The precious metals opened mostly lower to begin the second week or August. Gold prices trickled lower to about $1,256.50/oz after losing much more ground during Friday’s trading session. It seems that the gold market is still smarting from last week’s jobs numbers. Spot silver lost about 0.5% (-8¢) to fall to $16.16/oz. The Platinum Group Metals were mixed, with platinum slightly higher while palladium was mostly unchanged at $866/oz.
Let’s review Friday’s closing numbers:
Gold: $1,258.40/oz (-$9.50, -0.75%)
Silver: $16.24/oz (-41¢, -2.49%)
Platinum: $963/oz (+$1, +0.10%)
Palladium: $865/oz (-$7, -0.80%)
WTI crude: $49.52/bbl (+49¢, +1.00%)
Dow Jones: 22,092.81 (+66.71, +0.30%)
NASDAQ: 6,351.56 (+11.22, +0.18%)
S&P 500: 2,376.83 (+4.67, +0.19%)
Dollar Index: 93.49 (+0.77, +0.83%)
Feeling the Squeeze
It would appear that the precious metals are still getting squeezed by the positive reaction to Friday’s jobs report, which came in above analysts’ expectations. (However, it’s worth noting that the majority of the new jobs added were the lowest-paying service sector positions, which should give the bulls on Wall St at least a little hesitation.)
Stocks in the U.S. still opened higher after rallying to new all-time highs on Friday. The Nasdaq led the way higher while the S&P and Dow were bouncing around unchanged. Shares in Asia were up 0.5% overnight while the European exchanges were mixed.
The dollar also is staging a bit of a comeback thanks to the nonfarm payrolls data. After gaining over 0.8% to end last week, the greenback were mostly flat at 93.5 on the DXY index this morning. Still, its biggest competitor continued to lose ground as the euro fall solidly below $1.18. The 10-year T-note yield was steady at 2.26%.
Nonetheless, investors seem to be betting (bigly) on better economic growth and a weaker U.S. dollar in the near future, according to the inflows into the largest industrial sector ETF last week, which totaled more than a billion dollars! This is seen as a bet against the dollar because a stronger USD necessarily means weaker profit margins for overseas sales, which many industrial firms rely upon.
After a strong rally pushed crude oil prices back near $50 per barrel, both international benchmarks fell during early trading on Monday. Both WTI crude and Brent crude lost about 70¢, or 1.3%. Although OPEC member nations have been largely compliant with the organizations production cuts that began last winter, growing crude stockpiles may portend another late summer swoon for the oil market.
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.