Thursday saw the selloff from the precious metals market continue, sending gold prices lower to threaten the next key support level at $1,200/oz. Spot gold was about 0.3% lower this morning at $1,205/oz. Spot silver was down 0.45%, falling below $17.20/oz.
Platinum and palladium were also both lower, with the latter tumbling roughly 2%.
Interestingly, the U.S. dollar also lost ground in early trading, which helped stem some of the losses for gold and silver. The USD traded about 0.2% lower against its major peers on the DXY index, settling around 101.9. After a relatively uneventful week, equities in the U.S. were higher on Thursday. Before trending back toward unchanged, the S&P 500 and the Nasdaq were each up about 0.25% while the Dow Jones lagged slightly behind.
Much of the focus on Thursday was on Europe and the ECB. The central bank is still struggling to keep the monetary union together amid political challenges from an increasingly strong populist movement across the continent (and much of the world, for that matter). The public in Europe has grown unhappy with the leadership in Brussels, and a number of movements have sprung up that support individual European nations’ efforts to reclaim sovereignty from the supranational EU. This is most clearly being seen in places like France, the Netherlands, and Italy but continues to spread.
Amid all of this upheaval, ECB President Mario Draghi attempted to reassure the markets this morning by claiming that the “euro is here to stay.” The common currency is perhaps the most prominent symbol (and policy) of the wuthering pan-European project. Draghi announced that the bank was leaving rates unchanged at 0%, choosing to continue leaning toward more accommodation through the end of the year rather than removing such stimulus. The hope is that this spurs greater inflation in the eurozone, where commodity prices have actually been falling. Ultimately, however, observers took Draghi’s words as a sign that the central bank will be slightly more hawkish at its next gathering.
Stocks were mixed in both Europe and Asia. The oil market got a dose of reality on Thursday as concerns about an ongoing supply glut in global crude stockpiles sent prices sharply lower. Data has shown record-high oil inventories in the U.S. even while OPEC members and a few other select countries have jointly agreed to curb their output. Amid the highest trading volumes of 2017, crude oil prices sank as much as 5% between last night and this morning, sending April’s WTI crude contract below $50 per barrel. Brent crude for May delivery stood just below $52.50/bbl this morning.
Other U.S. Economic News
U.S. markets mostly shrugged off the news that weekly jobless claims rose by 20,000 last week, maintaining its mind-boggling streak of sub-300,000 new unemployment claims being filed. This was countered by the fact that layoffs were 19% lower in February compared to January, showing that companies are retaining staff now that seasonal employment for the winter holidays has largely run its course.
A separate report from Bloomberg revealed that consumer comfort, a measure of Americans’ confidence in the economy and current business climate, has reached its highest level in a decade. Several other measures of consumer confidence were at their highest in 15 years.
Traders and investors will certainly be watching tomorrow’s nonfarm payrolls (NFP) report, the last big economic data to be released before next week’s FOMC meeting where the Fed is widely expected to raise interest rates another quarter-percent.
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