The precious metals were mixed on Thursday morning as markets anticipated the major news stories expected to break this afternoon: the result of the U.K. parliamentary elections, the outcome of today’s meeting of the European Central Bank (ECB), and ousted FBI Director James Comey’s much-awaited testimony before the U.S. Congress about the ongoing investigation into the Trump campaign’s possible collusion with Russian agents during the election.
Given the salaciousness of the topic and the potential problems it may pose to the Trump administration, everyone will be transfixed by the Comey testimony. (That’s even if nothing especially revelatory is discovered.)
The Comey controversy will undoubtedly suck up much of the oxygen in the news media. Nonetheless, it’s far from the only major event taking place today that could shake up markets.
Gold prices were modestly below unchanged on Thursday morning, trading about 0.6% lower to $1,280/oz. The silver price lost roughly 0.8% to fall to $17.40/oz, and platinum gave up about 0.4% to trade below $940/oz. Palladium went the opposite direction, surging better than 2% to approximately $850/oz.
The U.S. dollar clawed back about 0.25% on Thursday morning, trading at 97.0 on the DXY index. The 10-year Treasury yield eased up a bit to 2.18%.
Votes are being tallied right now in the U.K. as they wrap up the snap elections called by Prime Minister Theresa May. The move seemed straightforward at first: the next parliamentary elections were scheduled for 2020, right in the thick of the Brexit negotiations, so calling them now to avoid that situation seemed logical. Moreover, the Tories were expected to gain seats.
This gamble doesn’t seem to have paid off, as most indications show that the Labour Party will at least take some seats away from the ruling party. The overriding narrative of the election has been that neither party’s leadership provides much for Brits to be confident about, hence it will be an election with no clear mandate for the winners.
Today also sees the June gathering of the ECB take place. With economic conditions around Europe beginning to show signs of improvement, many expect the central bank to begin unwinding its stimulus program ever so gradually. While monetary policy remains a quagmire in the eurozone given the lack of any mechanism for regulating fiscal policy (i.e. eurozone countries share a common currency but have no unified spending plan), the future of the EU appears to have strengthened following the election of the pro-European candidate Macron in the recent French elections. German Chancellor Angela Merkel’s party also appears poised to win reelection in Germany, as well.
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.