Metals Up As Jobless Claims Rise: Morning Market Update Apr 23

April 23rd, 2015 by

Jobless claims came in slightly higher in this week’s announcement, registering at 295,000 new claims, seasonally adjusted. There are signs, however, that the labor market has been firming up overall: the rolling four-week average for new claims fell by over 20,000 during the period from March to April, suggesting that growth in the labor market is actually accelerating. Nonetheless, this morning’s somewhat unfavorable employment news pushed gold slightly higher while the rest of the metals were trading around unchanged.

Yesterday in the Markets

Wednesday saw stocks rally near recent highs, with each U.S. index gaining about 0.5%. Gold saw its worth trading day in 6 weeks, ending $15 lower, as both silver and the yellow metal lost about 1.5%. Treasuries fell considerably, with 10-year yields moving about 8 basis points higher to 1.97%.

Factors Affecting Gold Today

The jobless claims data followed up yesterday’s solid existing home sales numbers, which sent gold plunging below $1,190/oz. Though the precious metals have been sliding again on improving sentiment among both U.S. investors as well as consumers, the market cannot ignore the red flags in both Asia and Europe. While China’s stock market bull run is beginning to look like a bubble, it is only a matter of time before the economic crisis in Greece begins to take its toll on the rest of Europe.

rising dollar chartU.S. firms like GM and Procter & Gamble saw weaker 1Q earnings due to the strong dollar hurting sales overseas. The dollar was just under 98.0 on the DXY this morning, gaining against the euro on lower consumer confidence data in the EU. The greenback rebounded from early losses and undulated around unchanged before closing slightly in the green.

There is, of course, the continuing development with cheap crude oil prices. Brent crude gained yesterday while WTI fell, widening the gap between the two benchmarks nearly to $10 again. This was partly attributable to the EIA announcing last week’s crude production dropped by 18,000 barrels per day, or about a 2% decrease. Yet, both crude benchmarks were about 2.5% higher this morning, with WTI above $57.50/bbl and Brent above $64.25/bbl.

In bankster news, Deutsche Bank has pled guilty and agreed to pay $2.5 billion in the Libor manipulation settlement. The fines will be divied up among the various affected institutions: $340 million to the Financial Conduct Authority (U.K.); $600 million to the state of New York; $800 million to the CFTC; and $775 million to the Justice Department.

moneymanThe recent story of an individual trader bringing about a momentary market crash in 2010 is beginning to spiral beyond reason. Navinder Singh Sarao, the “Flash Crash” culprit, is being paraded around the media as a scapegoat for the various megabanks and financial manipulators to claim exoneration. When markets go haywire, it’s rather convenient to blame a single trader instead of the entire system, or the powerful institutions that arbitrarily govern it.

looking-aheadLooking Ahead

The Ifo business sentiment survey comes out in Germany; durable goods orders are announced in the U.S.; and Japan releases its “All Industry” index, which is an approximation of GDP growth.

by Everett Millman

Gainesville Coins Financial News and Portfolio Tracker