BREAKING: Reuters India is reporting that the Indian government is set to scrap the controversial "80:20" gold import rule, according to television stations are are citing government sources.
Saudi Arabia blocked motions by smaller producers at yesterday's OPEC meeting to reduce production levels for the oil cartel.
Crude oil futures took a nosedive, with West Texas Intermediate hitting an intraday low of $67.75, and Brent crude dropping to $71.12. Currencies of oil-producing nations such as Canada and Russia plummeted, as did precious metals. This led the dollar solidly higher. The yield on the 10-year Treasury note hit 2.20% this morning, as foreign money runs to U.S. bonds due to the increased deflationary pressures in the EU and Japan due to the OPEC decision. Consumer prices in the EU rose only 0.3% in October, matching a five-year low. Inflation fell for the third month in Japan, due to falling oil prices.
Yesterday in the Markets
U.S. markets were closed Thursday for Thanksgiving holidays.
Gold is retesting the $1180 level after the OPEC decision trashed crude oil prices, and increased deflation fears in Japan and the European Union. Petroleum-related stocks are down, world-wide.
Wednesday's closing numbers:
Economic News Affecting Gold
The big economic news is of course the OPEC decision. Smaller OPEC members such as Venezuela, Iran, and Algeria wanted Saudi Arabia and the Gulf states to cut production to raise prices, but didn't want to cut production themselves. This idea was nixxed by Saudi Arabia.
The Gulf States have enough billions socked away to let the market work through the current supply glut. They also see the present conditions as a weapon to hamper expansion of oil drilling and production in rivals such as Russia and the U.S. fracking companies.
Geopolitical News Affecting Gold
There is little on the immediate horizon affecting gold, except Sunday's Swiss gold repatriation referendum. Even though market watchers say a "no" vote is already priced in, gold is vulnerable to pressure if the vote actually does fail.