Gold prices gave up early morning gains as the Federal Reserve announced industrial production for February increased by double what analysts were expecting. The news reinforced beliefs that the US economy was improving, further cementing the view that the Fed would raise benchmark interest rates next Wednesday.
In the precious metals spot market, gold closed $8.50 lower, ending the day at $1,315.70. Silver lost 13 cents, dropping to $16.37. Spot platinum saw the largest drop, shedding $10 to $950. Palladium edged $3 lower to end at $983.
Precious metals futures closed modestly lower across the board yesterday. April gold ended the day at a two-week low of $1,317.80 an ounce, for a loss of $7.80. May silver futures were down 0.7% to $16.42. April platinum settled at $956.90, losing $4.60, and June palladium fell $3.75 to end at $981 even.
The beat on industrial production wiped out any bearish sentiment from a big drop in housing starts announced earlier in the morning. While the number of single family homes being built rose, the number of apartment buildings dropped dramatically.
The US dollar held steady through the disappointing housing numbers, but also ignored the much better than expected industrial output report. The DXY dollar index is holding almost exactly where it closed yesterday, at 90.15.
Wall St continues to be roiled over fears that Trump-backed tariffs will start a trade war. Widespread rumors that Trump would fire National Security Advisor H.R. McMaster. Rumors of such a move have swirled around the three-star general for months, but pundits are taking the abrupt firing of Secretary of State Rex Tillerson as a sign that a new purge of senior officials who have not signed up on the President's foreign policy views may be underway.
Stocks were subdued on the Friday open, after the Dow finally broke a three-day losing streak Thursday. The S&P 500 was no so lucky yesterday, losing ground for the fourth day in a row. In fact, the Dow was the only stock index to post gains yesterday.
In Treasuries, the yield on the benchmark 10-year note rose to 2.850% in early morning trading, after closing slightly higher yesterday at 2.824%. It was reported yesterday that China had trimmed its holdings of US debt by $16.7 billion last month, stoking fears that the communist nation could use its $1.1 trillion stockpile of US Treasury notes as a retaliatory weapon if Trump follows through on his threats to levy more tariffs on Chinese goods coming to America.
Oil futures posted a second day of gains Thursday, with both WTI and Brent gaining 0.4%. Growing worries that US shale output is rising faster than demand is starting to be countered by the growing likelihood that Venezuela's oil industry is virtually inches away from total collapse.
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