Gold sagged slightly overnight in late Asian trading, but picked back up in Europe to start the day in New York moderately higher. Silver opened U.S. trading essentially flat from Thursday’s close. Platinum was up in Asian trading, opening slightly higher in New York, while palladium has held on to yesterday’s gains.
Volume continues to be light across all markets and the summer doldrums set in. Most of Europe will be on multi-week holidays in August, which will extend the period of low volumes.
Stocks opened lower on Wall St. after the Dow and S&P 500 hit new records yesterday. Today’s weak open is attributed mainly to disappointing earnings reports from tech giants Google and Microsoft. The dollar dropped in Asian trading, rallied briefly in Europe, then weakened again. Oil futures hit another 14-month high overnight on expectations of U.S. factory activity increasing.
China announced that it will remove the floor on lending rates for commercial banks, starting tomorrow. Part of Chinese premier Li Keqiang’s push for economic reforms, the measure comes just four months into his term, and shortly after the People’s Bank of China squeezed market liquidity to force major banks out of the grey market economy. Chinese stocks closed down 1.5%, and Hong Kong stocks finished almost flat.
The Nikkei dropped 1.48% ahead of Sunday’s election in Japan, which is widely assumed will result in a consolidation of power for prime minister Abe, easing the way for continued massive quantitative easing. The yen is hovering around 100 to the dollar.
European stocks were down slightly, .34%, in sympathy on the missed earnings by Google and Microsoft.
All markets are vulnerable to swings by large trades, due to the very thin volume. It’s better to think medium- to long- term at this time, instead of short term.