Gold and silver saw a moderate drop in Europe overnight, before regaining their footing in New York. Platinum was down slightly from Friday’s close at the COMEX open, while palladium is recovering from Friday’s drop. Palladium has been the best performing of the precious metals this year.
The dollar is weaker this morning against the euro, pound, and yen, while oil is finding strength from a breakdown in negotiations between the Libyan government and a major tribal militia leader, which has blocked oil-exporting terminals in eastern and central Libyan ports since July.
Euro stocks saw gains on news that the Markit manufacturing output report jumped from 51.6 to 52.7. Analysts had predicted a modest gain to 51.9. This is a 31-month high in industrial output for the EU, led of course by Germany. France reported a contraction in output, dragging the number lower, and emphasizing how uneven the economic recovery in Europe is.
In contrast, Asian shares were down as manufacturing output in China was reported to have unexpectedly dropped. The HSBC flash manufacturing report shows a drop to 50.5 from 50.8, against expectations of a slight rise to 50.9. This puts Chinese industrial output at a 3-month low.
Wall St. opened in the green and started higher, as US industrial output was reported this morning to have risen 1.1%. This was fueled by a huge 3.9% increase in utilities, as Americans turned up the thermostat during several severe winter storms.
This is the last full trading week of the year, so expect a lot of shuffling of accounts as traders book profits and companies square their books. All eyes are of course on Santa Ben, as the Federal Reserve Open Market Committee begins its last meeting of the year tomorrow, and the last under Chairman Ben Bernanke. The answer to the “taper or not” question, at least for this month, may hinge on inflation numbers reported tomorrow.