GOLD SINKS TO $1600 AS SLIDE ACCELERATES, SILVER UNDER $30, OIL & NATGAS TUMBLE

Commodities fell across the board this week, even as stock markets remained near five-year highs. Speculation about the end of the Federal Reserve’s quantitative easing programs pressured gold to the lowest level of the year, while a bearish inventory report sent natural gas skidding.

Stocks, as measured by the S&P 500, were essentially unchanged in the period. The index is up 6.5 percent year-to-date.

Macroeconomic Highlights

This week’s economic data in the U.S. were mostly positive, but disappointing news in Europe dampened sentiment. The Census Bureau reported that retail sales in the United States rose by 0.1 percent in January, as expected. Excluding autos and gas, sales rose by 0.2 percent, slightly less than the anticipated 0.4 percent.

The Department of Labor said that the number of people filing for unemployment benefits in the United States fell from 368K to 341K last week, while the Empire Manufacturing Index in the U.S. rose from -7.78 to 10.04 in February—the highest level since May 2012.

On the bearish side, gross domestic product in the eurozone shrank by 0.6 percent in the fourth quarter, more than the 0.4 percent decrease that was expected and the third-straight quarterly contraction.

Of particular note was a 0.6 percent decline in Germany’s GDP, the worst downturn in that economy since the 2009 recession.

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