Spot Gold Bounces Higher, Jobless Claims 44-Year Low

October 19th, 2017 by

Spot gold posted a modest rebound on Thursday morning, thanks in part to a weaker U.S. dollar. The yellow metal added $6 (+0.5%) to trade back at $1,287/oz, an encouraging sign for bulls after it looked like gold might test support at $1,270/oz and below. Spot silver gained 5¢ this morning to $17.02/oz.

Platinum added $5 to $924/oz while palladium lost 0.5% to trade back around $940/oz, tightening the spread between the two Platinum Group Metals.

The DXY dollar index was down slightly again on Thursday to 93.2. Although this helped the Japanese yen advance 0.4% against the USD, the pound sterling actually lost 0.3%. This was despite reports that the leadership at the Bank of England is indicating it believes the time for finally raising interest rates is near. Such a move makes sense given that inflation in the U.K. has been steadily picking up at a faster pace than the rest of the Western world, no doubt due to the Brexit turmoil.

The euro rose back $1.18 as the stand-off between Catalonia and Spain is appearing to come to a head. The Catalans are refusing to back down from their declaration of independence, which has prompted the Spanish government to suspend much of its autonomy and take greater control of the region. In other words, the exact opposite of what declaring independence was supposed to accomplish. Madrid’s heavy-handed response may also be interpreted as a sign that governments across the eurozone want to discourage other separatist movements from being emboldened or empowered.

Weekly jobless claims in the U.S. fell to their lowest since March of 1973, more than a 44-year low, with just 220,000 new claims reported last week by the Department of Labor. Although the data may be slightly skewed by the Columbus Day holiday, it still meant that the raw number of Americans receiving unemployment benefits is down 9% year-on-year. Filings from Puerto Rico and the U.S. Virgin Islands are not included in the government’s data.

Wall St opened sharply lower on Thursday, with the Nasdaq tumbling about twice as far as the Dow Industrials and the S&P 500. Today (October 19th) is the 30th anniversary of the 1987 “Black Monday” crash, which still stands as the biggest single-day drop for the Dow Jones in history. It was even worse than any one-day performance in 1929 or 2007-2008. Proportionally speaking, it would be the equivalent of the Dow losing a staggering 5,000 points in a single trading day at today’s levels.


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