A renewed slide in gold prices commenced shortly after the release of the Fed’s Beige Book on Wednesday afternoon and it then intensified into Thursday with the parsing of the Bernanke Congressional testimony.
The worst month for gold prices in 30 years was suddenly followed by the best daily climb since last August on Friday, the first day of the new month. The principal catalyst for the $66 upward move in bullion was the unexpectedly dismal report on May’s US job creation activity.
This morning’s opening in precious metals was showing gold prices marginally higher, spot silver bids somewhat lower, and some mild gains in platinum and palladium. Rhodium fell $25 to $1,275 per ounce.
Gold prices rallied by more than 2% on Thursday and by nearly 1% early this morning as the US dollar appeared to slow its upward progress on the trade weighted index. Nevertheless, the dollar – trimmed gains and all – was still up for a 15th day in a row in pre-market action.
Commodity prices are trading broadly lower in European hours as risk aversion grips financial markets, weighing on sentiment-linked crude oil and copper prices while boosting the safe-haven US dollar to put de-facto downward pressure on gold and silver.
The US dollar and stock index futures frowned upon the GDP estimate and headed lower. The development may give gold players another chance at trying to go for the assault on the $1,660-$1,675 resistance area.
Little in the way of real change was noted this morning as the final session of the week got underway in New York. Spot gold hovered around $1,645 while spot silver appeared stuck around the $31.75 area.
It is often stated that copper is the metal with a Ph.D. in economics, and the data for the most part bears this out. The breakdown in the price structure of the Bullish Consensus for copper strongly suggests lower prices for copper, which in all likelihood implies a recession.