After plunging in the wake of Wednesday's meeting of the Federal Reserve, gold was sharply higher in early trading, again testing the $1,300/oz level that has flipped from support to resistance. However, spot gold was only up about $5 by the time action got going in Western markets, trading above $1,295/oz.
Spot silver crept 2¢ per ounce higher to $16.95/oz while platinum lost 0.3% to $933/oz. Palladium was slightly above unchanged at $909/oz.
It appears that the main impetus for the modest rebound for gold on Friday is yet another threat of nuclear weapons testing from North Korea. President Trump's recent appearance at the United Nations in which he pulled no punches about how the United States would respond to further provocations from the rogue DPRK likely prompted the Kim regime's bellicose response. In addition, the president announced new economic sanctions against North Korea, poking the proverbial bear.
Back at home, the calm in the markets that seemed to accompany the Fed decision proved short-lived. On the heels of the massive Equifax security breach that compromised the personal and credit information of more than 140 million consumers, news broke of another potentially devastating cyber attack: The Securities and Exchange Commission—the agency tasked with policing Wall St—also revealed this week that it was the victim of hacking last year.
Ironically, the SEC had been warning the corporate world to bolster its defenses against just such a data breach. In this case, the stolen information could very well have been used for insider trading. It's also telling that, just like the Equifax case, the SEC took quite a while to make the hack public. Aside from having to eat crow about not following its own advice, the incident could shake investor confidence and lead to more safe-haven demand for gold, at least in the short run. All three U.S. stock indices opened about 0.1% in the red.
Shares in Asia also sank lower overnight, led by a 0.8% decline in Hong Kong and 1.2% slump in Taiwan. European markets were generally in positive territory this morning. Meanwhile, the U.S. dollar slipped about 0.3% lower on the DXY index to a shade below 92.0. After easing considerably following the FOMC meeting, the 10-year Treasury yield fell 1 basis point to 2.25% on Friday.
Another key development has been the seasonal rebound for the energy market. Crude oil has been on a steady rise all summer, up better than 25% since June. WTI crude is holding above $50 per barrel while Brent crude, the benchmark on the other side of the Atlantic, is trading near $56.50/bbl. The fact that OPEC, Russia, and other major oil-producing nations agreed at a gathering in Vienna, Austria to leave production cuts in place should also buoy crude prices as summer gives way to autumn.
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