Dow closes above 16,000 on renewed optimism

Friday, November 22, 2013

Janet Yellen’s nomination to Fed chairman was approved by the Senate Banking Committee yesterday, paving the way for a vote in the full Senate. The dovish tone already struck by Yellen in her testimony earlier this week went some way in shoring up risk assets as US equity markets maintained solid support after pulling back slightly off recent record highs. Yesterday’s approval alongside comments made by Fed officials supported both the S&P 500 and DJIA higher, adding 0.81% and 0.69% respectively. Financial groups led the surge, with the Dow closing above 16,000 for the first time as gains made above this level earlier in the week struggled to hold.

Gold prices are on track for their worst weekly performance since September as prices traded towards a four month low below $1,250, down 4.1% this week. Demand for bullion has fallen in recent weeks as investors continue to speculate on the tapering timeframe, with the release of October’s FOMC meeting minutes earlier this week signalling that the Fed may scale back efforts in the coming months. Prices have dropped 25% ytd, positioning the yellow metal for the first annual decline since 2000.

Aluminium premiums in Japan are expected to hold near record levels throughout Q1 2014 as a combination of economic stimulus and supply disruptions support higher levels. According to Bloomberg, surcharges for the first three months starting in January are likely to be set around the current quarter’s $245-$246 premium over the LME cash price. Demand will be pushed higher as construction and auto activity picks up before the scheduled tax increases in April, and with Indonesian and Middle Eastern supply restricted as joint venture agreements come to an end and smelters faces partial shutdowns premiums could be supported higher. 

DJIA closes above 16,000 on renewed momentum

DJI Index Dow Jones Industrial 2013 11 22 08 18 33


Gold prices on track for first annual loss in 12 years

XAU Curncy Gold Spot Oz Y 2013 11 22 08 17 56


Gold ETF holdings have experienced massive outflows this year

ETFGTOTL Index Total Known ETF 2013 11 22 08 23 43


Events for today: Friday, 22 November 2013

0900

DE

Nov

IFO - Current Assessment

0900

DE

Nov

IFO - Business Climate

1500

US

Nov

KC Fed

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Topics: DJIA, US Fed, Gold, Aluminium
More from: Kash Kamal