News that regular Russian Army troops have invaded eastern Ukraine have sent global stocks plummeting, and investors rushing into safe haven assets. NATO confirms that at least 1,000 soldiers of the Russian Army, backed by tanks, artillery, and advanced anti-aircraft missile batteries have begun an offensive in Ukraine.
Gold gained steadily overnight, until a blip upward at the New York open broke the $1295 level and triggered a tiny bit of profit-taking. Silver saw a big rally in Asia of about 40 cents, before easing slightly. Platinum broke out of an unbelievably tight rang it has held for days, late in Asian trading. to gain $10 an ounce. Palladium continues its measured gains, up six dollars in New York.
10am spot prices are gold: $1,291 (+.65%), silver $19.63 (+1.0%), platinum $1,432 (+.78%), and palladium $894 (+.79%)
German bond yields are seeing record lows as money flees the stock market. The yen and Swiss franc are seeing safe haven buying as well, while the dollar recovers from an overnight drop. The Russian ruble has plummeted to a six-month low, as stocks in Moscow lose over 3%.
Precious metals are up slightly on bargain hunting, a day after the S&P 500 stock index closed above 2,000 for the first time. Wall St. opened barely above unchanged this morning, and promptly dipped into the red. This is probably profit-taking before the end of the month.
Gold saw a little bit more physical demand in Asia, and carried that strength into European trading. With European bond yields at record lows and economic fears growing, the opportunity cost for adding gold to an EU portfolio are very low.
Silver is showing more volatile trading in Asia and Europe than it is in the U.S., due to the thin markets. Platinum and palladium are up modestly, as recent softness has presented some buying opportunities. UBS notes that recent softness is the result of outflows from PGM ETFs, which had seen remarkable inflows earlier this year. This is likely profit-taking, since the fundamentals underpinning the market haven’t changed, and palladium has gained over 22% for the year.
Gold is being helped this morning by a softer dollar. The DXY dollar index is still above 82.5, however, holding on to much of the recent rally. This may just be some consolidation. Oil is still trading in a tight range, despite the increase in fighting around the oil ports of Libya, a major exporter to Europe.
Gold saw a sharp rebound over $1,290 in Asian trading overnight, as safe haven demand and profit-taking resulted in some covering of short positions. Silver gained modestly overnight, holding the gains into the New York open where it saw a short-term spike before easing slightly.
Platinum also gained modestly in Asia, showing some volatility due to the thin markets affecting all sectors during summer vacation. Palladium, which briefly touched a $895 high yesterday before closing at $888, is trading near unchanged.
Thin volumes are affecting all markets — equities, commodities, metals. Nanex reported that the volume on the New York Stock Exchange yesterday was the lowest non-holiday volume since October 2006, so take any big movements in any market for the next week or so with a grain of salt.
Gold is down only slightly this morning, after a dip at the Asian open. Silver is unchanged after recovering from mild softness overnight, while platinum and palladium are also down slightly.
European stocks are up, despite unimpressive economic news, on dreams of Quantitative Easing from the European Central Bank.
ECB president Mario Draghi’s speech at the global central banker conference in Jackson Hole, WY, urged the governments of the European nations to institute measures to boost economic growth. He said that the ECB would be reversing policy to aim for economic stimulus instead of austerity measures.
Gold closed down 1% yesterday as the dollar continues a strong rally and the S&P 500 edged up 5 points to set a new record. Most of these “new records” on the stock market have been on gains of under 10 points, and often under 5 points.
Overnight, gold almost exactly retraced the previous day’s movement in Europe overnight, but saw a smaller dip than yesterday at the COMEX open, to trade slightly higher this morning in New York. Platinum also tightly retraced the previous day’s market action in Europe.
Silver gained overnight, to ease slightly in New York to trade nearly unchanged. Palladium is slightly higher after recent selling pressure.
Gold, which was already under pressure from a hawkish outlook by the Fed regarding the timing of interest rate hikes, was pushed down another $5 an ounce to test the $1,275 level upon a better than expected first-time jobless claims report.
The ranks of the newly-unemployed rose only 298,000 last week, 14,000 fewer than expected. Since the Fed’s last remaining goal before reversing an unprecedented six years of near-zero interest rate policy is an improving labor market, traders and speculators are getting the jitters about the end of the party coming sooner than later.
Stock markets in Europe and the U.S. are down, after the minutes from last month’s Bank of England policy meeting revealed that two of the nine members voted for an interest rate increase to start this month.
Analysts now believe that the UK will certainly be the first major economy to raise benchmark interest rates, which may put more pressure on (or give an excuse for) the Fed to follow suit.
This news puts more attention, if that’s possible, on the release of the Federal Reserve Open Market Committee minutes from last month’s meeting, due to be released this afternoon.
Both Fed Chairman Janet Yellen and European Central Bank president Mario Draghi will be speaking at the global central bankers’ conference in Jackson Hole Wyoming on Friday.
Gold eased back to unchanged from yesterday’s 1297 close after slight gains overnight, due to a lower than expected increase in the U.S. Consumer Price Index. The CPI for July rose only 0.1%, compared to 0.3% for June, easing fears in the stock market of an early hike in benchmark interest rates by the Federal Reserve.
Housing starts jumped 15.7% in July, to the highest level in six months, causing Home Depot to raise earnings forecasts. The dollar gained modestly on the news, as the euro declined.
Gold is trading in a narrow $5 range, sliding on economic news in New York, then attracting bargain hunters and physical demand overnight. Silver is trading unchanged today, in volatile action due to the light volumes that are normal for this time of year. Platinum is easing this morning after slight gains overnight, while palladium is inching upward over $890 again, perhaps for another run at the $900 mark. Palladium is up over 24% for the year, handily beating the stock market.