Gold closed yesterday up $11 to $1,309, near a two-week high. Silver closed above $20 at $20.16, while both platinum and palladium also saw modest gains. Crude oil was up 2% on fears of sanctions against Russian natural gas exports.
As usual, precious metals are consolidating this morning ahead of the release of the minutes of the Federal Reserve Open Market Committee (FOMC) meeting in March. Gold has given back half of yesterday’s gains, while platinum and palladium are only barely lower. Silver is back below $20, exhibiting its greater volatility.
The dollar, which also seems to hold its breath ahead of the FOMC minutes, is near unchanged from yesterday’s close, in choppy trading. The yen is slightly weaker, while the euro is steady.
Cash is flowing back into emerging market economies and currencies, as traders trade risk for yield. Perhaps the most startling example of this is the announcement that the Greek government will start selling bonds again, for the first time in four years. It was just two years ago that holders of Greek bonds lost 70% of their money as the government in Athens went into sovereign default.
Stocks opened higher in New York, a day after the Dow and S&P 500 barely squeaked into positive territory, and the Nasdaq recovered some of its recent heavy losses. Euro stocks gained on the auto sector, which seems to be finally turning around, and travel stocks.
The Nikkei was down 2.1% to a three-week low in Tokyo, as the Bank of Japan refuses to implement more quantitative easing policies after a hike in the national sales tax. Some analysts fear that the increased tax will slide the nation back into deflation, erasing all the good that the world’s largest QE program has done.
The Hang Seng hit an 11-week high on tech and gambling stocks, while the Shanghai exchange was slightly in the green.
India is in the midst of the world’s largest elections, and the winner may very well be gold. The opposition candidate for Prime Minister has pledged to roll back draconian gold import restrictions and high import tariffs, and the ruling coalition candidate has stated that he is in favor for the government revisiting the subject.