Gold and silver prices pull back as U.S. stocks, greenback gain
London (Feb 3) Gold and silver prices are moderately weaker in early U.S. futures trading Monday. The safe-haven metals are under some pressure from a rebound in the U.S. stock market to start the trading week, as well as solid gains in the U.S. dollar index. Gold prices did score a three-week high overnight. February gold futures were last down $6.40 an ounce at 1,576.50. March Comex silver prices were last down $0.222 at $17.69 an ounce.
Asian stock markets were lower overnight, led by sharp losses in mainland China stocks as those markets reopened for the first time in over a week, due to the Lunar New Year holiday last week. The Shanghai stock index lost nearly 8% on the day—the biggest drop in 4.5 years. European stock markets were mostly up and U.S. stock indexes are pointed toward higher openings when the New York day session begins.
The coronavirus outbreak in China that has spread to other parts of the world remains in focus early this week. Latest counts show 17,500 Chinese citizens afflicted with over 350 dead, with air travel to China being significantly curtailed and global and domestic business there disrupted. It’s been an up-and-down daily trading affair for markets the past two weeks, regarding the coronavirus outbreak. Judging from the European and U.S. stock markets’ gains Monday, at least on this day the present situation appears to be factored into market prices. That’s a negative for gold and silver prices.
In other Asian news, Hong Kong’s economy contracted by 1.2% in 2019, the first negative growth rate in over 10 years. Civil unrest and a global trade slowdown hurt that city’s economy.
In the Euro zone, the January manufacturing purchasing managers’ index (PMI) came in at 47.9, which was slightly better than expectations, but still a reading below 50.0 that suggests a contraction in the sector.
The U.K. has officially exited from the European Union as of last Friday. The British pound saw some pressure as the U.K. and Euro zone officials begin transition talks.
The key outside markets today see crude oil prices near steady and trading around $51.50 a barrel. Reports overnight said Saudi Arabia is mulling a “drastic” temporary oil-production cut due to the coronavirus outbreak. OPEC ministerial officials may meet this week to discuss the matter. Meantime, the U.S. dollar index is higher on a corrective bounce from solid losses seen last Friday.
U.S. economic data due for release Monday includes the U.S. manufacturing purchasing managers’ index (PMI), the ISM manufacturing report on business, construction spending, domestic auto industry sales and the global manufacturing PMI.
Reuters
