market:
- Gold fell by $ 530 to $ 4860
- Silver fell by $33 to $82.70
- WTI crude oil rose 47 cents to $65.90
- S&P 500 down 0.4%
- Nasdaq down 0.9%
- US 10-year yields rose 1.8 bps to 4.24%
- USD is ahead, AUD is behind
It was a day for the ages in the precious metals market as gold fell 10% and silver fell 30%, the worst percentage declines ever. It’s been a parabolic rally – especially in silver – and today it has come out of nowhere. Selling started in Asia but silver was still at $104 at the start of US trading; It eventually fell to $77.80. Similarly, gold remained steady around $5170 before falling to a low of $4697. There was a slight rise in both of them late.
Warsh’s nomination got some credit for both moves, but I think it’s questionable, or fits the narrative for the price action. Volatility increased yesterday and there was a good old fashioned scramble for the exits. If anything, I’d say yesterday’s decline in MSFT shares showed that nothing is safe, and it had an impact.
The market has so far concluded that Warsh is secretly hawkish despite his public comments. Only time will tell but no one really knows how we will react once we get into the role and the data starts coming in. Plus, he’s part of a committee, not a dictator, so rates will go where the data takes us.
On that front, PPI numbers were hot and oil prices rose again today. All eyes are on Iran this weekend with continued talk about possible US attacks. When Trump said Iran wanted to negotiate he turned the temperature down briefly (oil quickly dropped to $1). However, later crude oil compensated that loss.
Overall it was a crazy week that ended with some intense drama. Another flush earnings calendar will be introduced next week, starting with Disney and Palantir on Monday. The week will end with non-farm payrolls.
Until then, have a nice weekend.
