Gold hit fresh three-week highs on the COMEX open this morning, as buy stops were triggered. At 9:30 am ET, gold was climbing almost vertical at $1,292, in a possible run at $1,300.
Silver was up over 1% in early trading. Platinum and palladium are seeing slight gains, as news that the platinum mining union in South Africa has dashed hopes of a labor settlement.
The metals did not have much of a reaction to the FOMC meeting or Yellen’s testimony, as it was pretty much all as expected. Gold closed up $5.80 at $1,277.50, while silver was up 14 cents to $19.90. The PGMs saw slight gains, with platinum up $9.00 to $1,445, and palladium up $8.00 to $823.00. The dollar closed lower, while crude oil prices stayed in a tight range near multi-month highs.
South African mineworkers’ union AMCU has reneged on the agreement in principle reached with the platinum mining companies after over six months of negotiations, by making new demands. These demands include an immediate payment of 1,000 rand ($280) per worker as a reward for going back to work, and a moratorium on layoffs or restructuring, among other demands. The mining companies say that the new demands increase their costs by $92 million, and that due to damage to the mines from disuse, closing some of them is unavoidable.
In other African mining news, the largest mineworkers’ union in Zimbabwe is threatening a nationwide strike if the government does not crack down on safety violations at the country’s gold mines. Last week, seven miners were killed and 11 injured with the hoist cage they were riding broke loose and plunged 80 meters into water at the bottom of the mine shaft. Over 30 miners have died in preventable accidents this year in Zimbabwean gold mines. Union officials are set to tour the many smaller mines where these violations are most common, and tell the workers to down tools if unsafe conditions are found.
The London Bullion Market Association (LBMA) meets tomorrow to compare and discuss the several competing offers to replace the London Silver Fix, which will cease operations in August after 116 years.
The dollar is at a one-month low this morning, and weakening. Some analysts believe that the dollar dropping in times of geopolitical crisis is proof of the world’s decreasing faith in the greenback as a safe haven, while others believe that China is using these opportunities to sell their dollars, so as to not make the value crash for their remaining dollars.
Brent crude oil is well over $114 a barrel this morning, while West Texas Intermediate is just below $106.
First-time jobless claims for last week fell by 6,000, as fewer people were shown the door than the previous week. The number of newly-unemployed came in at 312,000, about in line with expectations. Continuing claims dropped to the lowest level since October 2007, but it is unclear how many found work and how many had their benefits run out.
As mentioned earlier, the Federal Reserve Open Market Committee said nothing that was unexpected yesterday, Stock markets across the globe are riding the news to highs, except for China, where a “disappearing collateral” scandal is shaking the financial sector. Apparently, fake invoices for iron and copper were used to secure multiple loans, and now when the banks come for their collateral, it has disappeared from the warehouses.
France is joining the US in calling for the Shiite government of Iraq to stop persecution of Sunnis, if it wants military help in beating back the terrorist army of the Islamic State of Iraq and Syria. The Sunni group, which is so violent that it was kicked out of Al Qaeda, has many members who were formerly soldiers in the Iraqi Army under Saddam Hussein. The US-installed Shiite government has used its new position of power to inflict retribution on the Sunnis who were in power under Saddam, instead of trying to build a coalition government.
The presidents of Ukraine and Russia are attempting to negotiate a cease-fire between pro-Russian insurgents in Eastern Ukraine and the Ukrainian government. A major pipeline carrying natural gas through Ukraine to the EU was sabotaged recently, and is still in flames. Russia is still transshipping natural gas through Ukraine to the EU, even though it has cut Ukraine itself off from new deliveries due to non-payment.