discuss the latest market moves.