Israel strikes Syria, Says targeting Hezbollah arms...

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Israeli jets bombed Syria on Sunday, rocking Damascus for hours and sending pillars of flame into the night sky in what a Western source called a new strike on Iranian missiles bound for Lebanon's Hezbollah.

Local people reported massive explosions and internet video showed the capital's skyline lit by flashes; Syrian opponents of President Bashar al-Assad rejoiced at Israel's third raid this year, and second in 48 hours, while anger in Tehran highlighted how Syria's civil war risks spinning further beyond its borders.

Israel, while declining to confirm the strike, stressed its focus was to deny its Lebanese foes new Iranian firepower and not take sides between Assad, long seen as a toothless adversary, and rebels who have won sympathy from Israel's Western allies but who also include al Qaeda Islamists hostile to the Jewish state.It appears to calculate that Assad will not risk forces he needs to fight the rebels by attacking a much stronger Israel.

Syrian state television said the bombing around a military research facility at Jamraya caused "many civilian casualties and widespread damage" and quoted a letter from the foreign minister to the United Nations saying: "The blatant Israeli aggression has the aim to provide direct military support to the terrorist groups after they failed to control territory."

People living near the Jamraya base spoke of explosions over several hours in various places near Damascus, including a town housing senior officials: "Night turned into day," one man told Reuters from his home near Jamraya, also struck on January 30.

CNN quoted Syrian Deputy Foreign Minister Faisal al-Mekdad calling Sunday's attack a "declaration of war", and the Iranian foreign minister urged countries to resist Israel. But a senior Iranian commander also said Syria was strong enough to defend itself without Tehran's help - though he also offered training.

ROCKETS TARGETED

A confidant of Israeli Prime Minister Benjamin Netanyahu said Israel hoped that by not confirming its attack, it would not force its enemies into serious retaliation. There was little response from Hezbollah, Syria or Iran to an earlier attack on the Jamraya compound, near the Lebanese border, on January 30.
After an Israeli strike on Friday, U.S. President Barack Obama defended Israel's right to defend itself from Hezbollah, which fired many rockets into Israel during a war in 2006.

A Western intelligence source told Reuters: "In last night's attack, as in the previous one, what was attacked were stores of Fateh-110 missiles that were in transit from Iran to Hezbollah."
Hezbollah in Lebanon declined immediate comment. Iran denied that the attack was on armaments bound for Lebanon.

Israel has long sought to block Hezbollah's land, sea and air transport from Iran and frets such new missiles could give the Shi'ite militants, who share in Lebanon's government, the ability to strike its Tel Aviv conurbation with some accuracy.

Netanyahu's colleague, Tzachi Hanegbi, noted Obama's reluctant to heed calls for U.S. military backing for the rebels despite Assad's forces alleged use of poison gas.Given the confusion among world powers, he added, Israel was only trying to protect its own interests and saw little to be gained by trying to influence the outcome of Syria's civil war.

"The world is helplessly looking at events in Syria," he told Army Radio. "That is why, as in the past, we are left with our own interests, protecting them with determination - and without getting too involved."

It was unclear whether Israel sought U.S. approval for the action; in the past, officials have indicated that Israel sees a need only to inform Washington once such a mission is under way.
Netanyahu and Obama have had a fraught relationship in past years, as Washington seeks to hold Israel back from any attack on Iran's nuclear program while diplomatic moves continue.
At a routine public appearance on Sunday, Netanyahu made no direct reference to the strikes in Syria but spoke pointedly of his responsibility to ensure Israel's future.

He maintained a plan to fly to China later in the day, suggesting he did not expect a major escalation. However, a military source said the army had deployed more anti-missile defense systems near the northern borders in recent days.

NIGHT OF EXPLOSIONS

Video footage uploaded onto the Internet by Syrian activists showed a series of blasts. One lit up the skyline of Damascus, while another sent up a tower of flames and secondary blasts.
Syrian state news agency SANA said Israeli aircraft struck in three places: northeast of Jamraya; the town of Maysaloun on the Lebanese border; and the nearby Dimas air base.

"The sky was red all night. We didn't sleep a single second. The explosions started after midnight and continued through the night," one man told Reuters from Hameh, close to Jamraya.
"There were explosions on all sides of my house," he added, saying people hid in basements during the events. In the center of Damascus, people at first thought there was an earthquake.

Hezbollah's Al-Manar television aired footage showing a flattened building spread over the size of a soocer field, with smoke rising from rubble containing shell fragments. It did not identify where the film was shot.The streets of central Damascus were almost empty of pedestrians and traffic on Sunday morning, the start of the working week. Checkpoints that have protected the area from rebel attack appeared to have been reinforced.

Some opposition activists said they were glad strikes may weaken Assad, even if few Syrians have any liking for Israel."We don't care who did it," said Rania al-Midania in Damascus. "We care that those weapons are no longer there to kill us."

But in Israel, Netanyahu ally Hanegbi spoke of relative indifference in its attitude to the rebels and Assad, who had maintained a standoff with Israel that dated from the time of his father, who led Syria in its last war with its neighbor in 1973: "We have no interest because we have no ability to assess what is good for us regarding the future regime," Hanegbi said.

Netanyahu appeared at the dedication of a highway junction in memory of his late father. He made no reference to raids but said his father "taught me that the greatest responsibility we have is to ensure Israel's security and guarantee its future".

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News Source: www.reuters.com

Fed keeps policy unchanged; says it could increase or reduce bond buying...

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The Federal Reserve decided to keep the rate for federal funds at a record low range of 0-0.25% to support the economic recovery. The Committee also voted to maintain the Fed's assts purchases at $85 billion per month and signaled it is prepared to either "increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes".

The Federal Reserve continues to anticipate that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6.5% and inflation between one and two years ahead is projected to be no more than a half percentage point above the 2% target.

In its policy statement released Wednesday, the FOMC said it continues to see downside risks to the economic outlook.

Regarding the timing to remove policy accommodation, the Fed will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. "When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent".

Voting against the action was Kansas City Fed President Esther George, who was concerned that the "continued high level of monetary accommodation increased the risks of future economic and financial imbalances" and could push long-term inflation expectations higher.

The minutes of this 2-day meeting will be released on May 22.

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News Source: www.cnbc.com

Gold Market To Focus On Central Bank Meetings, Jobs Report, Physical Demand...

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Gold traders will have plenty on their plate next week with central-bank meetings and an always-important U.S. employment report, while also continuing to keep tabs on the strength of demand in the physical market.

The U.S. Federal Open Market Committee and European Central Bank meet. And, as always, traders will be watching economic data to see whether conditions are improving or deteriorating so they can gauge for themselves what officials may do with monetary policy down the road.

Traders also will keep monitoring reports about the voracious physical buying that was unleashed by a sharp price decline in mid-April. Some analysts have described this as pent-up demand in which buyers pounced when presented with lower prices. This helped gold price rise for the week.

“The key for me is I want to see on these accelerated prices if that physical buying is going to continue, or if it’s price sensitive and is going to subside,” said Kevin Grady, president of Phoenix Futures and Options.

June gold finished with a gain for the week of $58, or 4.2%, to $1,453.60 an ounce on the Comex division of the New York Mercantile Exchange, helped by bargain hunting, particularly as the market took notice of the strong physical buying. The technical-chart posture also improved. In fact, the June contract has now risen in seven of the nine sessions since the historic sell-off of more than $200 an ounce earlier this month. May silver gained 79.8 cents for the week, or 3.5%, to settle at $23.758.
In the weekly Kitco News Gold Survey, out of 35 participants, 24 responded this week. Fourteen see prices up, while eight see prices down, and two see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

The FOMC meets on Tuesday and Wednesday. When gold first faltered early in the year, improving economic conditions had many financial-market participants thinking about an eventual FOMC withdrawal of the bond-buying program meant to push down long-term interest rates, referred to as quantitative easing. But much of the economic data for March was softer than expected, which, if it continues, likely would mean increased expectations for continued QE.

The soft March U.S. data included a rise of just 88,000 in non-farm payrolls and 0.4% decline in retail sales. A report on Friday showed the U.S. economy grew 2.5% in the first quarter, below forecasts mostly around 2.9% to 3%.

Traders will find on May 3 out if the labor market has picked up, when the Labor Department releases the April report. Consensus forecasts call for a rise of around 160,000 to 166,000 in non-farm payrolls, with the jobless rate expected to remain at 7.6%.

“The last time, we expected 195,000 new jobs and it was only 88,000,” Grady said. “So the jobs number is going to be paramount.”Some of the other key U.S. economic indicators next week include personal income and spending Monday, Chicago Purchasing Managers Index and consumer confidence on Tuesday, ADP private-sector employment report and Institute for Supply Management manufacturing PMI Wednesday, and initial jobless claims Thursday.

Meanwhile, the European Central Bank’s governing council meets Thursday. Recently disappointing economic news in the 17-nation eurozone fueled expectations that the bank may cut interest rates further from the record low of 0.75%. If so, this could pressure the euro, which could impact gold due to its inverse correlation with the U.S. dollar.

“After the disappointing string of economic data over the past couple of weeks, the conditions set out by the ECB for a further easing in rates have likely been fulfilled,” said Alex Thorndike, senior trader for precious metals and foreign exchange with MKS Capital. “Many economists have now changed their tune from earlier in the year expecting a 25(-basis-point) cut in the main refinancing rate at the May meeting, but no change to the deposit rate.”

Meanwhile, traders will also keep tabs on the physical market. Demand for coins and bars worldwide has soared since the mid-April price plunge, which has helped unleash demand, a number of analysts have said. U.S. Mint gold bullion coin sales have hit 203,500 so far in April, the most of any month since December 2009.

“The reaction of the people (to the gold sell-off) was to start buying,” said Chris Blasi, CEO of Neptune Global Holdings. “The fundamentals of gold and silver haven’t changed. The global economy is still weak; banks are still printing money. The break gave people a chance to add to their positions. Now as gold climbs, you might start to see the momentum traders come in, which helps gold go higher.
“If we see a pullback, people who were buying before might come back in and buy again to buy it cheaper.

The only thing that might be not so good for gold is if prices went flat. There are some people…who are waiting for a pullback. They’ve put half their money in, but are holding back for a $25, $30, $50 break. If we do pull back to the lows from last Tuesday (the $1,321 area), it’s going to be less shocking. When prices fell as hard as they did at the time, it was shocking.”
The mid-April price decline also came at a key period for seasonal demand due to spring weddings in India, as well as the May 13 Akshaya Tritiya festival, auspicious for gold buying. Buying surged there and in other emerging-market nations.

However, some observers also caution that a three-day holiday in China next week could at least temporarily curb some of the global buying. China is the world’s second-largest consuming nation, behind India, according to World Gold Council data.

“What I would be a little wary of is when they do go on holiday, a significant amount of demand will be pulled from the market and could induce bigger players to step in and sell,” Thorndike said. “Without the cushion of SGE (Shanghai Gold Exchange)/Chinese demand, we could swoop lower.”
Traders will also look closely at the most recent release of the Commodity Futures Trading Commission’s weekly commitments of traders data, said Bob Haberkorn, senior commodities broker with RJO Futures. The report is released late on Fridays and shows how speculators are positioned as of the previous Tuesday. Should the data show fresh buyers returning to the market, this would be a bullish sign, he said.

“Are there new longs coming into the market?” he asked rhetorically. “Is this (recent rally) a short-covering move? It could be a combination of both.”As always, technically oriented factors could accelerate any moves.

"I think we're going to consolidate next week,” said Charles Nedoss, senior market strategist with Kingsview Financial. “It closed nicely over the 10-day (moving average) and consolidated there. It got a little ahead of itself at the 20-day (moving average).”
As of the Comex pit-session close, the 10-day average for June gold stood at $1,408.90 an ounce, while the 20-day was at $1,486.60.

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News Source: www.cnbc.com

Chemical Weapons In Syria Push Up Crude Oil Prices...

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WTI crude oil futures were trading slightly higher tracking a similar movement in benchmark NYMEX contracts. The US dollar has fallen from its highs in the low 83.00 price range to trade at 82.72 this morning, making dollar denominated commodities like crude oil cheaper. In the international market, crude oil futures edged higher due to a weak dollar against the euro and lower than-expected rise in the US crude oil stocks.

US crude oil inventory rose by 900,000 barrels from the previous week to 388.6 mln barrels in the week ended Apr 19, against market projection of 1.2 mln barrels rise. Crude is trading at 93.20 giving back 43 cents as traders took advantage of the climb over 93.00 to book profits.

Crude oil prices settled at two-week highs on concerns over tightening supplies, while U.S. gasoline demand heats up ahead of the peak spring-summer driving season. Traders said weakness in the dollar, rising equities prices and news that U.S. weekly claims for jobless benefits fell to the lowest level in nearly five years added to buying interest. Data showed a sharp fall in the U.S. jobless claims last week. The initial claims for jobless benefits was 339,000 in the week ending April 20, down16,000 from the revised figure of 355,000 in the previous week, the U.S. Labor Department reported yesterday. Meanwhile, the four-week moving average, which helps smooth out week-to-week volatility, edged down to 357,500 from 362,000 in the previous week. Recent job data signaled an improving labor market, but still not strong enough to significantly cut the unemployment. The U.S. unemployment rate dropped to 7.6% in March.

Prices also got support from the reports over Syria’s possible use of chemical weapons stirred concerns over stability in the Gulf region. Oil prices jumped after the United States said Syrian government forces had likely used chemical weapons, raising worries that Washington would punish Damascus militarily. US officials said cautiously for the first time that they had evidence of the use of chemical weapons by the Syrian regime. This report was supported independently by France and Israel.
They stressed there was still not full agreement on the issue in the US intelligence community, but US Defense Secretary Chuck Hagel, speaking in Abu Dhabi, warned that use of such weapons “violates every convention of warfare.”

The report raised fears that Washington could intervene more deeply in the Syrian conflict, after having warned earlier that using such weapons would cross a “red line” in President Bashar al-Assad’s fight with rebels. A senior White House official said “all options are on the table” should use of the weapons be confirmed, a euphemism for military options being taken into consideration. But a US defense official stressed that a military intervention was not imminent.

Implied demand for gasoline–the most widely used petroleum product in the world’s biggest oil consumer–climbed to its highest level since November last week, U.S. government data showed. Gasoline stockpiles logged their biggest drop in a year, breathing new life into futures contracts that fell to a four-month low in recent days.

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News Source: www.marketwatch.com