Gold shot upward to peak at $1.321.80 on the London open overnight, after fading slightly in Asia. German factory orders blew away expectations, printing a 3.3% gain, when only a 0.5% gain was anticipated. This lifted the euro off 7-week lows, and reduced expectations that the European Central Bank would cut rates at tomorrow’s meeting.
Silver and the PGMs rode the wave higher in Europe as well. There was some profit taking in early New York trading for gold and silver, but platinum and palladium both have held onto gains.
The dollar is seeing pressure today, not only from the euro but also a British pound that has gained for three straight sessions on cheerful economic news. Also weighing on the dollar is information out of the Fed yesterday. A report was released making the case that an increase in quantitative easing was possible, and a Fed official opined to the public that it may be preferable to wait until more substantive evidence that the economy could withstand a tapering of the $85 billion a month in bond and mortgage-backed securities purchases that comprise the Fed’s stimulus program.
In Asia, the Nikkei was up 0.8% on profit forecasts by Toyota, and the recovery of some of the companies punished in the market lately. Hong Kong and Chinese stocks are lying low, waiting on the Chinese Communist Party policy meeting this weekend. Likewise, U.S. and European markets are mostly on the sidelines as the ECB and Bank of England meet tomorrow, and the important U.S. non-farm payrolls report is due on Friday.
In mid-morning trading in New York, gold is trending above yesterday’s levels, and near Monday’s levels. Silver is trading at a high for the week, just above Monday’s levels, and the PGMs are both posting solid gains. Labor unrest in South African platinum mines, and concerns over Russian palladium exports are supporting those metals.