Precious metals and bonds saw big inflows Friday afternoon, when the Ukrainian government said it had destroyed multiple armored vehicles in a Russian Army convoy that had intruded into Eastern Ukraine.
Gold rose to near $1,305, while palladium hit a 13-year high of $901 before easing a couple of dollars.
News this morning that talks in Berlin between Russia, Ukraine, Germany and France over the situation had resulted in a preliminary agreement to let the Russian humanitarian aid convoy into eastern Ukraine helped ease global tensions. Stocks made gains after Friday’s losses, and bonds and precious metals saw easing demand.
The International Red Cross said that it will not participate in the distribution of the aid unless the safety of its workers from being killed or kidnapped is guaranteed — something that has not happened yet. Wider talks are being held up by Russia’s insistence on an immediate and unconditional cease fire, in an attempt to rescue pro-Russian rebels in eastern Ukraine. The last two rebel strongholds in Luhansk and Donetsk are nearly surrounded, and the Ukrainian Army claims to have regained possession of parts of both cities.
This morning, gold is testing support at $1,297, with further support at $1,292 back-stopping any pressure. Silver did not see any rebound on Friday afternoon, and has trended near Friday’s closing price overnight. Platinum declined overnight in Europe, and is near Friday’s lows.
The yield on the 10- year T-note, which fell to 2.34% Friday, is at 2.37% this morning. The yield on the 10-year German bund rose back to 1% this morning, after Friday’s lows. The dollar hit a two-week low in Asian trading overnight, but is up modestly in New York.
Major economic news tomorrow will include US Consumer Price Index and Housing Starts, and the UK Consumer Price Index and Producer Price Index reports.