balance of gold and dollar

Precious Metals Rise, Dollar Down

October 10th, 2017 by

After posting solid gains on Monday, the precious metals were once again trading in positive territory on Tuesday morning. This was due largely to a weaker U.S. dollar, finally putting the brakes on a nearly month-long trend of the greenback getting stronger. Spot gold added $5 per ounce (+0.4%) to nearly $1,290/oz, slightly off of gold’s highs earlier this morning. Spot silver leapt 19¢, or better than 1%, to trade back at $17.15/oz. Both platinum and palladium were around 1% higher, as well.

Take a glance at yesterday’s closing numbers for the metals and Wall St:

Gold: $1,283.60/oz (+$7.50, +0.59%)
Silver: $16.95/oz (+14¢, +0.83%)
Platinum: $915/oz (+$1, +0.11%)
Palladium: $923/oz (+$9, +0.98%)

Dow Jones: 22,761.07 (-12.60, -0.06%)
S&P 500: 2,544.73 (-4.60, -0.18%)
Nasdaq: 6,579.73 (-10.45, -0.16%)
DXY: 93.72 (-0.01, -0.01%)
WTI crude: $49.55/bbl (+26¢, +0.53%)

balance of gold and dollar

Not surprisingly, this surge for the gold market comes as the dollar finally seems to be cooling off in the international forex (foreign exchange) markets. The USD was down 0.3% to 93.4 on the DXY index today, ceding about this same amount to the euro, yen, and pound sterling, respectively.

Nonetheless, the dollar has picked up considerable ground on other major world currencies of late, standing nearly 3% above its lows from September. With much of the speculative money exiting the gold trade following the somewhat hawkish tone struck by the Fed at its September meeting, it’s an encouraging sign that the metal prices are rebounding even absent any other strong impetus. The meeting minutes from the FOMC gathering will be released to the public tomorrow.

Stocks were lower in Europe as the Catalan government digs its heels in against a likely crackdown by Madrid. Spain, and certainly EU authorities, are undoubtedly harboring fears that a successful devolution of full autonomy or independence to Catalonia will embolden and inspire other separatist movements around the continent, as Europe is home to a number of cultural minorities that have a history of self-governance despite their territory residing entirely within a larger nation-state.

Stocks were higher in Asia overnight and likewise opened in the green in New York on Tuesday. U.S. bond markets reopen today with the benchmark 10-year yield on Treasurys holding at 2.35%. Everyone will be closely watching for third-quarter earnings beginning to trickle out of Wall St. The chances are good that traders will find even modestly positive results to be cause for fresh all-time highs for stock indices.

Though most economists are now minimizing the impact of the pair of hurricanes that hit the U.S. and Caribbean last month, yet another storm, Nate, has knocked out oil refineries near the Mississippi Delta.

Elsewhere on the domestic front, the media is homing in on the increasingly public feud between the president and one of the high-ranking members of his own party, Republican senator Bob Corker, who is an important vote in the Senate if the administration hopes to pass tax reform without any votes from Democrats. (The GOP holds a narrow 52-48 edge in the Senate, so losing a Republican vote could jeopardize any legislative initiatives.)

Looking abroad, the rapidly souring relations between Turkey and the U.S. could have an impact on a whole host of other international issues, such as the war in Syria. In many respects, how the White House and the State Department handle this sensitive issue will go a long way toward determining the geopolitical landscape in the Middle East. American priorities in the region could become more confusing if an ostensible ally like Turkey, a member of NATO, falls even more into the orbit of Russia or the Islamic nationalism of President Erdogan’s leadership.

 

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.