Precious Metals Higher in Early Trading

August 21st, 2017 by

The precious metals resumed their climb when markets opened on Monday after heavy profit-taking cut short last week’s rally.

Spot gold rose more than $7 per ounce in early trading to $1,292/oz, while silver prices moved about 15¢ higher to $17.09/oz. Platinum was up 0.7% to $984/oz and palladium gained 1.4% to $927/oz.

Here are the numbers for the metals and Wall St on Friday:

Gold: $1,283.80 (-$3.70, -0.29%)
Silver: $16.94/oz (-7¢, -0.41%)
Platinum: $977/oz (+$4, +0.41%)
Palladium: $914/oz (unchanged)

DJIA: 21,674.51 (-76.22, -0.35%)
S&P 500: 2,425.55 (-4.46, -0.18%)
Nasdaq: 6,216.53 (-5.39, -0.09%)
Dollar Index: 93.42 (-0.34%)

There were reports on Monday morning that the Navy vessel U.S.S. John McCain crashed into an oil tanker off the shores of Singapore overnight. 10 American sailors are reported missing and several others are being treated for injuries. The ship, a Navy destroyer, suffered considerable damage. WTI crude was still off about 10¢ (-0.2%) to $48.40/bbl.

Stocks around the world were mixed on what bullish analysts are describing as a “lazy Monday in August.” Shares of Fiat-Chrysler jumped better than 4% on news that a Chinese firm is interested in purchasing the automaker’s Jeep-Dodge-Ram division. Currently, the largest Western-based car company under Chinese ownership is Volvo.

The dollar was down 0.16% on the DXY index to 93.28 on Monday morning. The greenback ceded some ground to the euro, which is again approaching $1.18, as well as the Japanese yen, which hit a four-month high just under ¥109 per dollar. The 10-year Treasury yield was down 1 basis point to 2.18%.

Janet Yellen

Fed Chair Janet Yellen giving a post-FOMC press conference (photo: Federal Reserve)

In international economic news, the first round of negotiations for amending the North American Free Trade Agreement (NAFTA) have concluded. While no major ground was believed to be broken at the preliminary meeting, the talks will reconvene in Mexico City on September 1st.

Before then, investors will be watching this Friday’s economic policy symposium at Jackson Hole. The retreat in Wyoming is put together each year by the Kansas City Fed. Speakers at this week’s gathering will include Fed Chair Janet Yellen and ECB President Mario Draghi, widely considered the two most influential central bankers in the world. Bloomberg News speculates that one of the topics under discussion at Jackson Hole will be arguments in favor of keeping stimulus measures in place for longer—a common refrain for central banks.

While much attention has been focused on the near-constant shake-up of personnel at the White House since new chief of staff John Kelly has taken over the post, less has been said about how this might alter or affect the administration’s goals and strategies. We may get a more concrete example of that tonight when President Trump addresses the nation in a prime-time speech about the state of U.S. military operations in Afghanistan. The main question about U.S. strategy centers around sending more troops to the country in order to train more special operations forces, though any indications about which way the president might lean on this decision must be taken with a grain of salt. Nonetheless, in 2013, well before his presidential campaign was conceived of, Trump tweeted this about the conflict in Afghanistan:

The lingering tensions with North Korea also remain on the administration’s docket. War games exercises, which the U.S. has jointly run with South Korean forces twice per year since the 1970s, are scheduled to take place soon as well. This invariably draws condemnation from the DPRK, though the Kim regime has backed off its threat to fire missiles at Guam. Much of the international community is seeking a “freeze-for-freeze” compromise between the two sides wherein the U.S. freezes its military exercises in exchange for North Korea freezing its nuclear program; however, diplomats for both South Korea and the U.S. have rejected the idea on the grounds this suggests a false equivalence between the two sides.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.