This morning finds gold once again holding on to the previous session’s big gains. A stronger dollar has been unable to dent gold’s energy, as global risks drive demand. Late day profit taking in Europe was promptly met with bargain hunting on the New York open, keeping gold at three-week highs.
The DXY dollar index began rising in pre-dawn trading, and is making a run to regain the 94.00 level. The morning rally has stalled right at that point.
Oil futures are showing some profit taking this morning, after hitting ten-month highs yesterday. The settlement of Nymex oil futures above $51 was the trigger for the correction. Oil prices are down over 1% this morning, but are still near double their low.
Technical numbers have first resistance at $1,269, with the next barrier at $1,274. First support is at $1257, then $1248.
Stocks inched higher on Wall St. Wednesday, once again supported by a rally in oil. The Dow closed (barely) above 18,000 for the first time since April, gaining 66.77 points (0.37%) to end the day at 18,005.5. The S&P 500 fell tantalizingly short of a new all-time high, closing up 6.99 points to 2119.12. The Nasdaq added 12.89 points (0.26%) to close at 4974.64
Gold has another very good day Wednesday. August gold futures settled another $15.30 (1.2%) higher. at $1262.30 an ounce. Spot gold added $19.30 (1.55%) to close at $1262.50.
Silver has been lighting the markets on fire this week. July silver futures were up 3.7% to settle at $16.99 an ounce, while spot silver shot 4.07% higher, to end at $17.17. This was the best day in 8 weeks for silver.
Oil continued its tear yesterday, with West Texas Intermediate futures closed at $51.23, their highest point since July 2015. Brent jumped 2.1% to settled at $52.51 a barrel, its best performance since last October. Crude prices are nearly double their February lows.
Diminishing odds of a hike in benchmark interest rates continued to be an anchor around the dollar’s neck on Wednesday. The greenback fell to a five-week low of 93.558.
First-time jobless claims dropped 4,000 applicants to 264,000. This is under experts’ expectations of 270,000, but was not enough to prevent stocks from opening lower on profit taking.
The Brexit willies are becoming contagious in Britain, as more people pile into physical gold ahead of what could be severe market turmoil if the June 23 referendum has the UK leaving the European Union. Gold giant Sharps Pixley reports heavy traffic at its posh London showroom, with bullion selling out before the wholesale deliveries can even arrive.
Oil prices should resume an upward arc after today’s profit taking is done, as news of a second militia group bombing Nigerian oil pipelines will put an even greater squeeze on global oil output. The original militant group, the Niger Delta Avengers, punctuated their rebuff of the government’s attempt at negotiations by blowing up another Chevron oil well.
The last Friday before the June Federal Reserve policy meeting brings consumer prices in Germany, industrial output in France and Italy, consumer sentiment in the US, and the Baker Hughes oil rig count. Another surprise growth in active oil rigs could signal that $50 oil has reawakened the US fracking industry, which would put a cap on global oil prices.
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