Gold prices have recovered from overnight losses this morning, to start the day near Wednesday's pre-Thanksgiving close. Trading volumes across the board are expected to be very light, as most traders are taking a four-day Thanksgiving holiday. Silver prices are showing modest gains from Wednesday's close.
Spot gold prices are testing the $1,190 level from the underside this morning, while spot silver is building on a firm base of $16.45 that was shored up overnight. Commodities in general are getting a reprieve from the recent dollar rally. The DXY dollar index, which tracks the USD against a weighted basket of six major currencies, has given up the overnight high of 101.90 to trade as low as 101.25 this morning. Wednesday saw the dollar lock down multi-month highs against the yen and euro to push the DXY to its highest point since March 2003.
Wall St is looking to build on all-time highs hit Wednesday, opening higher in thin trading. The Dow rode minor gains throughout the day Wednesday to end at its third record close in a row going into the Thanksgiving holiday, while the S&P 500 struggled in the red until barely making it above unchanged at the last minute, gasping to a new record of its own. The Nasdaq was not so lucky, dropping 0.1% on weakness in the biotech sector. The small-cap Russell 2000 gained 0.6% Wednesday to hit another record high, extending its rally to 14 sessions. This is the index's longest winning streak since 1996, and a record of setting new all-time highs for eight sessions in a row.
Bonds are continuing their post-election free-fall that started the day after Donald Trump's victory. The yield on the benchmark 10-year Treasury note is at 2.36% in early New York trading. Yields spreads are widening in Europe, as the odds of the collapse of the Italian prime minister Matteo Renzi grow. Renzi has staked his political existence on the success of a referendum to amend the Italian constitution to reduce instability and inaction in the government.
Oil prices were pulled in two directions Wednesday, as a small drawdown of US crude stockpiles was counteracted by reports of active US oil rigs increasing by 3. This comes a week after oil markets were rocked by a huge jump of 19 more rigs beginning operation. There have been 33 onshore oil rigs put into production in the US in the last month.
January contracts for West Texas intermediate settled just below the $48 mark Wednesday, while January Brent crude futures ended just under $49 a barrel. Opinions of whether OPEC can actually forge an agreement to support oil prices by cutting production (and how much cheating will occur) has been whipsawing oil prices.
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