Wednesday morning saw the precious metals all slide into negative territory as investors shun safe havens and turn their attention to equities. The 10-year Treasury saw a bit of a selloff, sending yields up to 2.50%. Meanwhile, spot gold began the morning 0.6% lower, approaching the $1,200/oz level before slipping even lower to $1,195/oz. Silver prices lost 25¢, about 1.5%, to trade below $17/oz. However, silver futures pointed even lower.
Platinum initially fared the best out of the group, losing only $4 per ounce to hold just shy of the $1,000/oz mark, but it succumbed to the trend and sank almost 2% lower by 9:45 am EST. Palladium prices were sharply lower, losing nearly 4% (-$30 an ounce) to drop below $770/oz.
Stocks Rally, Trump Takes Action
As markets opened in New York, global stock indices were already solidly in the green in virtually every corner of the world. Japan's Nikkei 225 (+1.43%) and the benchmark EURO STOXX 50 (1.45%) led the way. After gold recently hit a two-month high, it's not entirely surprising that traders would be tempted to take profits and move into riskier assets.
Stock futures are pointing higher in the U.S., and the Dow Jones is widely expected to break the "magical" 20,000 mark for the first time at some point today. Much of the enthusiasm in the U.S. markets centers around President Donald Trump's slew of executive actions that are rolling back the burdensome regulatory regime put in place by the previous administration.
Yesterday, Trump signed off on a pair of oil pipeline projects, the Keystone XL and Dakota Access pipelines. Both of these projects have been in the news consistently due to protests against their continued construction. Environmental groups and Native American rights activists are opposed to the expansion of the pipelines. Nonetheless, the move is line with Trump's pro-business agenda, including the rolling back of onerous regulations and red tape.
Currencies, Crude Oil
The precious metals fell even as the U.S. dollar continued to show weakness, a theme that has repeated itself of late. The dollar is in a three-week downtrend and fell to a seven-week low below 100.0 on the DXY index yesterday. After clawing back some of these losses overnight, the greenback was down about 0.15% against its peers on Wednesday morning. The Japanese yen and British pound both advanced against the USD, while the euro was mostly flat about $1.07.
Crude oil prices are still trending lower. March futures for both the WTI crude and Brent crude price benchmarks were down more than 1%. One of the potential outcomes of the OPEC production cut, if it indeed remains in place, is that U.S. oil exports could present a better bargain for countries in the East than oil of comparable quality from the Persian Gulf states.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.