Precious Metals Keep on Climbing as PMI Numbers Disappoint

There appears to be a growing disconnect between what equity and non-equity asset classes are telling us about investor sentiment.

On the one hand, equity indices in the US and elsewhere continuing to reach new all-time highs seems to suggest an increased level of confidence and optimism about the future. This morning, US index futures are consolidating yesterday’s US index gains of 0.1% – 0.7%. Over in Europe, the DAX is up 0.4% and the FTSE is up 0.2%.

On the other hand, defensive havens, particularly precious metals, are also soaring to new all-time or decade-plus highs. Today, Gold is up another 1.1% trading above $3,800/oz, Silver is up 0.8%, trading near $44.50/oz, and Platinum is up 3.2%, approaching $1,500/oz. This move in metals suggests some investors are becoming more cautious about the value of the US Dollar and other currencies, and perhaps also concerned about future inflation.

Meanwhile, Bitcoin, which can be seen as a proxy for investor sentiment at the bleeding edge, has been quietly backsliding since peaking a month ago, currently trading near $112,500. Commodities are mixed with Crude Oil up 1.1% and Copper down 0.1%.

Flash PMI reports, the first peek at economies around the world in September, have been disappointing, on balance. Australia, France, and the UK all posted numbers which were down from last month and/or below expectations. US flash manufacturing PMI (street 52.0) and US flash services PMI (street 53.9) are due at 9:45 am EDT.

Although both central banks announced interest rate decisions, along with commentary and forecasts just last week, comments from Fed Chair Powell and Bank of Canada Governor Macklem this afternoon may attract attention if either of their tones changes.

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