Gold prices are higher and hit a 3.5-month high in early U.S. trading Thursday. Add the slumping U.S. dollar index to the list of bullish elements helping to drive gold and silver prices north recently. Silver prices also scored a 3.5-month high Thursday. Safe-haven and technical buying continue to support the yellow metal amid volatile world stock markets that presently have a downside bias. April Comex gold was last up $8.30 at $1,149.60 an ounce. March Comex silver was last up $0.096 at $14.83 an ounce.
World stock markets were mixed to higher Thursday, supported by a rebound in many raw commodity prices, led by crude oil. Oil prices showed solid gains Wednesday but Nymex futures prices were weaker and just below $32 a barrel Thursday. The sharply lower U.S. dollar index the past couple days has helped to lift raw commodity markets. A weak U.S. manufacturing report on Wednesday spiked the dollar index lower, and there is follow-through selling pressure on the greenback Thursday. Most raw commodities on the world market are priced in U.S. dollars. A decline in the value of the dollar makes those commodities less expensive to purchase with non-U.S. currency. U.S. stock indexes were pointed to modestly lower openings Thursday morning.
In other overnight news, the European Central Bank cut its growth projections for the Euro zone Thursday. The ECB cited slowing growth in China and other emerging markets as cutting into Euro zone economic growth. The ECB forecast annual economic growth of 1.7% this year, following a growth rate of 1.6% in 2015. The ECB had earlier forecast 2016 economic growth at 1.8%.
ECB President Mario Draghi on Thursday again warned the world about deflationary price pressures setting in. Draghi said the ECB will maintain its fight against deflation.
The Bank of England at its monetary policy meeting Thursday left its interest rates unchanged, which was expected by the marketplace.
The marketplace is awaiting Friday morning’s U.S. employment report for January. The key non-farms payroll number is expected to be up 185,000 following a strong rise of 292,000 in December.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, preliminary productivity and costs, monthly chain store sales, and manufacturers’ shipments and inventory.
This story originally appeared in Kitco by Jim Wyckoff on February 4, 2016. View article here.