Precious metals trading in New York opened with declines across the board this morning as a stronger US dollar and fast-falling crude oil conspired to motivate profit-takers to do just that. The moves came on the heels of fresh record achievements in gold and silver amid heavy speculation late last week as well as during the overnight hours yesterday.
Spot gold started the new trading week with a loss of $ 5.6 per ounce quoted at $ 1,480.80 per ounce while silver fell $ 33 cents to open at the $ 42.72 per ounce price marker. All of that “Profit-Taking” was only manifest until the S&P rating agency slammed the US rating outlook with the “Negative” label.
Albeit the US sterling "AAA" rating remains in place; the shift from "Stable" to "Negative" in the outlook gave the markets an instant shudder of fear and helped propel gold to within $ 1.80 of the $ 1,500 headline making price level.
It now appears that the profit-takers will have their hands full battling the profit-seekers in the wake of the S&P news. Volatility will not be in short supply, as was evidenced by the duration of the nearly $ 10 spike in gold this morning: roughly ten minutes. By 9:30 NY time gold was only ahead $2.50 per ounce. The onus is now on the Fed and on Capitol Hill to prove the S&P incorrect.
Platinum and palladium dropped by double-digits with the former losing $ 12 to ease to the $1,777.00 level and the latter slipping $ 20 to open at the $ 745.00 per ounce bid quote. Rhodium remained unchanged at $ 2,300.00 the ounce.
In the background the US dollar gained 0.44 on the trade-weighted index to rise to the 75.38 level while crude oil was down $1.68 to $107.98 per barrel following Saudi statements that the market is in an “oversupply” condition.
Net long positions in platinum and palladium experienced gains during the latest reporting period while the combination of speculative activity amid ample inventory lists in crude oil is making for conditions that might witness a sharp turn-about in black gold, at any moment.
The National Association of Business Economics latest survey shows that higher US sales and higher US hiring are cementing the recovery of America’s economy. The NABE also found that there are signs of a buildup of inflationary pressures in the US as a result of higher materials costs. Wage pressures were not cited as a factor just yet.
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