Gold down despite big sell off in global stock markets Wednesday
New York (Mar 11) Gold and silver prices are moderately lower in midday U.S. futures trading Wednesday. The prospects of less worldwide general consumer demand for the precious metals is on this day trumping the safe-haven investor demand that has been seen in recent sessions and which Monday drove gold prices to a seven-year high above $1,700.00. April gold futures were last down $13.30 an ounce at $1,647.00. May Comex silver prices were last down $0.16 at $16.795 an ounce.
The World Health Organization on Wednesday declared the coronavirus a pandemic. While this did not surprise the marketplace it was a stark reminder of an outbreak that threatens to significantly crimp the global economy. Former Surgeon General Scott Gotleib said on CNBC a short while ago the U.S. should be more pro-active and start shutting down big public events such as the NCAA basketball tournaments. The U.S. stock market hit session lows and is sharply down following the WHO announcement.
The Bank of England Wednesday cut its key interest rate by 0.5% overnight and the U.K. government said it is set to implement economic stimulus measures. The marketplace was a bit upset Tuesday when the Trump administration failed to announce any U.S. economic stimulus measures after President Trump hinted such might occur. Many think the U.S. will soon announce stimulus measures to prop up the U.S. economy.
The general public and traders and investors’ perceptions of the human and economic tolls of the Covid-19 near-pandemic are darkening by the day. Traders hate uncertainty, and the marketplace still does not have any grasp of how the coronavirus situation will ultimately play out from a markets perspective.
The Saudi Arabia-Russia oil-price war and its global energy and economic ramifications remain on traders’ minds, and would normally be on the front burner of the marketplace if not for the coronavirus scare. Traders are wondering if the two major global oil producers might soon meet to reconcile their differences, as it appears both countries are “cutting off their nose to spite their face.”
The benchmark 10-year U.S. Treasury note sees its yield around 0.725% Wednesday, which is down from Tuesday’s reading. On Monday the U.S. 10-year note hit a record low yield of 0.387%.
The U.S. dollar index is trading higher in midday U.S. trading following sharp gains Tuesday. Nymex crude oil prices are down and trading around $33.00 a barrel.
By 3pm EST spot gold plunged $20 to $1,638, while spot silver fell nearly 2% to $16.75.
KitcoNews
