Morning Market Update: April 8

April 8th, 2013 by

Gold and silver are seeing some light consolidation after Friday’s big jump. Gold has softened to under $1,580/oz and silver is bouncing along the $27.20 level. The unexpectedly weak U.S. jobs data and the surprising size of the quantitative easing program announced by the Bank of Japan combined with a corrective bounce that was already underway on Friday to boost precious metals.

The dollar, which saw selling pressure from Friday’s jobs report, has recovered somewhat. The markets still seem to think that North Korea’s threats are just talk, even if the volume is much louder than recent years. North Korean leadership always pitches a fit every spring during the joint U.S./South Korean military exercises, though the venom in this year’s display has analysts wondering if there is some internal challenge to Kim Il Un’s power, and he is using the occasion of the military exercises to enhance his position.

In other Asian news, the Nikkei stock index once again hit highs not seen in over four years, as the yen weakened to over 99 to the dollar. Gold buying, which had already picked up upon the election of Abe as prime minister, accelerated Friday on news that the quantitative easing program of the Bank of Japan will be twice the size of the current QE by the Fed. Monday gold in Tokyo broke the ¥5,000/gram level.

Chinese stocks slid to a four-month low, with hotels and airlines dropping on continuing fears over a new bird flu outbreak. Real estate-related stocks also declined, on expectations the Chinese government will introduce more regulations on the purchase of investment property.

U.S. stocks opened lower, continuing Friday’s decline. Not only is the weak jobs report weighing on stocks, but some investors are taking profits ahead of upcoming corporate earnings reports.

Euro stocks regained part of the large losses sustained Friday, but were weighed upon in part by the Sentix Euro investor sentiment report. It came in at a depressing -17.3 after a reading of -10.6 in March. Analysts had expected a score of -13.1 for the latest survey.

by David Peterson