Gold gained slightly overnight on increased physical demand in Asia, but all four precious metals fell at the COMEX open.
Asian stocks were down on news that the HSBC services PMI for China hit 50.0, down from 53.1 in June. This is the lowest reading in the nine years HSBC has been tracking the sector, and is on the cusp of contraction.
In Europe, the Markit EU composite PMI was 53.8 for July, up from 52.8 in June. This wasn’t enough for the market, as it was expecting 54.0. Services PMI were much weaker in Italy, giving the market jitters about the Mediterranean nations in the EU still being close to collapse.
Wall St. opened moderately lower in volatile action, after barely ekeing out a positive close yesterday. Stocks are being drug down partially by disappointing earnings reports, and partially on concerns over the Chinese economy.
On the geopolitical front, ISIS has gained control of the Mosul dam in northern Iraq, driving off outnumbered Kurds who were guarding it in a firefight. This is the largest dam in the country. ISIS could blow the dam, flooding Baghdad and destroying thousands of acres of farmland in the Shiite-held southern part of the country, or could cut the water supply completely off like they did with the Fallujah dam. In addition to causing a drought in southern Iraq, it flooded the area around Fallujah, forcing the Iraqi Army to withdraw.
In Israel, the IDF has announced that it is withdrawing from Gaza, as an Egyptian-brokered ceasefire takes effect. Negotiations are ongoing to extend the ceasefire beyond the initial 72 hours.
In Washington, Obama is hosting a meeting of several leaders of African nations, in an attempt to forge economic ties between them in U.S. companies. He’s late to the party, as China has already invested several billion dollars in mining and infrastructure projects, to the point where the yuan is officially legal tender in some areas. Not to be outdone, Russia has announced a joint venture with Zimbabwe to develop some of that nation’s platinum reserves.
India reports that jewelry imports in the first quarter rose 10%, because domestic jewelers cannot source any gold to make jewelry due to import restrictions. Wealthy Indians are paying the huge import fees in order to get their baubles.