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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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Fri, 04/25/2014 - 07:39 | 4694464 BandGap
BandGap's picture

Cause when the going gets tough I convert to Yen.

Bad craziness.

Fri, 04/25/2014 - 07:40 | 4694470 GetZeeGold
GetZeeGold's picture

 

 

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

Fri, 04/25/2014 - 07:44 | 4694486 BandGap
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.

Fri, 04/25/2014 - 07:47 | 4694495 samcontrol
samcontrol's picture

like the bottom was in ..in December and nobody sees it?

Fri, 04/25/2014 - 07:59 | 4694522 negative rates
negative rates's picture

Don't tell mom, she can't see anything.

Fri, 04/25/2014 - 08:31 | 4694629 Bangin7GramRocks
Bangin7GramRocks's picture

Oh no! We might not see another all-time high until sometime on Tuesday. Lock all the high floor windows!!!!

Fri, 04/25/2014 - 07:43 | 4694481 29.5 hours
29.5 hours's picture

 

 

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

 

 

Fri, 04/25/2014 - 07:45 | 4694484 samcontrol
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

Fri, 04/25/2014 - 07:54 | 4694508 MeMongo
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!

Fri, 04/25/2014 - 08:43 | 4694679 samcontrol
samcontrol's picture

no

Fri, 04/25/2014 - 08:00 | 4694524 negative rates
negative rates's picture

I hear merry go rounds are hot this time of year.

Fri, 04/25/2014 - 08:01 | 4694530 Latitude25
Latitude25's picture

A plane ticket to Dubai for the weekend.

Fri, 04/25/2014 - 08:43 | 4694674 samcontrol
samcontrol's picture

patagonia - Dubai for the weekend ....ummmm

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

Fri, 04/25/2014 - 09:00 | 4694740 Latitude25
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.

Fri, 04/25/2014 - 11:49 | 4695445 samcontrol
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.

Fri, 04/25/2014 - 08:04 | 4694537 mrpxsytin
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. 

Fri, 04/25/2014 - 08:12 | 4694560 mrpxsytin
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...

Fri, 04/25/2014 - 08:46 | 4694693 samcontrol
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?

Fri, 04/25/2014 - 08:54 | 4694721 mrpxsytin
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

Fri, 04/25/2014 - 07:55 | 4694488 onewayticket2
onewayticket2's picture

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

Fri, 04/25/2014 - 07:52 | 4694507 Spungo
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.

Fri, 04/25/2014 - 07:57 | 4694511 MeMongo
MeMongo's picture

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

Fri, 04/25/2014 - 07:59 | 4694521 GrinandBearit
GrinandBearit's picture

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

Fri, 04/25/2014 - 08:16 | 4694570 Save_America1st
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

 

 

Fri, 04/25/2014 - 08:01 | 4694529 Spungo
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. 

Fri, 04/25/2014 - 08:02 | 4694531 Fix-ItSilly
Fix-ItSilly's picture

What are Putin's derivative trading profits?

Fri, 04/25/2014 - 08:02 | 4694532 JustObserving
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.

Fri, 04/25/2014 - 08:50 | 4694708 samcontrol
samcontrol's picture

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

Fri, 04/25/2014 - 08:18 | 4694582 Miss Expectations
Miss Expectations's picture

Gold Finger.

Fri, 04/25/2014 - 08:20 | 4694585 Peter Pan
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.

Fri, 04/25/2014 - 08:22 | 4694593 Spungo
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.

Fri, 04/25/2014 - 08:52 | 4694715 samcontrol
samcontrol's picture

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

Fri, 04/25/2014 - 09:11 | 4694793 ghostzapper
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. 

Fri, 04/25/2014 - 10:17 | 4695078 RazorForex
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....

Fri, 04/25/2014 - 14:59 | 4696528 GTC
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. 

 

 

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