Gold Prices Higher As Global Stock Markets Wobble

New York (May 29)   Gold prices are moderately up in early-morning U.S. trading Wednesday. Silver prices are slightly up after hitting a six-month low Tuesday. World equity markets are under selling pressure at mid-week, amid some geopolitical concerns that are prompting some safe-haven demand for gold. June gold futures were last up $6.60 an ounce at $1,289.10. July Comex silver prices were last up $0.04 at $14.36 an ounce.

World stock markets are pressured today as risk aversion is back on the front burner of the marketplace. The main concern is the prolonged trade war between the U.S. and China (the world’s two largest economies) that sees no end in sight and appears to be escalating. U.S. stock indexes are pointed toward lower openings when the New York day session begins.

Also unnerving European traders is news today Germany’s unemployment rate unexpectedly surged in May, at up 60,000 versus expectations for a decline of 8,000 workers. Germany is the economic workhorse of the European Union.

It’s summertime again and some European Union instability is due. This time, concerns are rising among Europeans as Italy and Greece are balking about conforming to EU rules on fiscal discipline. And the U.K. can’t seem to figure out how to leave the EU in a smooth fashion.

A feature in the markets this week is falling government bond yields, partly due to “flight-to-safety” buying amid keener risk avoidance among traders and investors. More and more market watchers are thinking the long bull run in equities has ended. Germany today sold a five-year debt instrument today at a record low yield of -0.56%.

The key “outside markets” today see the U.S. dollar index trading slightly higher following good gains Tuesday, while Nymex crude oil prices are solidly lower and trading just below $58.00 a barrel.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, weekly Goldman Sachs and Johnson Redbook retail sales data, and the Richmond Fed business survey.

REuters