Gold prices are up modestly this morning on a weaker dollar and some short covering that is taking advantage of yesterday’s dip. Silver prices haven’t been as lucky. Silver saw a big drop in early Asian trading to start the week, and is still trending near Monday’s close.
The US dollar’s gains after yesterday’s hawkish statements by Federal Reserve Vice Chairman Stanley Fischer have evaporated under the glare focused on the global central banker meeting this week in Jackson Hole, Wyoming. Like most markets in the thinly-traded dog days of summer, the dollar is assuming a defensive posture ahead of Federal Reserve Chairman Janet Yellen’s speech on Friday. Equities markets have also shaken off Fischer’s statements, as Wall St. opens higher.
Gold is advancing even as oil prices continue to fall. Both WTI and Brent futures are down more than 1% in early trading, after losing 3% on Monday. Traders seem to be taking to heart a warning from Goldman Sachs that even if OPEC did manage to craft a deal to cut production in order to raise prices, it would simply be voluntarily handing over market share to its competitors. US shale drillers, for one, would be so happy.
The European Union seems to be coping just fine so far over the UK’s decision to leave the body. The EU composite PMI for July saw no Brexit pressures, tiptoeing upward to a seven-month high of 53.3 from June’s 53.2 Economists had expected a small regression to 53.1. Any reading above 50 represents economic growth.
Speaking of Brexit, the leaders of France, Germany and Italy have concluded a summit aboard the Italian aircraft carrier Giuseppe Garibaldi, where President Hollande, Chancellor Merkel, and Prime Minister Renzi re-emphasized the health of a post-Brexit EU, and called for closer cooperation between EU member states in fighting terrorism.
From the “I didn’t vote for this” department, Northern Ireland legislators have filed suit against the British government over the implementation of Brexit. The suit claims that Brexit as currently envisioned ignores the Northern Ireland constitution. Several lawsuits have been filed over the UK leaving the European Union, though this case is different by focusing on the laws of a partner in the United Kingdom.
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