Gold saw some profit-taking on Thursday morning but recovered when trading opened in New York. The selling was hardly unexpected after a two-week rally for the precious metals. Gold prices fell as low as $1,309/oz early this morning but traded back above $1,315/oz at the time of writing.
Spot silver likewise rose when the trading session in North America began, returning to $17.16/oz—back where it started yesterday morning. Platinum was up 0.4% to nearly $960/oz and palladium rallied another 1.6% to break past $1,095/oz. After an impressive rise of more than 50% over the course of 2017, palladium has come out of the gates strong in 2018.
Weekly jobless claims were reported by the Department of Labor on Thursday. The data showed that new filings for unemployment benefits rose by 3,000 last week to 250,000. This was worse than had been expected. However, the statistics for several states were merely estimated as many government services around the country have been cancelled due to inclement winter weather.
In fact, the extreme winter storms along the U.S. east coast have forced many businesses, schools, and non-essential public services to close. The subzero temperatures and excessive snowfall are also causing energy prices to spike. Natural gas prices surged along with crude oil. WTI crude briefly moved above $62 per barrel before falling back.
Commodities in general have been on a tear. Bloomberg's commodity index has moved higher for 15 consecutive days, its longest winning streak on record. The sector finally traded just slightly in the negative this morning, which is also likely a result of profit-taking. Prices for commodities have gotten a lift from a falling dollar. The USD was about 0.35% lower on the DXY index on Thursday, registering at 91.8. This time a year ago, the index was above 100.
The weaker dollar coupled with positive manufacturing data in Europe helped the euro rally almost 0.6% to $1.208, approaching its highest in three years. Stocks in the eurozone were also sharply higher. Shares in Asia closed higher overnight, especially in Japan, where the markets surged as much as 3% during the first trading session this week returning from holiday. Wall St headed better than 0.4% higher in early trading, with the S&P 500 leading the other two major indices—all three of which were at fresh all-time highs. Investors seemed to be shunning bonds in favor of stocks as annual earnings reports are soon to be released. The 10-year T-note yield rose three basis points to 2.47%.
One major revelation in the news on Thursday was that security vulnerabilities may be affecting more than 90% of the computer processors in the world. Two separate cases came to light, one involving a flaw in computer chips themselves that could expose any personal information stored on the computer or smartphone to hackers. The problem is more difficult to solve because it deals with the physical hardware itself and cannot simply be adjusted in computer software.
Looking ahead, the monthly nonfarm payrolls are due out tomorrow. In terms of monetary policy, the most recent FOMC meeting minutes that were released yesterday afternoon indicated the Fed is upbeat about the economy and forecasts three more interest-rate hikes in 2018. The markets are currently placing better than 60% odds of a rate hike coming at the Fed's meeting in March.
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