MKS PAMP Group - Daily Asia Wrap

Range Asian Hours (from Globex open)
|--------------+--------------+--------------+--------------+--------------|
|              |     GOLD     |    SILVER    |   PLATINUM   |  PALLADIUM   |
|--------------+--------------+--------------+--------------+--------------|
|     OPEN     |  1269.20/70  |   17.68/71   |    944/47    |    636/39    |
|--------------+--------------+--------------+--------------+--------------|
|     HIGH     |  1273.00/50  |   17.73/76   |    946/49    |    640/43    |
|--------------+--------------+--------------+--------------+--------------|
|     LOW      |  1268.30/80  |   17.64/67   |    941/44    |    636/39    |
|--------------+--------------+--------------+--------------+--------------|
|  LAST LEVEL  |  1270.20/70  |   17.66/69   |    945/48    |    639/42    |
|--------------+--------------+--------------+--------------+--------------|




MACRO: The U.S. Federal Reserve's Beige Book released overnight showed the
economy continued expand over the period from late August to early October.
Most districts reported modest or moderate growth amid tight labor markets
and steady wage gains, while outlooks were mostly positive. Housing starts
in the U.S. fell to an 18-month low during September, decreasing -9.0% MoM
(exp: +2.9%) from -5.6% previously. The print took the annual rate to 1.047
million (exp: 1.175 million) from 1.150 million previously as starts for
multi-family homes plunged -38% MoM, while starts to single family homes
helped to offset some of this weakness with a +8.1% MoM increase. Meanwhile
building permits increased +6.3% MoM (exp: +1.1%) from an upwardly revised
+0.7% (prev: -0.4%). Equity markets in the U.S. were led higher overnight
by a stronger oil price and better than expected results from
Morgan-Stanley. The DJIA added +0.22% to end the session at 18,202.62
points, while an oil driven jump to energy stocks (+1.36%) saw the S&P 500
finish +0.22% higher at 2,144.29 points. Britain's unemployment rate held
steady at an 11-year low of 4.9% in the three months to the end of August,
with a further 106,000 people in the workforce to see the employment rate
at 74.5%, the equal highest since records began in 1971. Wage growth eased
marginally over the period to +2.3% (exp: +2.3%) from an upwardly revised
+2.4% previously. U.K. equities (+0.31%) pushed higher overnight, buoyed by
gains to energy companies on the back of stronger oil prices, while the
FTSEurofirst 300 ended +0.32% higher and the German Dax added +0.13%. Crude
oil futures surged to a 15-month high on Wednesday following Saudi Arabia's
energy minister warning of an impending petroleum shortage. WTI added just
over +2.5%, receiving a further boost during New York hours following an
Energy Information Administration report noting U.S. crude supplies fell by
5.2 million barrels in the week ended October 14.


PRECIOUS: A recovering USD in New York put the brakes on a strong session
for gold overnight, as the metal ripped through the 200 DMA in London for a
+0.6% gain. A mild bid tone out of China supported the yellow metal during
Asian hours on Wednesday, however offers toward USD $1,265 capped further
gains leading into London. The metal held support at USD $1,260 in early
European trade, before USD weakness provided support for a push through the
200 DMA at USD $1,267.90 on the way to a USD $1,273.15 high amid softening
UST yields. A mild late session pullback saw gold end the session around
USD $1,270, importantly holding above the 200 DMA. Silver was back to its
volatile best overnight, pushing higher with gold during London hours,
before being unceremoniously dumped in New York from a high of USD $17.77
to USD $17.56 in just over two hours. Bargain hunters restricted further
down-side moves, taking the grey metal back above USD $17.70 before
softening into the close to end modestly higher on the day. Price action
for the white metals was mixed as platinum once again found offers above
USD $950, while palladium was friendless in New York, paring Asian/London
gains to end flat for the session.


ASIA TODAY: Further Chinese interest pushed gold higher during Asian trade
today, seeing the metal buoyant above the 200 DMA, however unable to make
headway above the overnight high. Muted early session interest gave way to
a solid bid tone out of Shanghai, dragging the yellow metal off the session
low as the onshore premium continued to trade above USD $4 relative to loco
London bullion. Afternoon pricing saw some of the shine taken off the
earlier move higher, with gold easing back toward USD $1,270, albeit
continuing to see interest amid a recovering USD. The yellow metal will be
looking toward support broadly between USD $1,265 - $1,267.90 (200 DMA) for
an extension to USD $1,277 to break above the 200 week moving average and
the 50% retracement of the October move. Physical interest out of India has
seen local pricing move into a premium in recent days to add further
support to bullion, while ETF flows continue to be buoyant. Silver price
action was relatively muted today, with the metal trading a few cents
either side of USD $17.70 through the session, while the white metals saw
modest interest support them higher. All eyes tonight on the ECB, while out
of the U.K. we see Retail Sales and out of the U.S. there are Initial
Jobless Claims, the Philadelphia Fed Business Outlook, Consumer Confidence,
Existing Home Sales and the Leading Index.