The precious metal markets were fairly quiet on Wednesday morning, with spot gold trading essentially flat at $1,330 per ounce. The Platinum Group Metals saw steeper losses, with platinum down 0.9% to $980/oz and palladium off more than 1% to $935/oz. Meantime, spot silver was down almost 10¢ an ounce (-0.45%) to $17.80/oz.
Stocks in the U.S. opened slightly in the red but were returning toward unchanged in early trading. Equities around the globe followed a similar pattern, with mixed results. The dollar was slightly higher on the DXY index but remained near its lows of just 92.0. Treasury yields rose across the board, with the 10-year yield up to 2.17% this morning.
Interestingly, one of the big debates on Wall St right now is the dwindling profitability in the fixed income (i.e. government bond) market. Banks are looking for different areas to grow their business such as consulting, perhaps beginning a paradigm shift in how financial institutions make their money.
Internationally, the ongoing diplomatic crisis in Qatar, the small but wealthy Persian Gulf nation, is growing increasingly perilous. Saudi Arabia and its allies have placed an embargo on Qatar, and are using various forms of diplomatic pressure to try and force the Qataris to break its tacit alliance with Iran. The Saudi coalition has also called for Qatar to disband its main propaganda news arm, Al-Jazeera, which is seen as a highly unlikely development.
The brewing dispute is now growing in intensity, with officials from Iran, Kuwait, and Oman recently joining in a Qatari celebration of the opening of a new port, presumably to work around the embargo from the Arabian Peninsula. Although Qatar gets much of its food, energy, and other resources from its neighbors on the peninsula, it also controls a great deal of wealth that may help the government survive the embargo. The U.S. has tried to straddle both sides of the fence, with mixed messages about the issue coming from the White House and State Department.
At the same time, OPEC is mulling further production cuts in an effort to support higher oil prices. This helped push WTI crude up to $48.75 per barrel on Wednesday.
Meanwhile, gas prices were sharply higher in August, jumping by 10% due to the gas shortages that came with the pair of hurricanes that hit Texas and Florida. More expensive gas lifted wholesale prices and overall inflation during the last month.
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