Friday, September 26, 2014

Gold, Oil Prices Fall On Stronger U.S. Dollar

QUICK READ:  A rising dollar had the greatest effect on the markets this week, driving most commodity prices lower. This was especially true for the precious metals, which all neared (or in the case of silver, surpassed) yearly lows. The emergence of a massive international coalition against the terror group ISIL seemed to abate negative investor sentiment regarding the conflict, although the yen, the dollar, and U.S. Treasury notes did see some safe haven demand.

A stronger dollar has been placing downward pressure on commodities prices, including oil and precious metals.  The DXY index marched ever­ higher to 14­ month highs, closing above 85 for the first time since 2010.  This marks 10 consecutive weeks of gains for the greenback as growth (and confidence) in the American economy has been picking up slightly.  Favorable housing data and manufacturing numbers released this week in the U.S. and China helped improve growth projections for the world’s two largest economies.

Risk appetite still appears overly high in the stock markets, even as all the major U.S. indices receded by week’s end.  The markets responded well to the meeting of the UN General Assembly on Wednesday, perhaps spurred by the global consensus on combating the terrorist group ISIL. Yet, all gains were given back on Thursday as the Nasdaq, S&P 500, and Dow Jones all fell more than 1.5%. By Friday’s open, all of these indices remained well in the red: the Dow was below 17,000, the Nasdaq was below 4,500, and the S&P was below 2,000. The yen and 10­year Treasury note both saw some safe haven demand throughout the week, although gold ostensibly did not.

Gold retested its lower boundary of $1,215 throughout the week, bouncing up above $1,220 each time before settling back near $1,217. Despite robust demand for physical silver bullion with prices depressed, the white metal continued to drop to 4­year lows, falling some 30 cents (­1.69%) from Tuesday’s open to Thursday’s close of $17.52. This would seem to imply that the physical market for precious metals has far less influence on prices than the paper markets, among other factors, although we may simply be seeing some profit­taking as investors closed out or rolled over their positions on Thursday, when options on gold and silver on the Comex expired. Both platinum and palladium continued to slide to yearly lows, as well.

In global markets, the Nikkei 225 hit a 7­year high on Prime Minister Abe’s reaffirmation that the Bank of Japan will proceed with its highly accommodative monetary policies. Both the yen and Japanese stocks rose on the news. Meanwhile, the rest of the Asian markets slumped, partly due to the lack of further stimulus or monetary easing by the Chinese. As China presumably turns toward austerity, Japan and the EU are employing extreme quantitative easing, resulting in boosts for their respective stock exchanges­­at least temporarily. 

A LOOK AHEAD: Pending Home Sales data is scheduled to come out on Monday morning, bringing greater clarity to the positive housing numbers released this week. The PMI Manufacturing Index and the ISM Manufacturing Composite Index will both be released for July on Wednesday, the 1st of October.

By Everett Millman, head content writer at Gainesville Coins, a leading gold and silver distributor.

Sunday, September 14, 2014

Led by Tech Giants, Equities Recover from Tuesday Tumble

The dollar was strong against weaker commodity prices this week. The yuan hit a six­-month high, while the pound remained volatile on uncertainty over Scotland’s future with the U.K.

Global markets responded poorly to a statement from the San Francisco Fed that mentioned the potential for earlier ­than ­expected interest rate hikes by the Federal Reserve. This exacerbated concerns over “what happens after QE,” sending most equities into a brief tizzy. This has been a recurring theme all year; it would appear that central banks are gauging how the market reacts to rate increase announcements as a stress test of sorts, waiting until the response is more muted before acting.

China’s Hang Seng Index had an awful Tuesday, tanking more than 2%. This marked the worst week for the index in six months. The combination of the Scotland news and the report released by the San Francisco Fed forecasting looming interest rate hikes had the effect of spooking the markets, sending global stocks on one of their worst nosedives in a month. Asian stocks were generally down, continuing their longest streak of sessions in the red in over four years. 

After stock in Apple dropped from its all­-time high last week on rumors of a security breach of the company’s iCloud, the tech giant was back in force with a tripartite announcement this week. In addition to the simultaneous unveiling of the highly anticipated iPhone 6 and the Apple Watch, even more buzz was generated when the prospect of Apple Pay, the company’s new e­-wallet, came to the fore. This new service poses a direct threat to other digital payment platforms such as PayPal. After sliding back below $100 per share, the stock recovered to $101.26 at Friday’s open, as the rest of the stock market was buoyed by Apple’s renewed strength.

Gold and silver continued last week’s slide in earnest, as gold opened at a three­ month low of $1,255 on Monday and sat at $1,235 by Friday’s open. After a slight recovery on Tuesday, silver slipped below the $19 mark for the first time since early June. Following the shutdown of South Africa’s (and indeed the world’s) largest platinum mine, the white metal was battered all week, dropping to below $1,360 after closing last week near $1,410. Its Platinum Group cousin palladium followed the trend, plunging from an $891 open on Monday to around $826 by Friday morning.

Each of the major U.S. stock indices recovered on Wednesday after posting steep losses on Tuesday. This came on the news that Scotland’s resolve appears strong ahead of next week’s independence referendum. Many large institutional investors in the U.S. and Europe appear worried that Scottish independence could hurt their investments in Scotland and the U.K. After opening above 2,000 on Monday, the S&P 500 fluctuated within a tight range all week. The Dow opened the week at 17,131.71, briefly slipping just below 17,000 on Tuesday before opening above 17,050 on Friday. Thanks to a surge in biotech stocks, the Nasdaq made up almost all of its losses by midweek after Tuesday’s 40­point loss, erasing a drop of nearly 0.9%.

By Everett Millman, head content writer at Gainesville Coins, a leading gold and silver distributor.

Sunday, September 7, 2014

Florida's Citizen's Property Insurance Rates To Drop

TALLAHASSEE, Florida -- The Florida Office of Insurance Regulation (FLOIR) announced last week that it has lowered the 2015 rates for Citizens Property Insurance Corporation (Citizens), Florida’s largest property insurer.  Overall, the statewide average homeowners rate will fall 3.7% compared to the 3.4% decrease requested by Citizens.

The effective date for both new and renewal rates within the Personal Lines Account and Coastal Account is February 1, 2015.

FLOIR also approved last week the removal of up to 425,357 personal residential policies and 2,227 commercial residential polices from Citizens
as part of the state’s ongoing effort to reduce the number of policies in Citizens and transfer them to the private insurance market. 

Citizen’s Personal Lines and Commercial Lines Accounts are mostly non-coastal properties and the Coastal Account are coastal properties.  The take-out periods are November 18, 2014 for personal residential impacting both the PLA/CA policies and November 4, 2014 for commercial residential impacting both the CLA/CA policies.

Last week's announcement brings the total number of policies approved for take-outs this year to 894,156 and the actual number of policies removed from Citizens as of August 30 to 124,995.  By statute, policyholders may choose to remain covered by Citizens; however, they may be at risk of higher assessments, FLOIR warned. 


Florida Auto Insurance Rates Vary Widely By Zip Code

Friday, September 5, 2014

ECB Action Shakes Up Currencies and Commodities

By Terrence Campbell, Marty Menz, and Everett Millman 

A robust dollar and news of economic stimulus in Europe gave a lift to the stock markets while applying downward pressure on precious metals (and most other commodity classes) this week. Investor sentiment matched the ambiguous messages coming from the Ukraine conflict, as it remains unclear whether Russia will favor a swift peace or protracted war. 

U.S. stocks remained flat this week with the Dow Jones Industrial Average and the S&P 500 moving lower by around 0.1 percent and 0.3 percent, respectively, as of Thursday’s market close. The Dow hovers above 17,000 while the S&P slipped below 2,000 as of Friday’s open. The Nasdaq fared worse, falling more than half a percent since Tuesday’s opening, perhaps a result of the 5% drop in Apple stock after news of a leak of data stored on the iCloud; Apple so far denies a breach of iCloud itself.

The U.S. economy continued to experience modest growth (per Fed forecasts) as new aircraft building contracts sent U.S. factory orders up over 10 percent and data released Wednesday showed rising automobile sales. This is in contrast to employment data released Friday, which showed employment growth of only 142,000 jobs for August, the lowest in 8 months; June and July employment figures were also revised downward.

The U.S. Dollar continued to gain, pushing upward to around 83.82 on the DXY dollar index as of Friday morning. This latest push by the dollar, near 14­month highs, coincides with actions taken by European Central Bank President Mario Draghi to help shore up the Eurozone’s floundering recovery, which included lowering interest rates further and initiating quantitative easing. The German stock exchange DAX jumped 1.4% on the news of QE. The British pound also saw a boost from the ECB’s newest attempt to stave off deflation of the Euro.

On the commodities markets, gold and oil became casualties of the newly-­announced moves by the ECB. Gold fell to $1,264 per ounce for the LBMA’s Friday A.M. fix, continuing its 3­ week slide.  Meanwhile, a report published earlier this month by Citigroup shows that gold mining companies have been successful in cutting costs to stay in line with the fall of bullion prices since 2012. The report cautions, however, that this short term cost­-cutting may prove detrimental in the longer term as many cuts have been in the areas of exploration and initiation of new projects, which may inhibit their ability to produce if prices do rise again. Silver continued to perform poorly this week, hovering in the range of $19.20 to $19.15 per ounce. After touching above $900, palladium settled at $889 per ounce at Friday’s open, still up nearly 23% over the last year.

On the week, foreign stock exchanges performed well as Germany’s DAX, Britain’s FTSE, Hong Kong’s Hang Seng, and Japan’s Nikkei all experienced growth from Monday’s open through Thursday. Global markets subsequently saw a slight dip Friday morning. Meanwhile, India’s emerging economy has spurred growth in its stock exchanges, with the Mumbai Sensex up nearly 30% on the year, above 27,000, while the Nifty has risen above the 8,000 mark.


The non­farm payrolls report is set to be released Friday, an important indicator of economic activity. Even with persistent upheaval in the Middle East, attention will remain focused on Ukraine until a resolution is struck. After its steep drop, gold is consolidating around the psychologically important support level of $1,265; the next few weeks will be telling whether the yellow metal bounces or breaks through lower.

Terrence, Marty, and Everett make up the Content Team at Gainesville Coins, a Leading Gold and Silver distributor. Combining diverse backgrounds and interests in economics, history, anthropology, and geography, the Gainesville Coins Content Team seeks to keep readers informed with current market happenings.

Florida Prepaid College Plan Rates Reduced, Refunds For Many

TALLAHASSEE, Florida -- Florida Governor Rick Scott announced on Thursday that the Florida Prepaid College Fund rates will be reduced by up to 50 percent.  

As a result, approximately 18,000 Florida families who have purchased plans since 2008 will receive reimbursements worth $200 million.

An additional 22,000 Florida families will have their monthly premiums reduced by a combined $700 million because of the lower rates. 

“Reducing Florida Prepaid rates by undoing the previous administration’s tuition hikes was a critical step toward our goal of keeping college affordable," Scott said in a release.  "As I travel throughout our state, parents tell me they want to be able to save for their child’s future and this is another way we’re making higher education more affordable for Florida families. Every child should have the opportunity to earn a degree at an affordable price so they can live their dream.”

The reductions to the Florida Prepaid College Fund rates are possible because of House Bill 851, which passed during the 2014 Legislative Session and was signed by Governor Scott.  The law reduced the maximum annual increase of the tuition differential fee to six percent for pre-eminent State Universities (Florida State University and the University of Florida) and eliminated it for other State Universities. 

The cost of tuition and fees in 2007 was less than $15,000, but skyrocketed to nearly $54,000 in 2014 after several years of double digit increases in the tuition differential fee.  In 2015, with the new law and reductions approved today by the Florida Prepaid Board, the newborn plan cost is anticipated to be $27,000 or less.

Monday, September 1, 2014

Kraft Singles American Cheese Recalled

Americans may want to hold the cheese during their Labor Day cookouts.  That's because Kraft Foods announced that it is voluntarily recalling 7,691 cases of select varieties of regular Kraft American Singles Pasteurized Prepared Cheese Product.

The food giant said that a supplier did not store an ingredient used in this product in accordance with Kraft’s temperature standards. The company said in a release that,while unlikely, this could create conditions that could lead to premature spoilage and/or food borne illness; therefore, Kraft Foods is issuing the recall as a precaution. 

Kraft has had no consumer illness complaints for this product associated with this recall. The affected product is limited to four varieties with “Best When Used By” dates of February 20, 2015, and February 21, 2015.

The affected product was shipped to customers across the United States. It was not distributed outside of the United States.

The following varieties are being recalled: 

Product Size
Name of Product
Best When Used By Code Dates
Package Code
Case Code
12 oz.12 oz Kraft American Singles (16 slices)4820 FEB 2015 and 21 FEB 20150 21000 60464 700 21000 60464 00
16 oz.16 oz Kraft American Singles (24 slices) (36 count case)3620 FEB 20150 21000 61526 100 21000 61450 00
16 oz.16 oz Kraft American Singles (24 slices) (12 count case)1220 FEB 20150 21000 61526 100 21000 61526 00
64 oz.64 oz (4 lb) Kraft American Singles (4x24 slice)820 FEB 20150 21000 63360 900 21000 62559 00

Consumers can find the “Best When Used By” dates on the bottom of the product package. No other Kraft Singles products are impacted by this recall.

The affected product was produced at Kraft’s Springfield, MO manufacturing facility.

Consumers who purchased any of these products should not eat them. They should return them to the store where purchased for an exchange or full refund. Consumers also can contact Kraft Foods Consumer Relations at 1-800-396-5512.

Friday, August 22, 2014

Gold Tumbles Ahead of Janet Yellen Speech

By Terrence Campbell, Marty Menz, and Everett Millman 

The U.S. Dollar continued to climb as the .DXY index, which gauges the strength of the dollar in relation to other currencies, closed above 82 for the first time in 11 months Wednesday. Gold fell nearly $20 Thursday from Wednesday’s PM fix price of $1,295 while platinum and silver maintained their downward trends for the month. Platinum has fallen from nearly $1,500 per ounce a month ago to $1,425. Silver traded under $19.50 per ounce.  Palladium reached $900 per ounce for the first time in over 13 years on Monday, but receded slightly to around World markets were generally up this week, though Hong Kong’s Hang Seng had a shaky Thursday on the heels of a poor Chinese PMI report which indicated Chinese manufacturing may be slowing. Meanwhile, Japan’s Nikkei saw a 3­week high on Thursday as the yen weakened, a boon for exports. German PMI data boosted the DAX, which tracks performance of Germany’s 30 largest companies, though similar data for France showed continued stagnation. The U.K.’s FTSE 100 also had a good week, despite sentiment that the Bank of England will be the first central bank to raise interest rates.

U.S. stock exchanges saw a reversal of previous weeks’ losses this week as the Dow Jones Industrial Average crept upwards, again topping 17,000 on Thursday after a Monday open of 16,664.45. The S&P 500 also saw substantial gains this week, moving upwards from a Monday opening of 1,958.36 to 1,992.37 on Friday, a rise of 1.7 percent. Meanwhile, the Nasdaq continues its climb as it tests territory not seen since the dot­com bubble of the late ‘90s; the Nasdaq sat at 4,532.10 Friday morning after Monday’s open of 4,490.53. It appears the dip stocks experienced a few weeks ago did not initiate the market correction many analysts have been predicting.

The stock market had plenty of positive news to spur trading this week as a number of economic reports further indicated that the U.S. recovery is gaining traction, this rise in markets coming in spite of renewed worries that the Fed will raise interest rates sooner than expected. July housing and labor data, released Thursday, indicated increasing strength in housing sales and continuing job growth. Statements released with the minutes of July’s Federal Reserve meeting and comments made by Kansas City Fed President Esther George to CNBC may indicate an increasingly hawkish attitude towards interest rates.

China Addresses Banking Concerns

This week, China allowed 3 more banks to import gold (including one foreign lender), bringing the national total to 15. China has been gradually liberalizing its regulations on gold over the past 5 years. This development is in lockstep with the expansion of the Shanghai Gold Exchange; as the world’s top producer and demander of the yellow metal, China is attempting to assert a greater influence on its price. Until recently, gold in Far East markets typically traded for a significant premium over the London fix benchmark, making a more local price discovery mechanism increasingly pressing for the Asian market. Even though demand has waned relative to last year’s explosion, China’s behavior regarding gold is a trend worth following, especially with signs of shakiness in the Chinese banking sector.

A LOOK AHEAD: Janet Yellen speaks about the July FOMC meeting minutes on Friday afternoon, while ECB President Mario Draghi also speaks on Friday at a global central bank conference. Both will be watched closely for any further indication that interest rates will be raised more quickly than anticipated­­perhaps as soon as Summer 2015.

Terrence, Marty, and Everett make up the Content Team at Gainesville Coins, a Leading Gold and Silver distributor. Combining diverse backgrounds and interests in economics, history, anthropology, and geography, the Gainesville Coins Content Team seeks to keep readers informed with current market happenings.