Gold claws up again from two-week lows

Global Stock Markets

Gold prices improves from a two-week low on Friday, with the metal generally tethered to the dollar this week, yet supported by persistent global political and trade tensions given the metal’s haven-asset status.

Trading across financial markets was subdued, with the indecisive action coming amid more expected turmoil in the Trump administration. Media reports said the president was planning to sack his national security adviser H.R. McMaster, which would be the second high-profile firing from the White House this week. Secretary of State Rex Tillerson was fired on Tuesday and replaced with CIA Director Mike Pompeo.

While personnel issues unfold, concerns over a possible trade war between the U.S. and key trading partners were still weighing on investors’s minds as well, analysts said. The White House said on Wednesday it will seek to trim the U.S.’s trade deficit with China by $100 billion, using tariffs. The European Union, meanwhile, was working to get the bloc exempt from the tariffs.

Early Friday, April gold GCJ8, +0.24% rose $3.00, or 0.2%, to $1,320.80 an ounce. Its finish at $1,317.80 an ounce Thursday was the lowest since March 1 and sets up the contract to finish the week down 0.2%, according to FactSet data.

The ICE U.S. Dollar Index DXY, -0.18%  was down 0.2% at 89.957 and down about 0.2% for the week. The index had churned in and out of positive territory. Gold and the dollar typically move inversely. A weaker U.S. currency makes dollar-denominated gold more attractive to investors using another currency; the reverse is true as well, with a steeper dollar typically weighing on gold.

The market has been confined in a relatively tight range and so, gold market-timers looking for a buy signal need a clearer bearish sign, writes Mark Hulbert in his latest column.

But once that signal emerges? “Consider the average recommended gold-market exposure level, as measured by the Hulbert Gold Newsletter Sentiment Index (HGNSI). March 2017 was the last time this average got close to the minus 30% level that have accompanied significant past bottoms. Gold bullion rose 8% over the subsequent three months,” he said.

Meanwhile, May silver SIK8, +0.38%  tipped 0.3% higher, tacking on 5 cents, to $16.47 an ounce. It is headed for a nearly 0.9% weekly loss, according to FactSet.

May copper HGK8, +0.42%  rose 0.3% to $3.1375 a pound. April platinum PLJ8, -0.05% lost 0.1% to $955.70 an ounce, while June palladium PAM8, +0.20%  was flat near $981 an ounce.

Among exchange-traded funds, the silver-focused exchange-traded iShares Silver Trust SLV, -1.02%  rose 0.6% and the SPDR Gold Shares GLD, -0.64% was down 0.3%. The VanEck Vectors Gold Miners ETF GDX, -1.29% shed 0.4%.

Sterling pulled back from a three-week high; dollar rebounds

European Stock Markets

Sterling pulled back from a three-week high on Wednesday after the dollar rebounded, and traders said investors were cautious about pushing the pound much higher until there was clarity on the terms of a Brexit transition deal.

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria 

The pound had risen to its highest level since Feb. 27 earlier on Wednesday when it hit $1.3996 against the dollar, before slipping back. It traded at $1.3949, down 0.1 percent, at 1620 GMT, while it was flat versus the euro.  

The dismissal of U.S. Secretary of State Rex Tillerson had undermined the dollar on Tuesday and into Wednesday, but the greenback recovered slightly as U.S. markets opened, even as data showed U.S. retail sales fell for a third straight month.

There were no economic data to drive the pound on Wednesday, and traders remained focussed on the Bank of England policy meeting next week and a European Union leaders summit where Britain has said it will announce a deal on its relations with the bloc immediately after Brexit.

Sterling hit $1.4346 on Jan. 25, its highest level against the U.S. dollar since Britain voted to leave the European Union in June 2016.

Though it has pulled back modestly from those highs, it remains near the top of its trading range of $1.20 to $1.43, buoyed by hopes a Brexit transition deal will be eventually be struck and a generally weaker U.S. currency.

Scotiabank said the pound had shown “signs of shrugging off recent weakness” with downside support to be found if sterling drops to $1.39.

Nasdaq Leads Futures Higher, But Coal Miner Tops IBD 50

Global Stock Markets

Stock futures set an optimistic premarket tone Wednesday, with tech stocks seizing an early lead as markets awaited February sales and inflation data.

Futures on the Dow industrials rose 0.4% above fair value, as Microsoft (MSFT) and Caterpillar (CAT) led the group but no single issue rose or fell more than 1% in premarket trade. S&P 500 futures were also up 0.4%.

Nasdaq 100 futures popped 0.6%, with Micron Technology (MU) and Adobe Systems (ADBE) up almost 2% each and setting the early pace. Small caps ran alongside Nasdaq futures, lifting Russell 2000 futures 0.6%.

Stocks rose for the first half hour of trade on Tuesday, then pulled back sharply, and Wednesday's action could very well continue to test the market's still-young uptrend.

The Dow has been unable to decisively retake its 10-week moving average since early February.

The S&P 500 has managed to hold above its 50-day for the past three sessions, but appears to again be facing a test near the 2800 level. The Nasdaq is clearly in the best technical shape, tapping out a new high Tuesday, then pulling back just enough to test support at its prior high, around 7500.

Markets in Asia traded lower, reacting to the White House's firing of Secretary of State Rex Tillerson on Tuesday and reports that it's considering widening the tariffs imposed on Chinese imports to the U.S. Hong Kong's Hang Seng Index ended down 0.5% and the Nikkei 225 in Tokyo fell 0.9%. In Europe, stocks held modest gains at mid-session.

Economic news could have come impact on Wednesday's trade. The Commerce Department reports retail sales and the Labor Department provides producer price data, both for February, before the open. The Energy Information Administration delivers its weekly oil inventories update at 10:30 a.m.ET.

Shares under pressure; Trade war concerns

Global Stock Markets

Shares were under pressure for a second day on Wednesday and the dollar held near one-week lows after a threat by U.S. President Donald Trump to slap $60 billion in tariffs on Chinese imports rekindled investors’ concerns about the economic growth outlook. 

Equities attempted to recover after Tuesday’s hefty losses, heartened by robust Chinese factory data, with S&P500 futures signalling a firmer opening for Wall Street ESc1.

But markets struggled to overcome fears of a trade war and U.S. political uncertainty after Trump abruptly sacked Secretary of State Rex Tillerson.

The Tillerson news, coming days after the exit of Gary Cohn, a strong free trade proponent, had sent the dollar skidding, pushed world stocks lower and bond prices higher.

The moves accelerated after news of the planned tariffs, which reportedly target Chinese tech, electronics and telecoms.

The negative momentum faded somewhat in Europe, with a pan-European equity index up 0.3 percent after it fell 1 percent on Tuesday .

The index was boosted by a 1 percent jump in resources stocks which benefited from the Chinese data .SXPP as well as a 3-billion-euro share buyback at German sportswear firm Adidas (ADSGn.DE). 

That left MSCI’s all-country equity index down only marginally .MIWD00000PUS, its second day in the red and off one-month highs hit before news broke of Tillerson’s sacking. 

His departure brings to 35 the number of senior Trump administration officials who have left, Citi estimates. 

The dollar has been another casualty, though it swung 0.15 percent higher after three days of losses. U.S. Treasury yields traded just off one-week lows touched earlier in the session .DXY US10YT=RR. 

German 10-year government bond yields DE10YT=RR approached one-month lows and stand 20 basis points below this year’s peak, at 0.60 percent. 

Central banks in Japan and the euro zone, meanwhile, also stuck with their dovish message.  

The euro slipped 0.2 percent against the dollar, inching off an overnight one-month high EUR= after European Central Bank President Mario Draghi said the ECB needed more evidence that inflation was rising towards target.

Thais hope to get off Trump's trade hit list as Tillerson heads for Bangkok

Thai officials voiced hope ahead of a visit by U.S. Secretary of State Rex Tillerson of escaping U.S. pressure over the size of their trade surplus with the United States as their figures point to a jump in imports, but U.S. data shows little change.

A spokeswoman for the State Department's East Asia Bureau said Tillerson, who will be the most senior U.S. official to visit Thailand since a 2014 coup, will discuss a broad range of issues including security, trade and investment. 

Tillerson visits Bangkok on Tuesday after attending regional meetings in Manila at the weekend.

A narrowing trade gap would also reduce the risk of Thailand being labelled by Washington as a currency manipulator - the last thing Thailand wants as it struggles with a baht currency THB=TH that exporters find uncomfortably strong. 

According to Thai customs-cleared figures, imports rose 35 percent from a year earlier in the first six months of 2017 while exports to the United States rose 7 percent.

However, U.S. figures calculated using a different methodology showed little change in the gap during the first five months year on year. The U.S. estimate of a Thai trade surplus of $18.9 billion put it in 11th place on U.S. President Donald Trump's list of countries to be investigated. 

The growth in Thailand's imports from the United States this year was led by planes and parts, circuit boards, chemicals, metal and machinery and parts, the Thai data showed.

After being put on the U.S. list, Thailand defended itself with a 22-page justification that covered everything from its support for the United States in the Korean War to investment by U.S. companies in Thailand. 

About 40 percent of Thai exports to the United States come from U.S. firms, officials say. Thailand is the world's No. 2 maker of hard drives, with U.S. firm Seagate Technology (STX.O) and Western Digital (WDC.O) among big players. 

Although the Trump administration has indicated no specific action against Thailand, Trump has ordered a study into the causes of U.S. trade deficits.