Diamond News Archives

Gold softened overnight in a range of $1220.90 -$1225.65, fading the direction of the US dollar.

The yellow metal ticked up to its high of $1225.65 during early Asian time as the DX edged to its low of 96.73.

Later during European hours, however, gold slid to its low of $1220.90 - finding support ahead of $1218-21 (6 bottoms, 11/19, 11/20, 11/21, 11/23, 11/25, and 11/29 lows).

Gold was pressured as the dollar turned higher (DX to 97.02) - boosted by weakness in sterling ($1.2809 - $1.2746, ongoing Brexit concerns) and the euro ($1.14 - $1.1357, miss in German Retail Sales, Euro CPI).

Global equities were mixed with the NIKKEI up 0.4%, the SCI was +0.8% (despite misses on China’s PMIs), European shares were off from 0.4% to 0.7%, and S&P futures were off 0.5%. A pullback in oil (WTI from $51.40 - $50.33) weighed on stocks.

Some dovish comments from the Fed’s Kashkari (Fed should pause on rate hikes, rates close to neutral, hiking rates too forcefully could risk recession) and Williams (risk of inflation persistently too low, neutral rate of interest not far from current levels) along with upbeat comments from US Trade Rep Lighthizer (would be surprised if Trump-Xi meeting wasn’t a success) helped boost S&P futures (2740), and took the US 10-year bond yield down to 3.011%.

The DX, however failed to decline and rose to 97.10 as further weakness in sterling ($1.2734, growing uncertainty about Brexit amid fierce opposition in Parliament) and the euro ($1.1333) kept it firm. Gold – after rebounding to $1223 – slid to $1220.

After opening weaker, US stocks rallied into positive territory by mid-morning (S&P +9 to 2747), aided by a much stronger than expected reading on the Chicago PMI (66.4...

Recent housing data has been downright miserable. New home sales fell through the floor and existing home sales had a string of six consecutive declines. That trend broke last month but it won't last.

The pending home sales index for October is down a very steep 2.6%. The lowest Econoday^[1] guess was -0.5% with the consensus unchanged.

The Wall Street Journal reports The U.S. Housing Boom Is Coming to an End, Starting in Dallas^[2].

A half-hour drive straight north from downtown Dallas sits one of the fastest-growing counties in the country. Cotton fields have been replaced with Toyota’s new North American headquarters, a Dallas Cowboys training facility and a sand-colored shopping strip with a Tesla dealership and a three-story food hall.

Yet even with the booming growth, Dallas’s once vibrant housing market is sputtering. In the high-end subdivisions in the suburb of Frisco, builders are cutting prices on new homes by up to $150,000. On one street alone, $4 million of new homes sat empty on a visit earlier this month. Some home builders are so desperate to attract interest they are offering agents the chance to win Louis Vuitton handbags or Super Bowl tickets with round-trip airfare, if their clients buy a home. Yet fresh-baked cookies sit uneaten at sparsely attended open houses.

Dallas has been the “canary in the mine shaft” this housing cycle, said Paige Shipp, regional director for Metrostudy, a consultant to home builders. Homes are taking longer to sell, bidding wars are rarer and price cuts are more common as buyers absorb the impact of higher rates.

Inventory Change and Valuations...

The London Interbank Offered Rate (LIBOR) has been rising since The Federal Reserve began raising their target rate back in late 2015 and has accelerated as The Fed began rapidly raising its target rate after Donald Trump’s election as President.

LIBOR 1 month is following a “jump process” where is surges or jumps periodically ahead of The Fed’s rate hike announcement. But the NY Fed’s SOFR index tracks the Fed’s target rate

As closer look since SOFR was introduced.

So, the New York Fed’s SOFR index takes out the front-running of The Fed’s rate increases.

Oops! LIBOR spikes again … ahead of The Fed’s rate hike.^[1]

The Fed’s not that innocent.^[2]

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References

1. ^{^} Oops! LIBOR spikes again … ahead of The Fed’s rate hike.(www.youtube.com)
2. ^{^} The Fed’s not that innocent.(getyarn.io)

Anglo American Plc, the company that grew to be South Africa’s biggest during apartheid, says it’s ready to invest in the country again.

After years of legislative uncertainty, relations had soured to the point where Anglo’s chief executive officer wasn’t on speaking terms with the former mining minister after he made a critical speech. In October, Anglo pledged to spend $6 billion on its assets in South Africa at an investment conference hosted by Ramaphosa. 

Things have improved since Cyril Ramaphosa, who co-founded the country’s biggest mining labor union, became president in February and appointed Gwede Mantashe, another former unionist, as mines minister. Mantashe has resolved a dispute over black-ownership rules, giving mining companies more certainty on their investments.

“Whilst we don’t have all the things that we would like to see, that will in our view provide the foundation for significant investment going forward, we’re a long way down the track,” Anglo CEO Mark Cutifani told journalists late Wednesday. “Confidence has been returned in terms of the conversation and, from our point of view, the confidence to invest in the future, certainly in terms of our assets — that’s been very important.”

In October, Anglo pledged to spend $6 billion on its assets in South Africa at an investment conference hosted by Ramaphosa. Critics have suggested that not all of that investment is new and the money would have been spent any way, but Cutifani disagreed.

As things stood 18 months ago, including the dispute around the country’s Mining Charter, “quite frankly, that money was at risk,” he said.

Founded in Johannesburg in 1917 to exploit the world’s biggest gold field, Anglo American today mines platinum, coal, diamonds and iron ore in South Africa.

(By Antony Sguazzin) 

The...