Gold Steady, Dollar Weak on Light Volume: Morning Market Update April 23

April 23rd, 2014 by

gold rallyPrecious metals are near unchanged this morning, with gold easing off overnight gains. Silver is up slightly. UBS notes a high number of shorts for COMEX silver, and cites this as a short-term bullish influence. Light volumes ahead of the May options expiry tomorrow may let large orders move the price disproportionately for the next two days.

The major platinum mining companies are back at the negotiating table in South Africa, with an offer to basically meet mineworkers’ demands of a 140% pay raise, but spread out over five years. AMCU, the labor union, has agreed to put the offer to a rank and file vote. This strike has been one of the worst in South Africa’s history, with mineworkers going three months without a paycheck and forced to sell belongings for food, while the mining companies have lost approximately $1.3 billion in production.

The dollar is weaker again this morning, but off of the one-week low hit overnight. The Chinese yuan hit a low for the year overnight, but the euro is up.

Today was PMI day, as several purchasing managers index reports were released. The HSBC flash April manufacturing PMI for China saw a small increase, from 48.0 to 48.3. This is the fourth month of contraction for the index, but the rate of contraction is slowing. China is in the midst of an ambitious overhaul of its national economy, away from being purely export-driven to having domestic consumption play a larger part.

The composite EU services PMI also saw a small increase, from 52.2 to 52.5. The composite manufacturing PMI rose from 53.0 to 53.3. The flash manufacturing PMI for the U.S. disappointed, moving from 55.5 to 55.4. Analysts were expecting a jump to 56.3.

U.S. stock markets opened down after six days of gains, even before the domestic PMI numbers were released. Less than exciting earnings reports put a damper on the rising prices. Euro stock indices were also down modestly, while the NIkkei was up in Tokyo on the back of a weaker yen. Hong Kong stocks were drug down by the telecom sector today.

What is it about Tuesdays?

The mainstream financial press is starting to take notice of the “because it’s Tuesday” phenomenon that the alternative press has been charting for a while. For some unknown reason, Tuesdays are the best day of the week for stocks, and the worst day of the week for gold, even though gold has absolutely punished stocks since the first of the year.

confusedIf you average every trading day this year EXCEPT Tuesdays, gold sees an average daily gain of 0.2%, and the S&P 500 sees an average daily loss of 0.4%.

If you look ONLY at Tuesdays, gold has an average loss of 0.3%, and the S&P 500 has an average gain of 0.5%

Using COMEX futures as a benchmark, gold has seen a year-to-date gain of 6.68%, while the S&P 500 has seen a YTD gain of 1.92%.

What the heck is up with Tuesdays?

 

by Steven Cochran

Gainesville Coins Portfolio Tracker and Financial News