Gold hit a three week high of $1,233 an ounce in early morning trading, before a better than expected first-time jobless report muted the rally.
The dollar, which had dropped below 85 on the DXY index, caught a breather, but was unable to break into positive territory.
Stocks in Europe were revived by the jobless report, after giving up gains sparked by the FOMC minutes released yesterday.
Gold held onto yesterday's gains in Asia and Europe, while silver surged strongly overnight before catching a correction at the COMEX open to trade up modestly. Platinum built on slight gains in Europe, while palladium rose over the $800 mark.
The 10 am spot prices in New York are:
Gold up $5.80 to $1,227.30 Silver up $0.22 to $17.60 Platinum up $8.00 to $1,282 Palladium up $4.00 to $803
The DXY dollar index is barely above unchanged, up 0.02% at 85.3120
Yesterday in the Markets
As expected, the big news yesterday was the release of the minutes from the September FOMC meeting. Markets were caught off guard to find that as early as last month, the Fed saw the sharply stronger dollar and economic slowdown in the EU and China as substantial threats to economic recovery in the U.S.
Stocks, which had been struggling to stay in positive territory, jumped afterwards, lifting the S&P 500 up from an eight-week low to finish up nearly 34 points. The Dow regained Tuesday's big losses, up nearly 275 points, while the Nasdaq rebounded 1.9%.
Gold lept upwards, fueled by the suddenly dropping dollar. The rally eased slightly in late trading to gain "only" $13.20 and close at $1,221.50. Silver was also up a bit more than 1%, gaining 19 cents to close at $17.38. The PGMs saw another good day, with platinum gaining $18 and palladium easing back $8 right before the bell to close up $16 at $799.
The dollar was hit hard by the Fed's concern over its strength, giving up .47%. Treasuries, which had been losing ground, reversed after the FOMC minutes, with the yield on the 10-year dropping to 2.32%.
Economic News Affecting Gold
This morning's first-time jobless claims came in at 287,000, the same as the previous week. The previous numbers were adjusted upward by 1,000, so technically the newest numbers fell by 1,000. Analysts expected an average of 291,000 people to be fired last week.
The news helped European stocks recover in late trading, and pulled gold down from a three-week high to trade slightly above unchanged.
The Russian ruble closed above 40 to the dollar for the first time yesterday, despite the dollar's late weakness and the fact that the Russian central bank has dumped $2 billion of its foreign currency reserves into buying rubles just this week alone. The Russian central bank has spent $55 billion this year in an attempt to stave off Weimar-style hyperinflation and to support state-owned industries hit by sanctions levied over Russia's seizure of Crimea and support of pro-Russian rebels in Ukraine.
The Russian economy is further pressured (along with the OPEC nations) by oil prices that continue to drop. West Texas Intermediate has fallen below $87 a barrel, while Brent crude is under $91. The falling crude prices are also putting a crimp in revenues for Norway and the UK.
Stocks in Japan were down on the stronger yen, which hurt exporting companies. Some analysts are wondering if the Fed's public concern over a too-strong dollar means that another round of currency wars is about to break out. If so, would that mean a return to QE, or just keeping overnight rates low for the foreseeable future?
Geopolitical News Affecting Gold
Riots in Turkey have spread beyond the ethnically Kurdish areas of southeast Turkey into the capital of Istanbul itself. Turkish Kurds are violently protesting as the terrorist army of ISIS conducts a brutal campaign against Kurds in Syria in areas bordering Turkey. The Turkish Kurds want the army to cross into Syria to fight ISIS, but the Erdogan administration knows that it could not possibly secure the many hundreds of miles of border adjoining ISIS-held territory in Syria and Iraq.
NATO officials responded to criticism of Turkey by other nations involved in the fight against ISIS, noting that it was unreasonable to expect Turkey to conduct a ground war in Syria alone, while the other nations simply flew airstrikes.
Pro-democracy protest leaders in Hong Kong are trying to rally protestors to return to the streets as the government cancels promised talks, but turnout is expected to be only a fraction of the numbers seen at the height of the demonstrations.
Tomorrow will see the Bank of Japan policy meeting minutes, which will be released tonight, US-time. Other reports include US export and import prices, and the Treasury budget.