Gold prices are seeing selling pressure this morning in New York, as spot gold is now trading above session lows, but still down by 0.65%. Silver is also seeing selling pressure, with spot silver down by 15 cents.
Retail sales in the US for June came in much higher than expected, gaining 0.6% against expectations of 0.1%. The Consumer Price Index likewise gained, recording its fourth month of gains in a row. Stocks are down in Europe after yesterday’s horrific attack in France that left more than 80 people dead. Declines in travel and hotel stocks led indices lower.
Wall St opened in record high territory, but is seeing volatile trade to end the week. The Dow is looking to record a fourth day of all-time highs, while the S&P 500 is shooting for its fifth straight day of record closes.
Gold prices are up from session lows, attempting to regain the $1,325 support level. If it fails to do so, the next line of support is $1,316. Resistance shows up at $1,335, then $1,340.
Gold futures closed lower Thursday, against the backdrop of the soaring stock market. August gold lost $11.40 to settle at $1,332.20 an ounce. September silver dropped nine cents to end at $20.32 an ounce.
Spot gold ended the day marginally higher than its paper counterpart, shedding $7.70 to end at $1,334.60. Spot silver lost a nickel to end at $20.27.
The Bank of England’s decision yesterday to hold off on a rate cut sent stocks in Europe and the US higher. The only real loser was Britain’s FTSE 100, which fell from positive territory to close at a 0.2$ loss. The Dow and S&P 500 both closed at record highs Thursday, helped by a jump in bank stocks. The Nasdaq lagged behind, but erased year to date losses.
Upbeat economic news in Asia and the US have cooled demand for safe havens this week. This is not only affecting gold, but also the Japanese yen, which is on course for it’s worst week since 1999. Rumors that former Federal Reserve Chairman Ben Bernanke met with Japanese Prime Minister Shinzo Abe regarding the mechanics of monetizing government debt (aka “helicopter money”) has pulled the yen sharply downward.
On the other side of the world, the pound sterling is set to record its best week since the 2009 financial crisis. This is mostly due to renewed guidance for Britain as Theresa May takes over as Prime Minister, and Bank of England Governor Mark Carney delaying a cut in interest rates.
The big rally in the stock markets has drawn money out of bonds. Yields on 10-year notes in the US, Japan, Germany and the UK all rose as prices fell.
Crude prices, which have seen pressure from increases in the global oil glut, are erasing losses this morning on expectations that an improving US economy will mean higher oil demand. Oil futures have had a very volatile week, gaining over 4% one day, then giving it all back the next. Both Brent and WTI contracts recorded gains of over 2% yesterday.
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