Gold prices were knocked out of their recent tight trading range in New York this morning, as a clutch of stop-loss orders were triggered. This sent spot gold down over $10 an ounce and spot silver down 20 cents.
This morning's reversal was encouraged by a moderately stronger dollar. The British pound is also rallying, giving a one-two punch to the euro. The dollar was essentially flat yesterday, much like most other markets, as investors remain skittish ahead of the global central bankers' meeting in Jackson Hole, WY.
Wall St has given back yesterday's gains this morning, but volatile action today means it is too early to call a direction. Oil prices are being pressured by the US dollar, as well as yesterday's surprise gain in US crude stockpiles reported by industry trade group the American Petroleum Institute.
Tuesday Market Action
Gold prices yesterday saw spot gold log a marginal loss, down $1.70 to $1,336.90. December gold futures gained $2.70 to settle at $1,346.10 an ounce.
Spot silver lost nine cents to end at $18.78, while September silver gained 6.3 cents to settle at $18.922 an ounce.
Yesterday's announcement of a surprise build in US oil stockpiles of 4.5 million barrels compared to expectations of a 500,000 barrel draw came after oil futures had settled for the day. Oil rode rumors higher yesterday that Iran might agree to a production cut. WTI gained 1.5% to settle at $48.10, while Brent finished up 1.6% to end at $49.96 a barrel.
Stocks were basically flat Tuesday, as most traders hit the sidelines ahead of Fed boss Janet Yellen's speech at the Jackson Hole central bankers' conference at 10am Friday. The Dow ended up by 0.1%, the S&P 500 gained 0.2%, while the Nasdaq was the winner, with a gain of 0.3%.
On the Brexit front, Deputy leader of German Chancellor Angela Merkel's conservative Christian Democrats party Michael Fuchs said that Britian's attempts to keep unfettered financial access to the EU would not succeed. Called "passporting," it allows any EU bank to trade throughout the Common Market with no need to establish operations and headquarters in each member nation.
Fuchs said that the issue was non-negotiable, stating “If you’re member of a club you have certain benefits, but if you’re out, you will not have the benefits any more,” He continued, “I really think this is something that’s not negotiable, the so-called banking passport.”
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