Morning Market Update: April 3

April 3rd, 2013 by

Gold is steadying, using support of disappointing jobs data in the U.S. after hitting a 4-week low overnight. Silver hit an 8-month low in Asian trading before recovering, but is still flirting with the $27 level.

The ADP private sector jobs report showed a growth of 158,000 jobs, worse than expected. The ISM service sector index also came in lower than predicted, at 54.4% versus an expected 55.8%. This is a decline from February’s 56%. Both stocks and the dollar are weaker in New York on the news. We are also seeing some profit taking in the dollar. Oil is also lower, over news of growing reserves.  Volume on Wall St. is expected to be light ahead of the Friday’s non-farm payroll report.

Volume in Europe was also light, as investors await tomorrow’s ECB meeting. Euro stocks took a breather today after large gains yesterday. The eurozone composite inflation index rose at an annualized 1.7% rate, the slowest rise in almost two years. Cyrpus received another loan for € 1 billion from the IMF, for their attempt to restructure their broken banking sector.  German bund yields are still low, as safe haven demand over possible “bail ins” for other troubled southern European nations remains a concern.

In Asia, physical demand for gold is robust, as buyers buy the dip. The Nikkei had its largest gain in two months on expected new monetary easing measures from the Bank of Japan, which meets tomorrow. Hong Kong and Chinese stocks slid on light volume ahead of the two-day Qingming Festival holiday that starts in China tomorrow.

by David Peterson