Gold saw a modest spike on the COMEX open this morning on bargain hunting and short covering, a day after closing down $5, near a seven-week low. Silver also saw a jump at the opening bell in New York, after closing flat yesterday.
Platinum is riding moderate gains seen in European trading into the New York session, while palladium saw a late surge in London.
The PGMs (Platinum Group Metals) are getting attention due to the increase in auto sales in the U.S. and EU, and also news that Anglo American Platinum, the world’s largest platinum miner, has sent force majeure notices to its South African suppliers. The mineworkers strike in the South African platinum fields is in its tenth week, idling 40% of global platinum production. While Amplats has pledged to honor sales contracts, even if it has to buy platinum at a loss on the open market, suspended operations at its mines means that there have been no supplies consumed since January 23rd, the day the strike started.
Gold demand is China is reported to be strengthening as we head into April. March has traditionally been a “soft” month for gold, but this year saw the crisis in Ukraine lead to noticeable safe haven demand, while a foundering stock market led others to take some profit and set it aside in physical assets.
Speaking of the Ukraine crisis, the deputy supreme commander of NATO warned member nations that Russia has amassed an estimated 40,000 front-line troops with armor and close air support on its border with Ukraine.NATO estimates that it would only take 3 to 5 days for Russia to “liberate” the majority-Russian provinces in southern Ukraine to open a land path to Crimea, then spread west to take the vital seaport of Odessa and cut Ukraine completely off from the Black Sea and “liberate” the bordering Russian-speaking separatist area of Transdniestria in Moldova.
In the U.S., the dollar finally caught a break when the ADP private payroll report revealed that 191,000 private sector jobs were created in March. This is slightly less than the 195,000 analysts expected. Factory orders picked up in February from the blizzard-induced slowdown as well, rising 1.6% after a drop of 1% in January. Companies, especially automakers, are still working through a large amount of inventory, which will limit production growth. Higher mortgage rates seem to be weighing on the housing market, as the MBA mortgage application survey for last week showed a drop of 1.2%, fueled by a big 3% drop in refinancing.
On Wall St. stocks are flat, despite the favorable economic reports. European stocks were higher, supported by earnings and expectations that the ECB is going to introduce stimulus to increase inflation. The Nikkei hit a three-week high as the yen continues to depreciate, hitting a 10-week low. Hong Kong stocks were up, as the real estate sector saw a boost from rumors that the Chinese government was going to start relaxing property restrictions put in place to deflate a real estate bubble.
India is recovering from the emerging market crisis, with the rupee rising to an eight-month high and the current account projected to have shrunk in half for fiscal 2013-2014. Rumors are running hot and heavy that the government will ease gold import restrictions to mend fences with the people, as it suffers in the polls leading up to next month’s elections.