Gold Tops $1300 As Russian Rumblings Stumble Stocks

Tyler Durden's picture

Bonds, Gold, and JPY are bid this morning as US equity futures are fading fast. The Dow and S&P futures are now back below pre-AAPL/FB levels and Nasdaq futures falling fast. Gold is back above $1300 (up over $30 from yesterday's pre-Putin lows). Treasuries, led by the long-end, are rallying as safe-haven bids appear across the whole complex. 30Y yields are down to 3.53 - the lowest since July. JPY is bid once again as USDJPY tests back to the crucial 102 level.

First, a quick bulletin summary of the key overnight events:

  • Treasuries rise, with 10Y and 30Y leading weekly gains amid increasing tensions in Ukraine; Russia’s military began new exercises on the countries’ border as S&P cut Russia’s sovereign rating to BBB-.
  • Russia’s central bank unexpectedly raised its one-week auction rate to 7.5% from 7%; U.S. secretary of state Kerry warned Putin he’s running out of time to comply with an accord to ease tensions
  • Obama said the U.S. and its allies “will follow through” on additional sanctions if there is no progress; plans to call European leaders today to discuss options
  • Merkel spokesman Steffen Seibert said Russia’s actions in eastern Ukraine are “absolutely disappointing”
  • Israel said it will suspend Middle East peace talks because of the Palestinian Authority’s reconciliation agreement with Hamas; Obama said no Middle East deal expected in next six months
  • EU officials are preparing to pit the bloc’s banks against the toughest simulated recession that they have ever faced in a stress test, three people briefed on the matter said
  • U.K. retail sales rose 0.1% in March, more than expected, as warm weather boosted spending on spring clothing
  • A drunk passenger on board a Virgin Australia Holdings Ltd. plane destined for Bali, Indonesia, caused a hijack scare after trying to enter the cockpit
  • Sovereign yields mostly lower. Asian stocks ex-Japan mostly lower; Nikkei +0.4%, Shanghai -1.00%. European equity markets fall; U.S. stock futures slightly higher. WTI crude and copper lower, gold gains

 

Dow and S&P futures are well below pre-AAPL/FB levels...

 

As Gold breaks above $1300

 

As the 30Y yield drops to new 9-month lows...

 

Critical for the open is USDJPY holds 102...

 

The remainder of the overnight events courtesy of RanSquawk:

Asian Headlines

Japanese National CPI and the forward-looking Tokyo CPI missed expectations despite the Y/Y coming in at its highest level since 1992, with some analysts noting that inflation above 3.0% could lead to further easing by the BoJ at their meeting next week . Whilst Asian stocks closed mostly lower (Hang Seng Index -1.5%, Shanghai Composite -1.0%), but the Nikkei 225 (+0.17%) was somewhat shielded from losses amid a series of positive earning reports.

Ukraine/Russia

The Russian Micex traded lower at the start of the session after Russia was cut by S&P from BBB to BBB-. However, losses were trimmed after Russian foreign minister Lavrov said Russia will push to de-escalate the Ukraine conflict despite accusing US Secretary of State Kerry of using a prosecutorial tone. This was later followed by reports of a Ukraine helicopter damaged after shot by a sniper and comments from Russian President Putin saying Russia should increase production of anti-missile systems.

EU & UK Headlines

Fitch affirmed Italy at BBB+; revised outlook to stable from negative. Separately, S&P affirmed France and the EFSF at AA; outlook stable. (BBG/RTRS)
Barclays preliminary pan-Euro agg month-end extensions for April: +0.09y (March +0.07y)
Barclays preliminary Sterling month-end extensions for April: +0.02y (March -0.02y)

US Headlines

Attention turns to further US earnings from Ford and AbbVie, with US PMIs and University of Michigan data to shed more light on US economic confidence, which was dampened this morning after Goldman Sachs slashed their GDP estimate for Q1 to just 1.0% from 1.4% prior saying they expect Q1 to be the lowest point of the year for growth, with substantial weather effects and inventory drag weighing on growth.
Barclays preliminary US Tsys month-end extensions for April:+0.08y (March +0.07y)

Equities

European equities started Friday's session on a lacklustre note (Eurostoxx 50 currently -0.69%) as overhanging fears of escalation in Ukraine kept riskier assets under pressure, taking the shine out of further M&A chatter for Shire and Tate & Lyle today.

FX

GBP strengthened as retail sales beat expectations, but the moves were relatively muted given the touted weather effect on the numbers. The JPY trades higher on the back of flight to quality, as markets looked beyond lower than expected CPI overnight. Note there are USD 2.5bln worth of option expiries in USD/JPY to roll off at 1000am NYcut (1500BST).

Commodities

WTI has been offered since the European open now touching Wednesdays lows with little support seen until USD 100.00/100.39. This follows on from a strong session yesterday after flared tension in Ukraine supported WTI. Reports emerging of Russian Military mobilization and Ukraine giving Russia a 48 hour deadline to "explain" their movements. Bank of America says that WTI price has decoupled from Brent and time-spreads. (BBG)

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BandGap's picture

Cause when the going gets tough I convert to Yen.

Bad craziness.

GetZeeGold's picture

 

 

Just stay in gold......why go through the hassle?

BandGap's picture

Just kidding. The only conversion I'm making is from imported to domestic.

My silver miner (EXK) is looking to pop. Somebody knows something.

29.5 hours's picture

 

 

Why blame the move on the Russians?  My theory: Bieber visiting Yasukuni.

 

 

samcontrol's picture

Sorry i have to ask again..

If you have NO access to physical, what would you buy?

Pslv, Phys. (sprott funds)

CEF

miners.. take a pic.
Paas, EXK, AG, NEM, SVM, Vale.

Streamer
Slw

or even future miners
PZG

thanks

MeMongo's picture

You ain't got a coin dealer near you? Cuz all those coordinates you just typed are seriously giving mongo a headache!

Latitude25's picture

A plane ticket to Dubai for the weekend.

samcontrol's picture

patagonia - Dubai for the weekend ....ummmm

and that tiny detail. customs with 20kg of gold...

Latitude25's picture

Why didn't you say where you were?  OK now the plan is to fly or bus or drive to La Paz, Bolivia and go to the gold district where you can buy gold freely as nuggets and jewelry.  I know becasue my wife's Bolivian and we go there frequently.  By the way I would recommend not doing it all in one trip with 20 kilos.  You would be more secure with many trips of lesser amount.

samcontrol's picture

I went to another region of Bolivia where they happen to have some of the best chicks in the world. I was interested in other type of gold in those days.

mrpxsytin's picture

I've been thinking that if you want to peg your position to gold then buy AUD.

Australia has 5200 tonnes of economically extractable ore sitting in the ground: http://www.australianminesatlas.gov.au/education/fact_sheets/gold.html

If the gold price goes crazy then surely AUD will rise right? Check out the correlation between AUD/USD and GOLD in USD:

AUD/USD: http://www.dollars.com/chart/AUD-USD?period=10y

GOLD in USD: http://www.indexmundi.com/commodities/?commodity=gold&months=120

This is the reason I believe that the RBA is unable to keep the AUD down. The uptick in GOLD is forcing the AUD higher. 

mrpxsytin's picture

I zoomed in on that pair for the last year.

AUD/USD: http://www.xe.com/currencycharts/?from=AUD&to=USD&view=1Y

Gold in USD: http://www.indexmundi.com/commodities/?commodity=gold&months=12

Tell me those charts aren't identical...

samcontrol's picture

YES.

Surely a good way to diversify from a US$ portfolio..
But I do not see that trade beat silver or silver miners ,,o r australian miner
BHP,is it?

mrpxsytin's picture

I just figure that simply being an Australian is a peg to gold. So long as I am living here I will benefit from a rise in gold. 

If gold goes ballistic maybe I'll just go on welfare and then move to a third world country like the USA... :P

onewayticket2's picture

it's another way to keep the equity market from getting any more frothy.....sabre rattle from a position of weakness.

Spungo's picture

Oh shit, nigga. That yen is going double uranium, son!

Gold will close below 1290. Just wait for it. Either way, I don't really care. Now is a bad time to sell, and I don't have any cash to buy more.

MeMongo's picture

Yeah spungo your current situation reminds me of playing ball as a kid when you got caught in a "pickle"!

GrinandBearit's picture

Another ZH jinks/contrary post... watch it fall now.

Save_America1st's picture

I hope the paper price does go down by the end of the day.  Bring it on!  Stackers don't need the silver rocket to leave the launch pad just yet by a long shot. 

It's payday, bitchez, and that means trading in the excess fiat for REAL money: phyzz silver.  I'd love if by the end of the day it's back under 19.50/oz.

Average cost of production after digging it up is still around 24/oz.  Then add purifying, shipping, minting, and premium and we can still get pure shiny Buffaloes for 21/oz!!!  Talk about a steal!

Go get a roll or 2 or 3 today, and have a kick ass weekend, folks! 

Some great research and analysis at Steve St. Angelo's site right now too for some weekend reading:

U.S. Exports A Record Amount Of Gold To Hong Kong In January

 

Silver Continues To Drain From The Shanghai Futures Exchange

 

The Dark Side Of The Silver Mining Industry

 

 

Spungo's picture

Miners I'm holding at the moment:
Atna (ATN.TO) (highly speculative)
2x Canadian gold index (HGU.TO)
Starcore  (SAM.TO)
Silvercorp (SVM.TO) 

Drillers:
Foraco (FAR.TO) 
Geodrill (GEO.TO) 

It's weird to look at the big miners. Some of them have astounding losses. I don't mean net income losses where they report a theoretical loss because a mine is written off. I mean actual cash losses on an operating basis. 

Fix-ItSilly's picture

What are Putin's derivative trading profits?

JustObserving's picture

The Fed has been able to control gold and silver for years now.  Today will be no different.

When gold rises $100 to $200 a day and silver rises 10% in a day, the Fed will have lost control.

samcontrol's picture

they could control silver back to 30 or 40 to make things look normal...then wash rince repeat

Peter Pan's picture

These politicians will go tit for tat until they realise that they stand to lose the electoral support of their people. At that point things between the warring politicians on both sides are patched up and the ordinary people are left carrying the baby for all the damage inflicted in the meantime.

Spungo's picture

"I've been thinking that if you want to peg your position to gold then buy AUD."

Don't do this. Resources in the ground are worth literally nothing when it comes to currencies. Venezuela has fuckloads of oil, but their currency is garbage. Actually, most of South America is very rich in resources, but their currencies are shit. Africa is the most resource rich continent inhabited by humans because it's untapped, but African currencies are shit. I have a 10 trillion dollar Zimbabwe bill in my drawer to prove it.

samcontrol's picture

lol,
I have no clue about Australian governments but they are NOT waisting their currency as any South American country.

ghostzapper's picture

Increased my Bitcoin position meaningfully this AM in the 440's.  Just about completing a process of working through a reasonable TA process and pattern.  Enough of a likelihood that foundation is set for next phase in the expansion for me to grab more. 

If it were worthless and going bye bye that would have already happened long ago. 

RazorForex's picture

Gold is going up, we have fundamental and technical analysis factors all lining up. I think we go for the $1330 level next few days. I think once the Russia conflict goes into full swing the sky is the limit for gold!

http://razorsforex.blogspot.com/2014/04/gold-technical-analysis-bullish....

GTC's picture

I wish the miners would just shut down their mines for a few days. Just say fuck it, we're not doing any mining today. If enough of them did that, that could trigger a major price bump.