Metals Sitting Still After Rallying Yesterday

Gold gave back a bit of yesterday’s gains to trade at 1350.50 ahead of the much anticipated US nonfarm payroll report due in the early US session. Late in the day on Thursday gold climbed to trade above the 1350 level as global political tensions returned to the markets. The US and Russia squared off on the situation in the Ukraine and the Crimea. Gold prices ended the U.S. day session with moderate gains Thursday, boosted by bargain hunting and by a lower U.S. dollar index. The overall near-term chart posture of the gold market remains in favor of the bulls, which continues to invite technically inspired buying. Gold also got a lift Thursday from less-dovish comments from European Central Bank president Mario Draghi, at his press conference following the ECB monthly meeting. His remarks lifted the Euro currency, which in turn supported gold and pressured the U.S. dollar index. The ECB did not make any significant monetary policy moves Thursday. None were expected given some recent, generally upbeat economic data coming out of the European Union.

The situation in Ukraine has for now changed from a serious geopolitical matter to more of a regional issue of lesser significance—from a market place perspective. High quality global journalism requires investment. Events in Ukraine continued to keep diplomats on edge after Crimea’s parliament accelerated plans to secede and join Russia, but investors did not appear convinced that the heightened tensions would affect global growth, as attention turned to the forthcoming US non-farm payrolls report.

In the US, there was a sigh of relief as Unemployment Claims looked solid and dropped to 323,000 in February, down sharply from 348,000 a week earlier. The estimate stood at 336,000. The US faces a big test on Friday with the release of Nonfarm Payrolls. The markets are expecting an improvement in February, but the ADP Nonfarm Payroll release on Wednesday fell well short of the estimate. If Nonfarm Payrolls fails to meet expectations, we could see the US dollar lose ground.

Silver took its cues from gold to trade at 21.548 down a few pips, along with platinum and palladium which also held their ground. Platinum is trading at 1485.40 while palladium is at 781.30.

Copper eased against a slightly stronger US dollar to trade at 3.208 down off its high earlier in the week of close to 3.26. Copper and other base metals slipped on Thursday on investor concern over future demand in top metals consumer China after more details emerged about reform plans.

Metals rallied on Wednesday after China said it aimed to expand the economy by 7.5 percent, but its finance minister said on Thursday that it was all right to miss that target slightly as long as enough jobs were created.