Most members of the precious metals team started the midweek session a tad higher this morning; however their initial gains did not endure and the complex soon slipped into the red (except in the case of palladium, as of this writing). Spot gold opened with a feeble gain of 70 cents per ounce and was quoted at $1,589.50 in New York. Within the first 20 minutes of trading the yellow metal approached its overnight lows near the $1,582.00 mark however.
Silver started the day on the downside, showing a 29-cent loss at the $38.72 level per ounce. The near $2 swoon in the white metal on Tuesday was reminiscent of the early days of May when it fell some 8% in but a few trading sessions. Nothing new in the world of volatile silver; it remains investment nitroglycerine and needs to be handled with the same degree of care as an old crate of the stuff.
Copper fell 0.38% this morning while crude oil gained $1.14 per barrel, approaching the 98.75 level on the back of speculative fund purchases after reports showed a decline in US stockpiles of black gold. Some wrangling by the gold bulls versus the bears might well be in the cards as the $1,600.00 level presents a desirable attack target for each market animal. Thus, expect fits and starts, stalls and flights to remain on tap.
Platinum and palladium each added $3 at the market’s opening bell and chimed in with bid-side quotes of $1,769.00 and $789.00 per ounce, respectively. Rhodium showed no change, still quoted at $1,975.00 the ounce. We covered the noble metal in some detail yesterday, but we might add that the reader would also benefit from parsing market analyst Ned Schmidt’s latest article on it, to be found right here.
In the markets’ background, the US dollar was still lower this morning, slipping 0.26 to 74.88 on the trade-weighted index and losing ground against a firming euro. The latter climbed this morning on perceptions that tomorrow’s EU summit on the pesky issues of Greece and assorted other PIIGS debt might just yield some “big” set of solutions. At least, that is what several financial papers have come to expect/demand from the meeting. French President Sarkozy and German Chancellor Merkel will meet on the issues on the eve of the emergency summit slated to take place in Brussels.
Gold slipped and remained under the $1,600.00 mark in the wake of rising optimism that the US budget ceiling talks might be coming closer to a positive resolution prior to the deadline of August 2. President Obama let it be known that he is supportive of a $3.7 trillion plan to cut US deficits. The so-called “Gang of Six” program is not yet certain to become approved, as US House Republicans continue to make much noise that seems to oppose anything resembling a compromise.