Precious metals drifted downward overnight to star the week, with nothing major providing a steering pattern one way or the other. Gold and silver saw a snap sell-off that lasted but a minute before both resumed their previous levels. The PGMs are slightly lower, despite projections of a shortage of both platinum and palladium next year, due to recovering Euro auto sales, and tighter emissions standards in China.
Weakness in the dollar is helping PMs, as the greenback flirts with a one-week low. The euro is back over 1.35 on news over the weekend that Silvio Berlusconi’s center-right political party has fractured, removing the media magnate billionaire’s ability to bring down the government if he is stripped of his Senate seat over his tax fraud conviction. This gave a big boost to Italian stocks and bonds, and helped lift Eurozone stock indexes.
The details of the major economic reforms proposed by the Chinese Communist Party were released over the weekend, sending Asian stocks ex-Japan higher. In Tokyo, the Nikkei was down slightly on profit-taking on recently soaring stocks.
Wall St. opened higher, after the S&P 500 and Dow both closed at record highs Friday, capping six straight weeks of gains. The markets are looking ahead to Wednesday’s release of the minutes of the October Federal Reserve Open Market Committee meeting. If the market gets spooked over internal taper talk at the Fed, expect the dollar to profit from it.
Precious metals remain stuck in a range, and seem resistant to either positive or negative news. Gold is treating $1,270 and $1,295 as the limits refusing to move past either one. The upside has been limited by a forced reduction in Indian gold demand by the government, using import restrictions and high tariffs. It remains to be seen if the public will take out its frustrations on the government at the election booth next spring.