Steep price declines in gold, silver amid China Covid worries

1. New York (Apr 25)  Gold and silver prices are sharply down in early U.S. trading Monday, with gold hitting a nearly four-week low and silver a nine-week low. Mounting concerns regarding demand for raw commodities as Covid cases in China, the world’s second-largest economy, are spready rapidly throughout the country. June gold futures were last down $26.50 at $1,907.90 and May Comex silver was last down $0.624 at $23.645 an ounce.

Global stock markets were mostly lower overnight, led by the biggest drop in Chinese shares in two years. U.S. stock indexes are pointed toward lower openings when the New York day session begins. There are growing worries about the economic toll of China’s strict zero Covid policy, as lockdowns spread to Beijing. The Chinese yuan dropped to its lowest level against the U.S. dollar since late 2020. The Covid flareup that shut down much of Shanghai appeared to worsen over the weekend. China ordered mandatory tests in a district of Beijing and shut down some areas of the capital of more than 20 million people. This situation is expected to further disrupt already strained global supply chains and likely drive already problematic inflation still higher.

The Russia-Ukraine war that shows no signs of de-escalating continues to sap trader and investor risk appetite.

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