Gold is up from two-week lows hit overnight, as the dollar consolidates after a failed run to hit 100 on the DXY index. Spot gold and silver are down 0.3%, while the dollar is down 0.8%. Crude oil is up modestly.
European stocks are down over rumors Greece is preparing to default on its IMF debt next month, while Wall St. is up and down despite good economic news and earnings.
Yesterday in the Markets
Wall St. fell into negative territory yesterday afternoon, with the Nasdaq the last to succumb after an earlier boost that Netflix gave the tech index faded. Fears of downbeat earnings due to a strong dollar choking overseas profits pressured stocks.
The dollar limped along in New York after giving up a rally in late European trading that saw it on the cusp of breaking the psychologically important 100 mark against a basket of currencies. The greenback closed around the 99.5 mark after hitting an intra-day high of 99.99.
Spot gold closed just under the $1200 mark, at $1198, down 0.77%. Silver was down 23 cents, while platinum dropped 1.88% and palladium fell 0.9%. Crude oil saw slight gains on Monday, up around a half percent.
Factors Affecting Gold Today
The first earnings reports from the “too big to fail” banks were favorable, considering the billions of dollars they have collectively paid in fines for market manipulation. JP Morgan Chase reported that earnings increased by 12%, and announced a 10% rise in dividends. Wells Fargo saw earnings fall 1.5%, but this was less than analysts expected. Johnson and Johnson however, reported that earnings were down due to a strong dollar impacting its overseas business. Wall St. has taken this as a harbinger of things to come, and dropped after opening slightly higher.
Retail sales in the U.S. were up 0.9% in March, after falling for the past three months. Core retail, which doesn’t count automobiles, gas, or food, was up only 0.2% against expectations of a 0.5% increase. Wholesale prices were also up, as the producer price index advanced 0.2%. This is the first growth in five months, and follows a 0.5% drop in February.
European stocks are down as the Financial Times reports that the leftist government in Greece is preparing to default on its debt payments to the IMF next month unless its creditors supply more bailout funds. Despite all the sound and fury from Athens, and the war in the media between the two sides, Greece’s creditors say they have seen nothing of substance in the proposals put forward so far.
Russia isn’t waiting for a completed agreement between Iran and the established nuclear powers regarding its atomic program. Desiring to get in on the ground floor with revitalized trade with its long-time ally, Moscow has signed a deal to supply up to $20 billion in food, construction material, and heavy machinery to Iran in exchange for oil. Russian President Vladimir Putin today signed a decree to sell $800 million in advanced S-300 anti-aircraft missile systems to Iran, which could thwart any attempts by Israel or the West to bomb Iran’s nuclear facilities. The deal, originally scheduled for 2007, had been suspended by Russia due to pressure from the US and EU.
In retaliation, Israel has said it will resume recon drone sales to Ukraine.
Tomorrow is Tax Day in the US, when people scramble to get their last minute tax returns postmarked before midnight.
Earnings reports continue, and by today’s reaction on Wall St., the markets are expecting more bad news regarding overseas earnings.
We get consumer prices from Germany and France, import/export data for the EU as a whole, and a policy announcement from the European Central Bank.
China releases GDP, industrial production and retail sales figures, while the US reports on industrial production and petroleum stockpiles.