Thus, volatility continued to be on display in the precious metals, crude oil and currency markets as the world watched the unfolding of momentous events across parts of Africa and the Middle East. Following yesterday’s climb up the wall of Tunisian revolutionary worry, gold and silver both fell back somewhat due to early New York-based profit-taking. This morning’s decline in gold was the first such change in direction in seven days, although the $1,400 level managed to remain in focus (and still standing) during the early minutes of trading.
The markets opened with a $3.90 loss in gold (quoted at $1,403.00 per ounce on the bid side) following an earlier dip to near the $1,390.00 mark. Some of the retreat in bullion was chalked up to the continuing and mounting safe-haven bids that were flowing in the direction of the US dollar amid the turmoil in Tripoli. Although not quite ready to note a change in trend, some traders remained on the cautious side as the situation remains fluid and as news flows are being monitored with one hand on the trading button.
On the other hand, sizeable unwinds in silver (down 102 cents, or 3.01%, to $32.89 at last check, nearly undoing Monday’s hedge fund-driven frenzy) and the noble metals were clearly attributable to the cashing in of some mighty profitable chips by assorted fund players who had seized the opportunity provided by the spreading social unrest in various nations to push prices aggressively higher in recent sessions. UBS reports that it estimates a 31 million ounce surplus in the silver market for the current year.
Platinum dropped $31 to touch the $1,816.00 mark this morning, while palladium slipped $23 lower to reach the $832.00 level per ounce. Rhodium was off by $25, but was still showing $2,400 on the bid side this morning. No such problems for crude oil on the other hand, this morning. Black gold advanced $6.67 (7.7 percent!) to the $92.82 level per barrel as the threat of supply disruptions remains at front and center among traders of the commodity.
The Dow fell fairly hard (75+ points) this morning as an amalgam of jitters over the Middle East situation and how it might affect the economic recovery, the latest findings by Case-Shiller, pointing to a 2.4% y-o-y drop in US housing values, and declining sales at the world’s largest retailer – Wal-Mart – put a damper on recent equity market enthusiasm. Some of the losses were recouped in the wake of the best US consumer confidence reading levels in three years’ time. The index leaped to the 70.4 level even as the view remains in place that current US economic conditions could, indeed, be better than they are.