Gold and silver apparently thought Friday’s gain’s were just a warm-up, as gold blasted straight up at the start of trade in Asia and totally ignored the strengthening dollar. This was partially fueled by reports that gold demand in China was up 54%, partially from news that gold ETFs were buying, and partially from rumors the Indian government is going to hike gold import tariffs AGAIN by 2%, to bring the total tax to a whopping 10%.
Reports that national economies are slowing down from Japan, Europe, and the U.S., is dampening fears of a scale-back of the $85 billion a month in bond purchases by the U.S. Federal Reserve that has been anticipated to start in September. Conversely, the dollar is gaining solidly today on expectations that economic news this week will seal the deal and the Fed WILL taper next month. The dollar also saw support on the backs of a weaker yen and euro, and some corrective action after a bad week for the greenback last week.
Stocks in China and Hong Kong were up over 2%, near a two-month high, after good import/export numbers and rumors the central government was preparing another injection of cash into the market. The Nikkei was down 0.7% on news the economy slowed unexpectedly, dropping to near a seven-week low.
Euro stocks benefited from the good news from China, despite news the the Greek economy is continuing to self-destruct at a rapid pace. German officials have already announced their opposition to throwing good German taxpayer money after bad, in an attempt to save the failing Mediterranean nation.
U.S. stocks opened lower, and are still trying to claw their way into positive territory. News of Japan’s slowdown haven’t helped a market suffering from lackluster performance lately, and which is skittish over the Fed tapering its quantitative easing program, which is attributed by many as the major factor in the stock market’s rise.
Gold and silver are holding on to solid gains made overnight, in the fourth day in a row of gains. Precious metals today are emulating the dollar’s movement, when they normally act inversely. This has been attributed to safe haven demand for both gold and the greenback.