Spot gold regained most of Wednesday's loss overnight, and is bouncing in a $5 range in New York in reaction to various economic reports. Physical buying in Asia increased after spot gold posted a $14.40 loss that brought it back to the $1,186 support level.
Silver is back to painting an almost identical chart over the last three days, after yesterday's move by one or more large players used poll results on the Swiss gold referendum to flush both gold and silver stops out on the downside and the upside.
Platinum erased all of yesterday's losses overnight, while palladium has gained slightly on yesterday's close.
The dollar is seeing its highest volatility in 9 months, jerking above and below unchanged after bleeding off overnight gains in late London trading. Wall St. opened lower on disappointing economic growth reports out of the EU and China. This news also has European stocks trading lower. Crude has reversed yesterday's losses, trading up nearly $1.00.
Yesterday in the Markets
The release of the October FOMC meeting minutes left traders confused yesterday, so they took the safe option: they sold. The Dow closed basically flat, down 0.01%. Tech shares weighed on the S&P 500, which was down 0.5%. The Nasdaq was the big loser, shedding 26.73 points to close down 0.57%.
The dollar was back to seven-year highs against the yen yesterday, as the pound sterling reversed recently losses on news that the Bank of England was watching for signs of increasing inflation. This put the BoE back in the running to be the first major central bank to raise interest rates from the "emergency-that-became-normal" near zero level.
Gold was hit by one or more large players deciding to use the news that the Swiss gold repatriation referendum was losing support, to smash gold and silver prices down to trigger sell stops. They waited for a bit to let people establish covers for shorts, then blasted the price back up to blow those positions out. This way, they made money going down and going back up. This was enough to make the small paper trader/speculator decide to close out positions, causing a downtrend into the close.
Wednesday's closing numbers:
Economic News Affecting Gold
Stocks are being pressured this morning by discouraging economic news from China and Western Europe. The flash manufacturing PMI for China shows the Middle Kingdom is teetering on industrial contraction, coming in at 50.0. Any reading under 50 indicates contraction. The EU composite flash PMI also dropped more than expected, posting 51.4 as analysts expected it to remain at 52.2. German flash manufacturing PMI also dropped, from 54.3 to 52.1. The numbers from France still show contraction, but is edging up slightly. The flash PMI is 48.4 from 48.0.
Retail sales in the UK rose almost three times as fast as expected, gaining 0.8%, pointing to a continued recovery in the British economy. Producer prices in Germany are indicating disinflation, moving from unchanged last month to fall 0.2%. The annualized drop was a full 1%.
Today was a big day for economic news in the U.S. First-time jobless claims dropped only 2,000 applications from the previous week's revised number of 293,000. Consumer prices were flat, after rising 0.1% in September, giving an annualized inflation rate of 1.7%. Core CPI, which ignores food and energy, rose 0.2%, twice as much as expected. The annualized core CPI came in at 1.8%.
The U.S. joined most of the rest of the world in posting disappointing manufacturing numbers, The flash manufacturing PMI came in at at 54.7, dropping from 56.2. This is the lowest level since January's "polar vortex." Analysts had expected an increase to 56.5. Existing home sales for October were up 1.5%, and the index of leading economic indicators rose slightly to 0.9% when analysts were expecting a drop from 0.8% to 0.5%.
The "Flash Boys" of gold have decided to change their computerized short-term gold manipulation algorithms to focus on Asia, to hit the markets when the Chinese traders go to lunch. This is so obvious that Reuters is reporting on it.
In related bad behavior, it was revealed today that the revolving door between the New York Federal Reserve and Goldman Sachs caught a banker in the butt. Goldman Sachs fired a junior banker in late September who had left his job at the New York Federal Reserve in July to take a job at the mega bank, for stealing secret Federal Reserve documents before he left, and passing them around at GS. A second GS employee who didn't report the possession of the stolen documents was also fired. (The NY Fed is supposed to regulate GS and the other "too big to fail" banks.) In related news, the NY Fed fired an employee for sending secret Fed documents to Goldman Sachs.
It is surely just coincidence that these actions came immediately after former NY Fed bank examiner Carmen Segarra released tapes of conversations she says she recorded at the NY Fed, showing that investigators were pressured by their superiors into dropping charges against Goldman Sachs. The NY Fed has a history of being run by former GS executives, and GS executives that left the NY Fed to join the bank. In fact, NY Fed president William Dudley used to by the chief economist at Goldman.
Geopolitical News Affecting Gold
Officials in Bangladesh are being totally overwhelmed by gold smugglers transiting across their country into India. Gold seizures in Bangladesh are 100 times the volume of last year. Legal gold imports into India are increasing, as well as gold seizures originating from nations other than Bangladesh. If that tonnage could be quantified and added to legal imports, it would probably shock a lot of people to see how much gold India is still buying.