GoldPrice

The Richmond Fed manufacturing PMI rose from -2 to 2 in March, seeing low volatility despite the coronavirus impact on global supply chains. Shipments and new orders saw increases in March, while employment ticked downward.

Good morning, traders. An unusual Tuesday drop-in today, as the volatile moves we’ve seen in the gold market this morning warrant some discussion. Gold prices are trading with strength near well above $1600/oz, a key recovery level and a line of major psychological “round number” resistance. While the yellow metal, along with silver, had been moving steadily higher since yesterday afternoon and through the overnight trading session, a functional breakdown of one of gold’s traditional pricing mechanisms led to prices swinging wildly in the early morning hours and powering as high as $1625 in the spot markets before reeling back.

The US Markit manufacturing PMI dropped from 50.7 to 49.2 in March, beating expectations of 42.8. Meanwhile, the Markit services PMI underwhelmed, falling from 49.2 to 39.1 vs. 42.8 expected. The service sector has been hit particularly hard by the coronavirus outbreak with the closure of many bars, restaurant, tours, and other services, and this is expected to worsen over the coming months.

Good morning, traders. Welcome to our weekly preview of economic data and the narratives that are driving global markets, with a focus on those inputs that may have the biggest impact on gold prices, as well as the Dollar and other correlated assets.

Happy Friday, traders. Welcome to our weekly market wrap, focusing on the last five days of trading in gold, the Dollar, and related assets.

Home sales rose a solid 6.5% in February compared to the month before, the highest pace in 13 years. Analysts expected gains of just 07%. 5.77 million units were sold, with the market boosted by lower mortgage rates. Rates were lower in part due to market fear surrounding the coronavirus outbreak. However, the sales data was taken before the severe escalation of the pandemic, and the economic impact is likely to negatively impact future sales.

Gold has shaken off losses in today’s session following a major increase in jobless claims. Claims rose 70,000 in the week ended March 14 to 281,000, the highest level since 2017. The last time claims were this high was a result of Hurricane Harvey which damaged infrastructure and resulted in widespread disruption of business activity. The coronavirus pandemic is behind the sudden surge in claims, which was forecast at just 220,000.

The Philadelphia Fed manufacturing index fell from 36.7 to -12.7, the lowest reading since the summer of 2012. The markets had expected a steep drop to 8, but the -12.7 reading far exceeds the negative estimates and puts the index firmly in contraction territory.

What a month, traders. What a month it’s been so far. This is the space where, up until Sunday evening, I was planning on offering our usual recap of the FOMC’s announcements and press conference that were to follow the March meeting scheduled to end today. Of course, that changed when the Federal Reserve’s moment to act was pulled forward to Sunday where they announced an emergency cut of 1%-- their second inter-meeting move in as many weeks—and a new program of QE (Quantitative Easing) operations that will target total asset purchases of $700 billion.

Housing starts declined in February following a strong month in January that was aided by unseasonably warm weather. Homebuilding fell 1.5% to a seasonally adjusted annual rate of 1.59 million units in February, according to the latest report released by the Commerce Department on Wednesday. January data was revised higher from 1.56 million units to 1.62 million units, and starts soared 39% annually in the 12 months through February.

Gold prices have seen slight upward momentum despite the release of upbeat industrial production figures for the month of February. US industrial production rose 0.6% last month vs. 0.4% expected and following a drop of -0.5% the month before. The Federal Reserve’s figures show that manufacturing output is down 0.4% from last year.

US consumers had already begun paring back spending last month, even before the efforts to slow the spread of the Covid-19 coronavirus began constricting regular economic activity according to the Commerce Departments data on February retail sales, released on Tuesday.