Morning Market Update May 8

May 8th, 2013 by

Gold is up $14.70 to $1,467.30/oz at 10 AM in New York, as positive industrial news from China and Germany boosted raw commodities, and gold hitched a ride. This triggered short covering in Europe, lending a bit more support.

The dollar is weaker this morning against a basket of currencies, which is positive for precious metals, while the euro gained a bit. Crude oil is slightly weaker, a minor bearish influence on PMs.

China reported stronger than expected imports and exports, which led to a trade surplus of $18.2 billion in April, $1.5 billion more than expected. This boosted stocks across Asia. However, several analysts in the West are looking askance at the export numbers, noting decreased exports to the U.S. and Europe. It is suspected that some companies are reporting false exports to hide the inflow of speculative capital into China. Government officials have pledged to investigate, in response to skepticism over the numbers. The Nikkei hit a 5-year high overnight as the Bank of Japan continues the boldest quantitative easing operation in the world.

In Europe, German industrial production, which was expected to drop slightly, instead posted a 1.2% increase. this boosted European stocks and the euro currency.

In the U.S. Wall St. opened lower on profit taking after the Dow and S&P 500 set all-time records in trading yesterday.

by David Peterson