The precious metals surged sharply late on Wednesday's trading session. Over the course of less than two days, gold has advanced roughly 2.67%.
Spot gold stayed above $1,350 an ounce this morning, adding 0.15% to $1,352.50/oz.
We could see a natural pullback during the day Thursday given that gold futures traded modestly in the red.
The next key resistance levels for gold (from a technical perspective) are above $1,370 per ounce.
A break above the 2017 high around $1,377/oz would trigger a great deal of technical buying.
Spot silver was flat at the opening bell in New York but traded above $16.80/oz.
Platinum was up 0.2% to about $1,000/oz while palladium jumped 1.1% (+$11) to $1,003/oz.
Big Day of Data for Factories and Industry
The Labor Department released its reading of the producer price index (PPI) on Thursday amid several other economic reports.
PPI rose 2.7% year-on-year in January, increasing 0.4% month-on-month.
Core PPI accelerated 2.5% over the last year, as well.
Producer prices are taken as an approximate measure of wholesale prices. Combined with a weaker dollar, a rising PPI is yet another indicator of gradually higher inflation.
This followed yesterday's news about the consumer price index (CPI) showing an uptick, as well.
However, new economic data on manufacturing disappointed this morning.
Manufacturing output was flat last month. Industrial output came in lower than anticipated, dipping 0.1% against expectations of a 0.3% increase.
December's numbers were nonetheless revised sharply higher from a 0.9% loss to +0.4%.
In a separate report, the Department of Labor also announced weekly jobless claims on Thursday.
First-time claims were up 7,000 last week to 230,000. The slight increase didn't change the current trend of rather low unemployment.
Markets Still Weighing Impact of Inflation Expectations
Stock futures in the U.S. pointed up today after shares closed much higher in Asia last night and traded solidly in the green in Europe this morning.
Inflation expectations will likely continue to influence trading behavior over the short-term given that there are multiple inflationary pressures that are driving wholesale and consumer prices higher.
Wall St has shrugged off these concerns this week. Wednesday saw the fourth straight day of gains for U.S. indices.
The 10-year Treasury yield, meanwhile, spiked as high as 2.94% before falling back between 2.91% and 2.92%.
Crude oil has picked up some of the volatility that's spread around the broader markets.
Both oil benchmarks gave back some of Wednesday's gains due to rising output and a growing supply in the West.
In addition to climbing crude inventories, daily U.S. oil production is now exceeding that of Saudi Arabia.
To counteract this flood of supply, OPEC is still reiterating its commitment to curbing production.
WTI crude was off 0.75% to $60.15/bbl this morning. Brent crude lost 75¢ (-1.2%) to $63.60/bbl.
In currencies, the South African rand jumped as the country's unpopular president, Jacob Zuma, finally stepped down after months of speculation.
The rand has surged 15% against the British pound from its November lows as anticipation built for President Zuma's ouster (and pro-business reforms to follow).
The pound sterling was still up 0.5% against the USD to $1.407. The euro gained by half that proportion to $1.248.
Yet the biggest beneficiary in the forex trade of late has been the Japanese yen.
The yen rallied to ¥106.5 per dollar, hitting a three-month high.
Meanwhile the dollar was down almost 0.4% to 88.8 on the DXY index.
Looking to Washington, there's still a potential rift between the White House and Congress about how to handle immigration.
A political issue is also being made of the tragic school shooting that occurred at a high school in Florida yesterday afternoon. The attack left as many as 17 dead.
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