Stocks gave back Thursday’s gains on Friday as traders digested a triple witching day and the UAW’s strike against automakers. Gold soared during the relatively harsh environment, backed by a surprising upbeat in the NYES Manufacturing Index that saw ‘price paid’ as non-inflationary.
Chart: GOLD
The New York Federal Reserve’s Empire State Manufacturing index rose to 1.9 in September, higher than the -10 expected and in expansionary territory compared to August’s reading of -19. The report showed that the ‘price paid’ component remained unchanged while ‘prices received’ improved substantially. Coupled with a risk-off appetite from UAW’s strike against the Big Three automakers, gold prices soared 0.70% to $1925/oz on Friday, leaving behind support at $1905/oz to march -potentially- towards $1940/oz.
Industrial production improved in both the US and China, exceeding expectations and suggesting increasing demand. US Industrial production advanced to 0.2% from 0%, while economists had forecasted a -0.5 contraction. China’s release showed a figure of 4.5% compared to the 3.9% expected. WTI has been on an upward spiral, boosted by OPEC+ cut extensions and Storm Daniel affecting Libya’s export terminals, and continued to rise on the improving economic data. The next resistance lies at $93.80 a barrel, with support being the $90/bbl handle.
After sliding to a 6-month low following the ECB’s signal to end its hiking cycle on Thursday, EUR/USD bears took a breather on Friday as the broader US index was also seen experiencing a slight drop. Although the currency took a beating following Lagarde’s remarks, traders appeared to be securing some gains ahead of the weekend close and this week’s widely anticipated FOMC. Next support is expected at $1.06, with resistance near $1.0730.
On Friday, Chevron workers in Australia also went on a strike, adding to an appetite for natural gas on disagreements over pay, overtime, security, and schedules. European gas prices rose 9% as leading importers of Australian LNG, with the US counterpart up 2.90% by the session’s end. With Chevron confirming the end of negotiations, prices could accelerate towards or past the $3/cf barrier unless bulls fail to defend $2.40/cf.