Gold Tumbles Back Below $1,260 | July 10, 2018
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Gold Tumbles Back Below $1,260

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Gold Tumbles Back Below $1,260

Spot gold dropped overnight, briefly slipping below $1,250 before recovering somewhat this morning.

The yellow metal was down 0.3% (-$3.50) to trade at about $1,254/oz when markets opened in New York.

Spot silver dipped 0.25% to $16.04/oz in the meantime.

Platinum was off 0.8% (-$7) to $842/oz.

Palladium slumped over 1% (-$10) to trade back at $944/oz, maintaining roughly a $100 spread with its sister metal.

American Alliance With Europe Tested

Second-quarter earnings are starting to be reported, and will now dominate the financial news this week. Profit growth during Q2 is projected to top 20% for companies listed on the S&P 500.

The rosy outlook for earnings should help equities continue their recent climb. The Dow Jones added more than 320 points yesterday.

Earnings optimism is also lifting stocks in the EU, which are on track to post their sixth straight day of gains. Shares were up about 0.4% in Germany and rose better than 0.5% in France.

However, disappointing economic data in Germany sapped some of the momentum for stocks from earlier this morning.

Of course, tariffs from each side are still driving a wedge into the relationship between the U.S. and Europe. Aside from trade, President Trump has been critical of NATO and expressed frustration with European partners over how the organization's defense needs are funded.

This has thrown the trans-Atlantic alliance into some peril.

Trump is currently meeting with leaders in Europe this week prior to a scheduled one-on-one meeting with Russia's Vladimir Putin later this month. Predictably, the president has been admonished by Brussels for not respecting America's allies in the EU.

Dollar Bounces Back, Oil Rallies

Crude oil prices overseas jumped higher this morning after oil workers in Norway went on strike. The disruption pushed Brent crude up more than 1.3% (+$1.05) as the benchmark poked above $79 per barrel.

WTI crude was up about 50¢ (+0.65%) to $75.35/bbl. Shanghai medium sour crude rose 9.4 yuan (+$1.42) to trade at CNY 509.34, or $76.76, per barrel.

The disappointing numbers for economic sentiment in Germany were coupled with weaker industrial production in France, dragging the euro back down to $1.17. Yet home prices accelerated at their fastest pace in 11 years in the eurozone during the second quarter.

With the softer euro, the dollar index rebounded 0.2% to just shy of 94.3.

Bonds fell Tuesday. The 10-year T-note yield gained one basis point to 2.87%.

The yield on Britain's 10-year Gilt jumped five basis points higher to 1.30% as Prime Minister Theresa May's strategy for Brexit remained unclear. The pound sterling held steady at $1.327.

Japan's two major stock indices ended comfortably in the green while equities closed mostly unchanged in China and Hong Kong overnight. The Japanese yen slumped 0.35% lower to ¥111.2 per USD.

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.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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