Daily Analysis – Gold Hovers near Record Highs on Debt Concerns

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Equities

Asian markets advanced, shrugging of the threat of a US default, as a deal continues to elude US lawmakers. In Japan, the Nikkei rose .5%, and in Korea, the Kospi advanced .9%, as brokerages rallied. Mining shares lifted the Australian ASX 200, which gained 1%. In China, the Shanghai Compose rose .5%, in a weak bounce following Monday’s steep 3% selloff.

In Europe, markets closed mixed, as the FTSE and DAX rose fractionally, while the CAC40 slid .7%. UBS fell 4% after reporting disappointing earnings, pressuring the banking sector.

The Dow sank 92 points to 12501, as US markets fell for a 3rd consecutive day. The S&P 500 fell .4% and the Nasdaq eased .1%. The VIX market fear indicator rose back above 20.

3M shares dropped 5.4% despite strong earnings, and AK Steel tumbled 17.5% after issuing a profit warning due to falling steel prices.

After the close, Amazon jumped 6.4% after reported earnings which beat analyst expectations.



Treasuries and Commodities

Bond rose with 10-year notes gaining 14/32 to yield 2.95%, and 30-year notes advanced 21/32, yielding 4.28%.

In Energy, gasoline rose 1% to 3.158, and crude oil inched up .3% to 99.52, while natural gas eased .3% to 4.374.

Metals rallied, led by copper which climbed 1.6% to 4.4785. Gold settled at 1618.90, up .4%, and silver rallied 1.4% to 40.925.


Gold Settles Near $1620 in Afternoon Rally



Currencies

The Euro rallied .9% to 1.4508, and the Pound rose .8% to 1.6411 in a broad Dollar selloff. The Australian Dollar advanced .9% to 1.0950, approaching its record high, and the yen rose .4% to 77.935. The Swiss Franc gained .6% to .8010, briefly crossing the .8000 level to touch .7998, a new record.



Economic Outlook

Tuesday’s reports were mostly negative. New Home Sales fell to 312K, worse than the 320K expected, but analysts said rising prices and declining supply suggest the worse may be over. The Richmond Manufacturing index was well below expectations, unexpectedly turning negative in June.

On a brighter note, Consumer Confidence rose to 59.5, better than forecast.

Wednesday’s reports will include Durable Goods, Beige Book, weekly mortgage applications, and weekly oil inventories.

Earnings reports are scheduled for many large caps, including Boeing, Aetna, ConocoPhillips, and Visa.



Binary Options Trading analysis written by Bradley Welcher.