Gold is seeing profit taking battling with bargain hunting evaporate this morning, as the yellow metal tries to eke out a weekly gain. Commodities in general are going into defensive mode to close the week, led by substantial drops in oil.
Uncertainty over the Doha oil summit this Sunday is being met by heavy profit-taking in crude futures. Both West Texas Intermediate and Brent are down over 2.5% this morning. This is oil’s third day of losses in a row, but if the market can staunch the bleeding, it will still close the week with gains.
Commodities are seeing no help from a weaker dollar this morning. The greenback is down, even though the Bank of Japan has basically declared war on the big yen rally.
Gold was down more than 1% Thursday, for a third day of losses. The dollar kept pressure on precious metals, as it held on to big gains it booked on Wednesday. June gold futures settled at $1,226.50 for a 1.7% loss. Spot gold closed the day at $1,227.60, down 1.19% for a $14.80 loss.
Today’s technical numbers have first support at $1,225. Behind this, support is found at $1,220. First resistance is $1,233. The next barrier will be $1,239.
Global stocks were up for the fifth day on Thursday, but Wall St. ended flat after two days of gains. Mixed earnings reports and lower oil prices led to a pause for US stocks.
Markets are facing a lot of turmoil to end the week, as major political developments are expected this weekend.
As Sunday’s oil summit in Qatar grows closer, more traders are realizing that even a successful agreement will not help the oil markets. Crude stockpiles would still be growing by 1.5 million barrels a day.
Brazilian Impeachment Looms
Sunday is also when the Brazilian Congress votes on articles of impeachment against President Dilma Rousseff. Brazil’s Supreme Court voted 8-2 against the government’s attempt to halt the impeachment process. Mass protests calling for Rousseff’s ouster have torn Latin America’s largest country apart.
First quarter GDP in China came in at 6.7%, the slowest in 7 years, but in line with government projections. Stimulus measures by the Chinese central bank are credited with rescuing economic growth for the first quarter.
The finance ministers of the world’s top 20 economies are meeting in Washington DC to discuss global growth and monetary policy. Among the subjects being discussed is the sharp rise in the yen, downgrades for global economic growth, and the weak effects from central bank easing.
Bullion Sales Figures
On the retail front, 2016 American Silver Eagle sales have hit the 17 million mark so far this year. On the other side of the world, gold sales at the Perth Mint hit a five-month high in March. This was 29% higher than February, and 40% higher year over year. Perth Mint silver sales hit a six-month high in March, rising 67.5% from February, and jumping 175% higher than this time a year ago.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product