Precious Metals Tumble Overnight Amid Less Risk Aversion

March 15th, 2018 by

The gold price tumbled overnight to $1,318/oz (-0.4%) as traders seemed less risk-averse as the “Ides of March” approached.

Silver prices were down almost 10¢ (-0.55%), trading above $16.40/oz.

Platinum and palladium each gave up 0.4%, as well.

Jobless Claims, Manufacturing Offer Encouraging Signs

Another busy day of economic data helped lift the dollar and U.S. stocks.

The Labor Department reported that weekly jobless claims dropped by 4,000 to 226,000 new claims for unemployment benefits. It was the third decline in the past four weeks.

This is considered a key indicator of a tight labor market. Such conditions are expected to steadily push inflation and wages higher this year.

Manufacturing in the U.S. has also remained robust. Both the Philadelphia Fed and Empire State manufacturing indices have had a strong showing in March, according to the latest data.

The encouraging reports followed February’s ISM manufacturing index, which came in at its highest in nearly 14 years.

As a result, the dollar moved 0.2% higher to 89.9 on the DXY index this morning.

Futures on Wall St were also up by about 0.3%. Blue-chip stocks slumped on Wednesday as the Dow Jones closed 1% in the red.

U.S. home prices jumped 8.8% during February, marking the biggest monthly increase in four years. Inventory for new homes remains thin while mortgage rates are also at a four-year high.

Markets are also watching Washington as President Trump’s newly appointed chief economic adviser, TV personality Larry Kudlow, joins the administration.

Less Risk Aversion Hits Gold, Bonds

As investors pushed stock markets higher, both bonds and gold experienced selling pressure on Thursday.

This halted a considerable rally for government bonds. Nonetheless, the 10-year Treasury yield is still at 2.82%, its lowest thus far in March.

COMEX gold futures were mostly flat on Wednesday but sank 0.5% on Thursday morning.

Stocks traded modestly higher in Europe after eking out gains in Asia during the overnight session.

In forex trading, the Japanese yen firmed to ¥106.0 per dollar. The euro slipped to $1.233 while the British pound was unchanged at $1.396.

Bitcoin prices hit a one-month low below $8,500 after as much as $60 billion in value was wiped out of the total cryptocurrency market in past 24 hours.

Crude oil prices were up 0.4% for the second straight session as WTI and Brent crude moved back above $61/bbl and $65/bbl, respectively.

The rebound came despite the U.S. Energy Information Agency (EIA) reporting that oil supplies in the U.S. rose by 5 million barrels last week, twice the expected increase.

 

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.