Precious Metals Fall Along With Broader Markets After Cohn Resigns

March 7th, 2018 by

U.S. markets slumped at Wednesday’s open on news of the resignation of a key White House adviser.

Spot gold gave back about $4 (-0.3%) this morning but still traded at $1,330/oz.

The other precious metals followed Wall St lower, enduring steeper losses.

Spot silver was down 20¢ (-1.2%) to about $16.50/oz. Platinum and palladium each lost more than 1%.

Cohn Leaves White House Over Trade Policy

Although there was plenty of other economic news to consider, the financial news was dominated by headlines about Gary Cohn.

Cohn, the top economic adviser for the Trump administration, resigned due to a dispute with the president over imposing tariffs and other possible trade barriers.

His presence in the West Wing was seen as an important link between the administration and Wall St. Cohn previously worked for Goldman Sachs.

Cohn’s departure has placed even more attention on U.S. trade policy.

At least one official at the Federal Reserve says that tariffs could influence how the central bank approaches monetary policy, as well.

In other news, the U.S. trade deficit came in at its highest in more than nine years.

Jobs data were also reported on Wednesday. ADP private-sector payrolls rose by 235,000 last month.

The big employment report comes on Friday when the nonfarm payrolls for February will be released by the Bureau of Labor Statistics (BLS).

Meanwhile, 59% of respondents in a survey conducted by Edison Research said they anticipate a recession within the next year.

Wall St Lags Behind Global Markets on Wobbly Wednesday

U.S. stocks opened sharply lower.

In fact, all 30 companies listed on the Dow Jones index traded in negative territory this morning.

Global shares fared better. Most European indices were near unchanged as focus turned from tariffs to tomorrow’s ECB gathering. Germany’s DAX index rose 0.5%.

Equities were off about 0.7% across Asia. Japanese diplomats remain skeptical about the potential détente between North and South Korea.

However, the yen gained 0.3% to ¥105.8 against the dollar. This was close to a 16-month high.

The USD was flat at 89.5 on the DXY index. Forex markets were mostly quiet on the whole. The euro inched higher for its fifth straight daily advance.

Crude oil prices were off slightly as most commodities sank on concerns of a trade war.

Accordingly, bonds saw fresh demand on both sides of the Atlantic thanks to the uncertainty. The 10-year yield on U.S. Treasurys was down three basis points to 2.86%.

 

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