International gold demand remains steady in Q1: WGC

International gold demand remained unchanged in the first quarter of this year at 1,074.5 tonnes, while jewellery purchases made moderate gains of 3 per cent mainly due to lower gold prices, according to the World Gold Council report.

Global demand for gold stood at 1,077.2 tonnes in the January-March quarter of the previous year.

“... Quarter 1, 2014 signals a return to the long-term average patterns of demand, holding steady at 1,074 tonnes. It is clear that the longer term underpinnings of the gold market, like jewellery demand in Asia, remain firmly in place,” Marcus Grubb, WGC Managing Director (Investment Strategy), said.

It demonstrates the continuing resilience of the market and the unique nature of gold as an asset class, he added.

Demand for jewellery

Global demand for jewellery went up by 3 per cent to 571 tonnes in the first quarter of this year, largely due to lower gold prices compared with Q1 2013, the WGC ‘Gold Demand Trends’ report said.

Seasonal factors, notably Chinese New Year, contributed to record first quarter jewellery demand in China, it said.

There was a 10 per cent rise in demand for jewellery in China, which became the largest global market for gold demand in 2013.

New year seasonal affects were also present in a number of markets in the South East Asian region, especially in Indonesia and Vietnam, where demand increased by nine per cent and three per cent, respectively.

Central banks continued to be strong buyers, purchasing 122 tonnes in the quarter.

“While this represents a fall of six per cent compared to Q1 2013, it is the 13th consecutive quarter, in which central banks have been net purchasers of gold,” the report said.

Exchange traded fund flows

Movements within the investment space were more striking as net ETF (exchange traded fund) flows were zero compared with 177 tonnes of outflows in Q1 2013.

Demand for bars and coins fell 39 per cent to 283 tonnes.

However, this coincided with the first rise in the quarterly average gold price seen since Q4 2012, which encouraged private investors to wait for clearer signs about the longer term path of the price of gold before deciding on their investment strategy, it said.

Euro Dollar Trading Has Barely Changed In Five Years.

For all the headlines and hand-wringing since 2009 about the viability of the euro, its exchange rate versus the dollar has barely changed in five years.

While we admit the observation may seem superficial (the euro rose to $1.51 in 2009 and fell to $1.19 in 2010), we make mention in order to highlight the distinction between holding euros over time versus trading euros short-term across time zones, where the Citigroup currency team has identified an uncanny trading pattern.

To understand the opportunity, first recognize how dealers trade currencies. There are three "spot" markets for trading euros over the course of a 24-hour day. New York constitutes the primary market from 8am to 5pm ET, followed by Tokyo 5pm to 1am ET and then London 1am ET until New York resumes the following day at 8am.

Citigroup Head of G10 FX Strategy Richard Cochinos analyzed the intra-session price action of the euro for the three spot markets and found a very clear pattern since 2009. Whereas London tended to trade lower, New York tended to trade higher. Asia was roughly flat. Over time, this pattern created some significant distortions.

Reliable patterns are hard to come by, and this one strikes us as particularly valuable. As Mr. Cochinos wrote to clients: "Day trading behavior is tending to skew prices in a meaningful manner. Supporting evidence for this type of quick reversal has also shown up in our cash order flow."

As for those of us wondering how to profit, he elaborates:

International money flows are complex. This relationship is not: Buy euro dips early in the London session, sell them in New York late afternoon.

 Bloomberg annotates in charts so simple a 5th grader can get it

London Metal Exchange technical glitch hits warehouse stocks report

 The London Metal Exchange (LME) said on Monday technical problems were affecting some market data reports, including warehouse stocks.

The LME said in a statement that all other systems, including those for trading, matching and warrant management were fully operational.

A daily report showing the movement of warehouse inventories was due to be issued at 0800 GMT. The exchange, owned by Hong Kong Exchanges and Clearing Ltd <0388.HK>, did not say when it expected to resolve the problems.

US Aluminum shipments rise 9.8% in April '14, inventories up: MSCI

The latest released statistics by the Metals Service Center Institute (MSCI) indicate that the aluminum shipments from the US and Canada were up during April this year in comparison with the same month a year ago.

According to data released by MSCI, the total aluminum shipments from various US service centers in April this year totaled 139,500 mt, which is 9.8% higher than the shipments recorded during same month the previous year.

The total aluminum shipments from the US during the first four months of the year 2014 amounted to 533,600 mt. The shipments during this period are up 10.1% in comparison with the shipments during the corresponding four-month period in 2013.

The current aluminum inventories of US are at 391,700 mt at the end of April, higher by 6.7% in comparison with the aluminum inventory levels in April 2013.

As per MSCI data, the total aluminum products shipment by Canada through various service centers amounted to 13,400 mt during the month of April this year. This is 6.6% higher when compared to the shipments during April 2013.

The total aluminum shipments from Canada during the first four months of the year 2014 amounted to 52,700 mt. The shipments during this period are marginally higher by 0.5% in comparison with the shipments during the same period in 2013.

The current aluminum inventories of Canada are at 39,500 mt at the end of April, up by 6.6% in comparison with the aluminum inventory levels in April 2013.

Weekly Economic Data for the week 17-May-14 to 23-May-14

Exp.:	Expected or Anticipated value calculated from the recent survey conducted.
Prior:	Represents the last actual for each indicator. In case there is a revision to the last actual, the prior column reflects the prior figure as revised.
Exp. change today:	Exp. - Prior
Avg. change of last 1 year:	Average Change in Actual data calculated for last 1 year.
Expected impact on price:	This indicator shows the effect of the anticipation of data on the prices of related country’s major indices. We have categorized it as below: Very Good Good Neutral Bad Very Bad
Actual:	Refers to the actual/latest figures after its release.

Data for the week 17-May-14 to 23-May-14

Date	Time (IST)	Country	Data	Exp.	Prior	Exp. chg today	Avg. chg of last 1 year	Exp. Impact on Price
19-May-2014	08-00 PM	Germany	Merkel Gives Speech at Carl Zeiss Foundation in Jena					Neutral
19-May-2014	09:40 PM	United States	Fed's Williams and Fisher to Discuss Monetary Policy in Dallas					Neutral
20-May-2014	02-00 PM	United Kingdom	Consumer Price Index (MoM)	0.30%	0.20%	0.10%	0.00	Neutral
21-May-2014	--	Japan	Bank of Japan Monetary Policy Statement					Neutral
21-May-2014	08-30 AM	Japan	BOJ Governor Kuroda Press Conference After Rate Decision					Neutral
21-May-2014	--	Japan	BOJ 2014 Monetary Base Target	¥270T	¥270T	0.00	0.00	Neutral
21-May-2014	02-00 PM	United Kingdom	Bank of England Releases Minutes from May 7-8 Meeting					Neutral
21-May-2014	07-30 PM	European Monetary Union	EC - Consumer Confidence	-8.3	-8.6	0.30	1.04	Neutral
21-May-2014	08-00 PM	United States	EIA Crude Oil Stocks change	--	0.94	-0.94	3.45	Neutral
21-May-2014	08-30 PM	United States	Fed's Yellen Gives New York University Commencement Speech					Neutral
21-May-2014	11-30 PM	United States	Fed Releases Minutes from April 29-30 FOMC Meeting
22-May-2014	07-15 AM	China	HSBC China Manufacturing PMI	48.3	48.1	0.20	0.97	Neutral
22-May-2014	02-00 PM	United Kingdom	GDP QoQ	0.8%	0.8%	0.00%	0.28	Neutral
22-May-2014	06-50 PM	Germany	Merkel Holds Speech at German Construction Industry Congress					Neutral
22-May-2014	07-30 PM	United States	Existing Home Sales	4.68M	4.59M	0.09M	0.16	Neutral
22-May-2014	08-00 PM	United States	EIA Natural Gas Storage change	--	105	-105.00	33.60	Neutral
23-May-2014	01-30 PM	Germany	IFO - Business Climate	110.9	111.2	-0.30	0.00	Neutral
23-May-2014	07-30 PM	United States	US-New Home Sales	0.42M	0.38M	0.04	0.01	Neutral

USD/JPY forecast for Monday

During Friday’s trading session USD/JPY traded within the range of 101.36-101.67 and closed at 101.52, losing 0.05% on a daily basis and 0.33% for the week.

Fundamental view

Japanese Machine Orders probably increased 4.2% in March on annual basis and 6.0% on a monthly basis, according to the median estimate by experts. In February compared to January orders declined 8.8%, while in February this year compared to February 2013 there was an increase by 10.8%. The indicator gauges the total value of machinery orders, placed at major manufacturers in the country. It is regarded as a leading indicator of business capital spending. An increase indicates that business confidence in Japan probably improved, while a decrease reflects a weaker confidence. In case Machine Orders increased more than projected, this would have a bullish effect on the yen. Japan’s Cabinet Office is to release the official data at 23:50 GMT on May 18th.

In case USD/JPY manages to breach the first resistance level at 101.68, it will probably continue up to test 101.83. In case the second key resistance is broken, the pair will probably attempt to advance to 101.98.

If USD/JPY manages to breach the first key support at 101.35, it will probably continue to slide and test 101.21. With this second key support broken, the movement to the downside will probably continue to 101.05.

World's Biggest Exporters Of Weapons Or Arms

One glance at the following chart prepared by the Economist, showcasing the world's largest importers of weapons, and more importantly, exporters, and one could almost imagine why both the US and Russia have an interest in a "contained" (or not so much) regional war...

Some more insight:

Five countries—America, Russia, Germany, China and France—accounted for three-quarters of international arms exports over the past five years. China tripled its share in that time, overtaking France. It is on track to surpass Germany to become the third-largest arms dealer. Business is brisk. Overall, sales between 2009 and 2013 were 14% higher than the previous five-year period, according to the Stockholm International Peace Research Institute, which tracks the arms trade. China sells to 35 mainly low- and middle-income countries, but is also a big importer (two-thirds of its weapons come from Russia). America exports to over 90 nations, with aircraft making up most of its sales. Russia exports more ships than any other country. Its weapons exports have significantly increased, thanks in part to being India's biggest supplier, accounting for three-quarters of its arms purchases. As for Ukraine, it exports more weapons than Italy or Israel. But with regional tensions flaring, it may choose to keep some of those arms for itself.

Source: Economist