Striving for stability

March 7, 2016 09:28 AM

Currencies

The U.S. dollar index closed at 972.30, down 37 points as the contraction in hourly wages outweighed to some extent the "positive" jobs report. Another factor was the weaker than expected reading on trade which reported that U.S. exports declined by 2.1% in January while imports were down 1.3%. We remain on the sidelines in currencies since we view the global economic picture as negative and exacerbated by the influx into Western countries of hundreds of thousands immigrants, putting a strain on an already weak situation.


Energies

April crude oil closed at $35.92 per barrel and was a factor in the U.S. equity market rally. For the week, crude was up 9.6% as talk of a potential output freeze by major producers changed the supply/demand estimates. The decline in the number of active U.S. oil drilling rigs for the 11th week in a row helped the bullish scenario. We feel the supply/demand situation and the current supply glut will overcome any threats of production cuts as the recessionary trend we see will outweigh any reduction in production. Stay out for now, but with a bearish view.


Precious metals

April gold closed at $1,263.70, down $7.00, but is up 19.8% since December, tied to the investment attraction as negative rates in Japan and Europe provided the impetus for precious metal gains. Traders feel the sharp rally in gold was exaggerated and we agree. Silver closed at $15.60, down 9.4c. We prefer the sidelines in precious metals.

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About the Author

John has over 40 years experience at major U.S. Brokerage firms as Manager and Director of various International Divisions and is the founder of his own trading and brokerage firms. Over the years John has gained a wealth of knowledge and experience in all aspects of investments and trading. He was also a floor trader at the Commodity Exchange in New York. He formed Acuvest in 1999 and can be reached at futures@acuvest.com.