The precious metals are each lower this morning as weekly jobless claims came in below expectations at 278,000. Wall Street opened mixed on the data, with the S&P 500 and Nasdaq each falling about 0.4% into the red. The Dow Jones, however, moved more than 0.5% higher in morning trading. After pulling back on Wednesday, crude oil prices are rising again, widening the spread between Brent and WTI to more than $6/bbl. Meanwhile, gold has not responded to the news that Greece's debt situation just got hairier with the ECB after the bank announced it would not accept government debt as collateral for new loans.
Yesterday in the Markets
Wall Street moved modestly lower yesterday, with the Dow Jones faring best, at essentially flat. As of late, the Dow has been outperforming other U.S. indices, but all three are in the red through the first month of the year. Gold rose yesterday, though the rest of the metals lagged behind.
Factors Affecting Gold Today
Jobless claims fell about 12,000 new applications below analysts' consensus expectations, and were significantly below the measure's 4-week moving average of 292,750 claims. Between the solid employment data and the rally in oil prices, expect the Nasdaq--laden with companies tied to the energy sector--to advance into the green at some point today, barring a reversal in crude prices.
In the showdown between Greece and the European Union, the stakes are beginning to get higher with the decision by the ECB not to accept outstanding Greek debt as collateral for any new loan or bailout money. This sent Greek bonds tumbling, and Athens' benchmark stock index fell by more than 5% this morning. While the new Greek government will continue to pursue some resolution to their financial woes, they are committed to ending German-style austerity, directly rejecting the austerity measures forced on them by the ECB as part of the terms of the original bailout loan. As the two sides stick to their guns, the chances that Greece will exit the EU (and all the anticipated domino effect of doom and gloom associated with such a move) becomes much more likely. Growing anxiety over the stand-off in Europe should provide some support to gold prices as the metal is seen as at least a short-term safe haven.
Germany and the ECB have reason to be a bit bolder, as German factory orders were way up in December, rising to their highest levels in nearly 7 years. Industrial goods orders rose by over 4% on the month after contracting about 2.5% in November. With each sign of the German economy picking up, it provides more fuel to the Germans' argument in favor of austerity. The reinvigorated industrial demand helps explain why Brent crude has been recovering at a faster pace than its West Texas counterpart.
In the U.S., more fears over cyber-security are being stoked by the news that Anthem, the country's second-largest insurer, had its data hacked by a sophisticated malware software that gathered not only the names, email addresses, birthdays, and income information of customers, but also their Social Security numbers. A similar attack hit Target last year, and the third-largest insurer in the U.S., Aetna, was breached in 2009. With healthcare costs rising, this sector is one targeted by hackers more and more prevalently.
Tomorrow's big news will be the non-farm payrolls report for January as part of the broader outlook on the U.S. employment situation.