Gold prices are solidly higher this morning, after finishing flat on Wednesday. Spot gold hit a 2-1/2 month high of $1,226 an ounce overnight in London, reaching its highest point since November. Today's double digit gains has brought out some profit-taking, as expected, but buyers are showing resilience and keeping prices above $1,220/oz. Analysts are watching for gold to close above significant resistance at $1,225 to signal a new leg up in prices.
Spot silver is posting minor gains this morning, as platinum and palladium follow suit. In the futures market, palladium, platinum, and silver occupy three of the top four positions year-to-date. Yesterday's statement from the Federal Reserve Open Market Committee (FOMC) was considered "vague but dovish" by markets, sending the US dollar to an 11-week low. The dollar ended January sharply downward, posting the worst start to the year in 30 years.
In more central bank news, the Bank of England made no changes to monetary policy, as expected. However, its adjusted forecast for the British economy brought the pound down from a 7-week high that was associated with expectations of an interest rate hike.
A report that first-time jobless claims fell by 14,000 compared to last week did little to nothing to help the dollar or hinder gold prices. On the other hand, layoffs in January rose by 37% from December, according to the Challenger Job Cuts Report. Taken year-on-year, however, layoffs were down 39% from January 2016. The retail sector was the hardest hit, as foot traffic in brick and mortar stores falls off in favor of online shopping.
Estimates for tomorrow's announcement of January non-farm payrolls forecast 174,000 new jobs were added, and wages grew by 2.8%. The U3 unemployment rate is thought to have remained steady at 4.7%. (The U6 unemployment rate, which counts the long-term unemployed, was 9.2% in December.)
Treasuries are gaining again this morning, as markets go into a bit of risk-off mode after Trump's haranguing of Australian Prime Minister Malcolm Turnbull in the first phone call between the new US administration and one of our staunchest allies, who contributed troops to the war in Afghanistan. More safe-haven demand materialized when Trump threatened in a phone call to Mexican president Enrique Peña Nieto to unilaterally send US troops into Mexico to hunt down drug lords.
Oil prices are lower after a two-day rally, ignoring reports of production cuts by OPEC and a weaker dollar. One damper on oil prices may be a report from the US Energy Information Administration that the US is set to export more oil in 2017 than the total production of four different OPEC members.
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