Gold immediately jumped $5/oz when the Asian markets opened overnight, on strong demand from China. The yellow metal broke the $1,310 level in Europe, and tested $1,315 on the New York open, a three-week high.
While the escalating violence in Ukraine is a major factor, fundamentals for gold were strengthening on Friday. Gold mining stocks gained noticeably, which is usually a precursor to a rise in precious metals.
Silver is slightly higher this morning, and platinum is moderately higher after gaining in European trading. Palladium eased after early gains in Asia, but rebounded in Europe to near-unchanged this morning.
The big news in of course all about Ukraine, where pro-Russian and pro-Ukrainian demonstrators battled in the streets in the important port city of Odessa. The conflict culminated in over 40 pro-Russians being trapped in a burning building, where they died. Ukrainian army patrols in the east of the country are being ambushed by pro-Russian paramilitary forces, resulting in the deaths of 4 soldiers.
On the economic front, the HSBC China manufacturing PMI came in at 48.1, nearly flat from March. Analysts were expecting a slightly better 48.3. Beijing is in the middle of a massive economic pivot, to change the nation from an export-driven economy, to a domestically-driven one.
The combination of Ukraine and China sent the yen to a two-week high, on a day when Tokyo markets are closed for holiday. The dollar has fallen below 79.5 again on the DXY index.
In Europe, the composite EU Producer Price Index fell 0.2% from March, and was down 1.6% year to year. This is increasing concerns about deflation in the common market, which is being driven by Greece and other distressed southern European nations as they attempt to restructure their economies to be more competitive. ECB officials did mention that the nascent economic recovery is bringing unemployment down faster than expected, so they have that going for them.
London markets are also closed today for a bank holiday. This will have an effect on volumes, that should be mostly picked up by the COMEX, Hong Kong, and Shanghai exchanges.