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Gold is up 1.8% to $1,262 per ounce and silver 1.9% to $19.49 following the big miss in the ISM report as traders contemplate maybe a slowdown in the taper, and some bulls dream about a QE4. Up 1.5% at the moment the Gold Miners ETF is ahead 12.9% YTD.
The 10-year Treasury yield is off 3 basis points to 2.62% and the December 2016 Eurodollar contract is up 9 basis points to 97.99 - suggesting a slower pace of rate hikes, but still pricing in a Fed Funds rate 175 basis points higher than it is today.
As equities open in a broad-based decline, precious metals miners show early strength: ABX +4.1%, NG +4.1%, EXK +3.7%, GG +3.7%, IAG +3.3%, SA +2.9%, AG +2.8%, SSRI +3.1%, AUY +2.7%, GOLD +2.5%, NEM +2.3%, MVG +2.3%, SLW +2.2%, PAAS +2.2%, AU +2.1%, KGC +2.2% (Briefing.com).
Threatening to sink below $1,200 ounce after the strong ADP jobs report this morning, gold has staged a big reversal to $1,247. Below $19 earlier, silver has also come along for the ride, now at $19.72.
The "struggle for gold not only rests with the predominant selling interest among investors currently, but with limited positive catalysts looking forward, gold is unlikely to regain its former appeal," writes UBS, slashing its precious metals forecasts for 2014 - gold to $1,200 from $1,325 and silver to $21 from $24.
With the downward momentum building, gold could test $1,050 an ounce - a level that might approach a "decent buying level," writes the team, but the path would be "very turbulent."
Gold is flat in morning action at $1,223 after yesterday's plunge, while silver has given up a bit more ground, -0.5% to $19.93.
November's PMI read of 57.3 is up from 56.4 last month, and the highest print this year. Leading is a 3 point gain in New Orders to 63.6 and a 2 point gain in Production to 62.8. Supplier Deliveries curiously fell 1.5 points to 53.2 (drones?).
The benchmark rate for the $20T gold market has become the latest focus of regulator scrutiny, with the U.K.'s Financial Conduct Authority looking at how the "London fix" is set, Bloomberg reports.
In a process that goes back to 1919, the rate is published twice a day following a telephone call between Barclays (BCS), Deutsche Bank (DB), Bank of Nova Scotia (BNS), HSBC (HSBC) and Societe Generale (SCGLY).
The process can last up to over an hour, with participants being able to use the information from the call to trade gold and its derivatives while the discussion is taking place.
"It's controlled by a handful of firms with a direct financial interest in where it's set, and there is virtually no oversight - and it's based on information exchanged among them during undisclosed calls," says Rosa Abrantes-Metz of New York University.
A look beneath the hood of Schwab's (SCHW) recently unveiled lineup of 105 commission-free ETFs shows an impressive breadth of asset class coverage, including currency, physical metals and equal-weight sector ETFs not previously available for commission-free trading. Notably absent: iShares single country funds, 10 of which are available among the 101 ETFs TD Ameritrade (AMTD) offers commission-free.
Russia makes its first gold sale in 5 years, according to IMF data showing the country unloaded 3.8 tons in February. It's a big shift for the central bank which had been one of the more aggressive official buyers of the metal, more than doubling reserves since 2006.
How to surf the silver wave: Maybe it's time to take some profits, and wait and see, James Stewart says. He's big on inflation hedges, but you might want to take this chance to rebalance. Meanwhile, Jim Rogers gets into the Grantham camp and is bearish on silver short-term, but still bullish on (peaked) oil.
Rising along with the entire commodity group, gold touches another record, currently at $1,458/oz. "Unrest [in MENA] and the debt crisis in eurozone peripherals, coupled with the weak U.S. dollar and still loose monetary policy of western central banks, are fueling price speculation," writes Commerzbank.
Where's Burl Ives when you need musical accompaniment? Silver and gold, silver and gold... The yellow metal may settle at an all-time high for the second straight day - now +0.6% to $1,446/ounce - and silver (+2.2%) has crested the $38 mark for its own 31-year high.