Global stocks are being hammered this morning, as a HUGE miss for first quarter GDP in the U.S. throws markets into turmoil.
Gold, which has been seeing a light technical correction after gaining more the $30 an ounce over the last two days, saw a momentary blip upwards on the release of the GDP numbers, but is back to just under unchanged.
The dollar was down for the fifth day in a row even before the GDP report, and dropped sharply after its release before recovering to previous levels.
Yesterday in the Markets
Gold kept building on Monday's huge gains yesterday, finishing up another $10 to close at $1,211.80. Silver was up by 1.25% after gaining more than 4% on Monday. Platinum, which notched a $23 gain on Monday, was up $10, while palladium, which was up $8 Monday, ended down $2.
The dollar had another fairly bad day Tuesday, digging a deeper eight-week low as traders interpret lousy economic data as indicators that the Fed will not raise interest rates any time soon.
The Dow and S&P 500 recovered slightly on Tuesday, after being hammered by the worst consumer confidence report in four months. The Nasdaq was pulled lower in the afternoon by a drop in Apple, which despite a good earnings report, saw its price fall by 1.6%.
Factors Affecting Gold Today
The abysmal GDP reading for the first quarter, which came in at 0.2% against an expected 1.0%, pretty much puts the kibosh on any rate hikes by the Fed in the next few months. Still, with there being no Yellen press conference this afternoon after the FOMC meeting adjourns, the markets will be desperately parsing every word of the committee's 2pm statement. Watch for volatility this afternoon, as the high frequency trading computers react to certain words in the statement, before humans read it and make their own interpretations.
Any technical correction we see in gold today will be muted by continued weakness in the dollar, caused by expectations that the Fed will not raise interest rates (which would strengthen the dollar) until economic news improves.
Economic sentiment in the European Union came in mostly unchanged today, but stress levels in the markets there are heightened by increasing anxiety over whether Greece can come to terms with its creditors before its money completely runs out. The government in Athens has seized cash reserves from local governments in a desperate attempt to meet bills that are immediately due, but that's a trick they can only pull once.
The weekly report on U.S. crude stockpiles is due this morning, which may move the oil markets. This may have a spillover effect for gold.
Tomorrow will give us more Greek Drama, doubtlessly, but also consumer prices and unemployment for the EU as a whole.
In the U.S., first-time jobless claims, and personal income and spending reports are due.