Gold saw sudden profit-taking in late morning trading in New York, after breaching a four-week high at the $1,255 mark. Silver caught a bit of the downdraft, but the PGMs were unaffected. Earlier overnight trading had seen gold and the PGMs lower in Europe after gaining in Asia, but the loss had been made up before the New York market open.
Supply concerns are still supporting platinum prices, as the state-run electrical company in South Africa is once again unable to meet demand, even while the price they charge for power continues to skyrocket. This is on top of labor demands for massive pay hikes in an industry which has been battling higher costs and lower prices for its goods.
The dollar is up in volatile trading for the first time in four days, after seeing a sharp sell-off in Europe that was quickly negated. The dollar is stronger against the yen, but weaker against the euro and yuan this morning.
Retail sales in the U.S. were reported up 0.2%, despite the coldest December in four years that led officials in the northeast to warn people to stay indoors. Core retail sales (excluding energy and cars) rose 0.7%. This helped Wall St. higher, a day after the S&P500 saw it’s worst drop in two months.
Atlanta Fed President Dennis Lockhart yesterday told an audience that the Fed needed to continue its plans to taper its month bond and mortgage-backed securities purchases that have swollen its balance sheet to over $4 trillion. The planned $10 billion a month decrease in “money printing” is only a 12% cut, and is mostly symbolic at this point in slowing the devaluation of the dollar. If the Fed has the fortitude to continue to scale down its quantitative easing program and end it by the end of the year, it should stop the hemorrhaging of the purchasing power of the U.S. citizen.