|Day's range||1,786.40 - 1,788.50|
Stock rose on Thursday, as investors cheered the resiliency of a U.S. economy that created nearly 5 million jobs last month in the throes of the raging coronavirus pandemic.
(Bloomberg) -- The chaos that engulfed the gold market in March as the global pandemic choked off physical trading routes is rippling through other precious metals, resulting in price dislocations and a surge in exchange inventories for silver and platinum.The gold market was thrown into turmoil in March as lockdowns grounded planes and closed refineries, leading traders to worry they wouldn’t be able to get gold to New York in time to deliver against futures contracts. That caused futures, which typically trade close to the London spot price, to soar to a premium, inflicting losses on banks that struggled to close arbitrage bets and spurring them to shift some positions out of New York futures.There are signs that the dynamic isn’t limited to gold. Silver and platinum futures have traded at elevated levels relative to spot metals since early April. And as in the case of gold, the premiums are spurring big increases in on-exchange inventories in New York.On Monday, first-notice data for the July silver contract on the Comex in New York showed the largest single day of deliveries in almost 25 years. Deliveries for platinum on the New York Mercantile Exchange were more than five times the next largest month this year.Those deliveries serve as a way for banks to reduce their exposure to price dislocations and limit risk, said David Holmes, a senior vice president at Heraeus Metals New York, a precious metals refiner.The blowout in gold spreads earlier this year led to big losses for some banks, which typically sell futures in New York as a hedge for their positions in the London over-the-counter market. HSBC Holdings Plc. lost $200 million in a single day of trading, illustrating the challenges to banks due to the turmoil in the exchange-for-physical price, or EFP. Wider SpreadsSilver and platinum have been seeing similar price differentials. The spread between silver futures and spot prices ended the second quarter at the highest in nearly four decades. Platinum’s EFP spiked to the highest since early 2008. And palladium had the largest spread on record, dating back to late 1993.The turmoil caused stockpiles to jump amid efforts to meet the apparent shortages. On-exchange inventories for silver and platinum surged to a record and remain close to those levels.Meanwhile, futures positions have been shrinking in the wake of the pandemic-induced dislocations, creating a glut of metal akin to gold’s stockpiles. Platinum open interest, a tally of outstanding futures contracts, is near the lowest in eight years and is down more than 56% from a peak in January. Open interest in silver futures is down nearly a third from a February high. Gold positions reached the lowest in a year before recovering, while palladium is at a more than 16-year low.“If a bank is short, it’s hard to close the arbitrage,” Holmes said. “Therefore, instead of increasing their position as the arbitrage grew wider, they’ve had to either hold constant their position or even reduce it.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Gold finished up on Thursday and not too far from $1,800 highs hit earlier in the week as the safe-haven crowd stayed loyal to the precious metal despite upbeat U.S. jobs numbers for June. The real-time indicator of bullion prices scaled $1,789.48 on Wednesday, a peak since the record high of $1,920.85 achieved by bullion in September 2011. Gold rose for a fourth straight week despite a surge in risk appetite earlier in the day on Wall Street, sparked by the U.S. Labor Department’s non-farm payrolls report showing the economy added 4.8 million jobs in June versus a forecast growth of 3 million jobs.
Crude oil markets have been extraordinarily quiet over the last several days, and Thursday was going to be no different. We are currently stuck in a major range.
Helping to underpin crude oil prices this week were a pair of bullish reports from the (API) and the (EIA).
Natural gas markets gapped higher to kick off the trading session on Thursday, and then went back and forth to show a lot of volatility.
Gold markets have fallen a bit during the early hours on Thursday but has turned right back around to show signs of support near the $1765 level.
The British pound rallied significantly on Thursday but ran out of steam as the jobs number came out much better than anticipated in the United States.
The British pound rallied slightly during the trading session on Thursday against the Japanese yen as traders continue to grind this market a bit higher.
The Australian dollar rallied a bit during the trading session after the jobs number came out in the United States better than anticipated.
Silver found itself under pressure after the release of U.S. employment reports.
After bearing the brunt of the slowdown in industrial activity inflicted by the coronavirus pandemic, silver recently lately regained ground owing to the pickup in industrial activity.
Bitcoin is decentralized, good in an emergency, supported by passionate fans and not likely ever to see mainstream adoption, says our columnist.
S&P; 500 futures are gaining more than 1% in premarket trading as the economy added 4.8 million jobs in June.
The direction of the August WTI crude oil market on Thursday is likely to be determined by trader reaction to the 50% level at $39.36.
The direction of the August Comex gold futures contract on Thursday is likely to be determined by trader reaction to the 50% level at $1780.90.
Daily forecast and trading signals of forex majors, commodities, cryptocurrencies and indices.
Initial jobless claims are declining painfully slowly. The disconnect between the choppy recovery and financial markets creates upward risk for gold.
GBP/USD continues to show a strong correlation with the equity markets and is seen following stocks higher for a move above the 1.2500 handle.
The direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the pivot at .6933.
Demand for bitcoin is up in India, thanks in part to the economic crisis. But Indian tech startups are more focused on Ethereum.