11 October 2016

 Gold worked higher over the course of Monday’s trading, but we suspect that this was attributable more to a modest technical bounce after last week’s drubbing as opposed to anything else. Silver also pushed up slightly, but platinum lost ground.

Friday’s worse-than-expected nonfarm payroll number was cited as being constructive for gold on Monday, but the precious metal hardly reacted on the day of the release itself (up only $2/ounce), so we are not sure that played much of a role. Somewhat more helpful for gold, was the fact that oil jumped by as much as 3% on Monday, with Brent hitting a one-year high after the Russians said that they were ready to join OPEC in curbing output. This is a substantial development, as OPEC’s’ existing cuts of somewhere between 600,000 bpd –1 mbpd are likely not sufficient to seal the current surplus and so the Russian announcement could possibly do the trick. But even here, we still have a long way to go before any kind of deal is consummated; enforcement remains an entirely different problem as well