Gold saw moderate pressure overnight, as an overdue technical correction combined with some profit-taking, but has recovered in morning trading in New York. Part of the softness overnight was due to reduced physical demand out of China, as gold has risen nearly $50 this month. Gold is holding above both the 100-day and 50-day moving averages, making a short-term bullish trend.
The dollar and crude oil are both struggling to recover from multi-month lows, with the dollar still close to a nearly two-year low versus the euro. Consumer confidence in the U.S. recorded an eight-month low, and core durable goods orders fell again, for the second time in three months. Total durable goods orders counting transportation and military were up, thanks to large orders for Boeing’s airliners.
Global markets are still digesting yesterday’s news as well. The prospect of a tightening money supply in China, combined with a greatly weaker dollar making the yen and renminbi stronger, are weighing on Asian stock markets. Euro stock markets had a little shock when the German Ifo consumer confidence fell unexpectedly- the first drop in six months. The euro is off 23-month highs, but still above $1.37.
After the Federal Reserve Open Market Committee shocked everyone in September by not tapering their $85 billion a month quantitative easing program, no-one is taking anything for granted concerning next week’s meeting. We may see some end-of-month book squaring and positioning leading into the weekend.
While gold is rebounding to yesterday’s levels, silver saw stronger selling pressure overnight and trading moderately lower. Platinum is follow gold’s rebound, while palladium is lagging after early morning selling.