Gold also saw a modest increase as front-month futures gained 1.1% to $1,662 per ounce. Silver saw similar gains, while Platinum dropped 1.15% to below $1,600 per ounce. This widens the Gold-Platinum spread that has historically seen Platinum prices at a premium to Gold. That relationship changed near November 2011.
Oil prices fell in tandem today as well. Tomorrow’s inventory figures could be the impetus to push oil below $100 per barrel – if we see another “risk off” (we hate that term) day. Last week’s inventory figures showed that output was at a 13-year high. Further output gains or inventory builds could have oil testing year-low levels near the $95 level.
The one question we have about today’s price action, though, is: Why didn’t recent correlations with EUR hold? The currency has not participated in this two-day sell off that has engulfed equity markets. Something has to give – either this is a fake-out on the equity front; or the EUR is in store for a decline below the 1.30 level. Every time it looked like EUR/USD was going to drop today, new buyers came in, leaving the pair at 1.3085. We would not be surprised to see this move higher tomorrow barring negative news on the equity front.
Oh, one last thing, Alcoa (AA) earnings are released after the bell today. Try not to draw too much from that… the stock is not indicative of earnings season.