With the 4th of July falling on a Saturday this year, U.S. markets will honor the holiday a day early by closing for the entire day. (We are one of the few U.S. dealers in the industry that will be open today, in fact.)
Open exchanges in Asia and Europe were down almost across the board as the Greece vote looms, though Japan’s Nikkei poked just barely in the green. The precious metals opened mixed on what will likely be a slow day of trading; Spot gold was marginally lower, joined by palladium, while silver and platinum both moved slightly higher in the morning. Silver and platinum have had a trend in the last two weeks of advancing in tandem at the expense of gold as investors look for alternative precious metal purchases.
Yesterday in the Markets
Mirroring this morning’s trend, the metals were mixed on Thursday: gold and palladium lost $3 and $4, respectively, while platinum added $4 up to $1,090/oz and silver fared best, up 13 cents to $15.78/oz. After opening about 1.5% higher, the crude oil benchmarks each ended the day in the red, with WTI closing at $56.50/bbl and Brent crude at $61.80/bbl. Treasuries rose slightly, sending 10-year yields to 2.38%. Wall St opened higher before slumping to unchanged by the day’s end. In Europe, the damage to equities was surprisingly small, though two of the continent’s biggest indices, the EURO STOXX 50 and France’s CAC 40, were about 1% in the red.
Factors Affecting Gold Today
The Greek vote coming this weekend will be cast in stark contrast to the celebrations of independence here in the States. Though they are told by the Syriza party leaders that they are voting for a better deal, and cannot be booted from the eurozone, the Greek people would be mistaken to take their rushed plebiscite as a possible step toward liberation. Greece does need to restructure its economy, but if it is to keep the euro, then—as the IMF has insisted—the political leaders of the euro area must offer some debt relief. Both sides will remain at an impasse, regardless of the outcome of this weekend’s vote, until these two truths are resolved. Indications are that Greeks are split down the middle on the vote, which makes sense when one considers how little time the country has had to prepare for and debate the referendum before them, and how confusing and ambiguous the terms of the simple “Yes” or “No” vote are.
The ongoing stock market meltdown in China has yet to relent, as the Shanghai Composite coughed up another 5.8% Friday. The mainland index is nearly 25% off of its high set just three weeks ago, and Chinese equities lost more than $3 trillion in market cap during the correction. Many are speculating that the state will intervene at some point to stem the tide of selling on the Chinese exchanges, though the Shanghai index has already plunged below 4,000 after reaching 5,200 as recently as mid-June.
Enjoy the Independence Day Weekend! The big economic news Monday will be the ISM non-manufacturing index and the PMI services index.