Gold has regained yesterday’s closing level after mild profit-taking overnight. The year-best rally so far is continuing, in small steps. Gold has been building a base at the $1,290 level since Tuesday afternoon, with closes at $1,290 and $1,291 (which were new highs for 2014.) This behavior matches how gold has acted so far this year: grinding up past the nearest resistance level, then gathering strength before testing the next one.
Silver has been in an extremely tight trading band in overnight trading this week, with all the action happening in New York. Platinum and palladium both notched good gains yesterday, but are slightly softer today. Platinum has so far resisted gaining a tailwind from the protracted mining strike in South Africa, for some reason.
The latest in a string of severe winter storms is socking in the U.S. East coast, from Maine to Georgia. Forecasts are so dire, new Fed chairman Janet Yellen has cancelled today’s planned testimony before the Senate, and several government offices are closed.
The nasty winter we’re having is getting the blame for nasty economic news this morning. January retail sales dropped a worse than expected 0.4%, after a less than stellar holiday season. Similarly, first-time jobless claims last week rose by 8,000, for a total of 339,000 newly-unemployed people seeking assistance. Expectations were for a slight drop to 330,000. The four-week rolling average jumped 3,500 to 336,750.
Gold mining stocks have been outperforming the actual metal so far this year, not to mention the poor showing for equities in general. That came to a halt for three of the biggest names in mining today, as Kinross, Goldcorp, and Barrick all reported fourth quarter losses.
The dollar is down today, as it missing out on safe haven demand. The yen, pound, Swiss franc and euro are all stronger this morning.
Wall St. opened solidly in the red this morning, on the back of the retail sales and unemployment reports, but is recovering as traders decide to blame the snow for the numbers.
Euro shares were down on disappointing earnings, and renewed political drama in Italy, while in Japan, the Nikkei ended a three-day rally as it dropped 1.8% on poor earnings and (well-placed) worries over what this morning’s economic reports in the U.S. would say.
Hong Kong shares are down from three-week highs on profit taking, and the shuffling of the index. China Coal Energy, and Zoonlion Heavy Industry were removed from the index. These companies represent the two most distressed sectors in Chinese manufacturing. Shanghai shares were also down moderately, losing 0.55%.
The market will be watching today to see if gold keeps up its march to incrementally higher closes for the year, as it gets ever-closer to breaking the 200 DMA at $1,312. It has closed over the 100 DMA for three days in a row, As the platinum strike in South Africa continues, mining companies will start running out of above-ground ore stocks, which should lend support to higher prices. The companies are betting that they can last longer than the striking miners themselves, who, as the primary bread winner of the family, are on the average responsible for feeding ten people each.