By Jon Nadler
Price weakness continued to be manifest in the precious and base metals complexes overnight, as China's stock market index fell another 4.3% and came to the point of requiring the 'bear market' label to be applied to it by market technicians. Albeit analysts see the Chinese market implosion this month as somewhat counterintuitive, there are other signs that point to justifiable apprehensions.
Say, the Baltic Dry Index falling 2.5% just yesterday. Over in Germany, producer prices dropped at the highest rate in sixty (!) years last month, signaling the possibility of deflation taking hold in the eurozone.
The US dollar benefited from all of these jitters and rose 0.22 on the trade-weighted index, to reach 79.07 overnight. The chorus of calls for a significant dollar drop continues, with sources such as PIMCO and Mr. Jim Rogers envisioning a loss of reserve status for the currency.
Curiously, neither party offered up realistic alternatives to the greenback when writing its pre-obituary. And, markets being what they are, essentially contradicted both, when the latest frissons of risk aversion created a few goose bumps in various trading pits.
Crude oil headed lower, but lost only a fraction in value and was last seen at very near $69 per barrel. The upshot of all of these developments was that gold remained under selling pressure and essentially orbited around the $935 level prior to the opening of the NY session this morning. Not so, was the case for silver - it sank 35 cents to its lowest level in one month - it reached $13.52 overnight.
New York spot metals dealings opened with a 0.55% loss in gold, which was quoted at $932.90 per ounce. Silver lost 42 cents to start at $13.55, while platinum was showing no change at $1227.00 an ounce. Palladium sank $4 to open near $268 per ounce.
