After gaining three days straight, gold saw profit-taking in Asia and Europe, and is moderately lower in New York despite a late drop in the dollar. With volumes as thin as these, any decently-sized trade makes the numbers move.
Silver saw a spike in midday trading in Europe, but couldn’t hold onto the gains, dropping back down to previous levels. Platinum, which had seen its biggest jump in ten weeks on Friday, gave it all back up overnight. Palladium is making a run at the $715 level, to retain its status as the best-performing of the Big Four precious metals this year.
The yield on the 10-year Treasury bill is still near recent highs, sitting at 2.99% Watch for increasing pressure on bonds, as both ECB and German finance officials have spoken out against maintaining artificially low benchmark rates. The ECB official said that continuing the policy may endanger political reforms, while the German Finance Minister said that the policy has damaged long-term investment, and that the policy cannot continue forever.
Stock markets are once again inching up and setting new records on thin volume. The Nikkei is having its best year since 1972, and U.S. stocks have had their best year since 1997, fueled by trillions of dollars in central bank money printing.
Mainland Chinese stocks were down marginally today on news that local government debt has topped $3 trillion, the latest result of overbuilding on local projects. Chinese and South Korean finance officials are expressing concern over Japan’s rapid devaluation of the yen. This gives Japanese exporters an edge over their Asian counterparts.
The recent strength in the yuan, which has hit 20-year highs, is being supported by commercial banks hoarding cash ahead of year-end inspections by the Peoples Bank of China. Much the same is true for the euro, where EU banks have been repaying emergency loans to the ECB, and are also hoarding cash for the upcoming “stress tests.”