Mild price advance for gold as marketplace still a bit nervous
New York (Sept 21) Gold prices are modestly up in early U.S. trading Tuesday, while silver is posting decent gains. There is still some safe-haven demand today after Monday’s sharp sell off in global stock markets still has traders and investors edgy. October gold futures were last up $7.30 at $1,769.10. December Comex silver was last up $0.376 at $22.58 an ounce.
Global stock markets were mostly up in overnight trading, while the U.S. stock indexes are pointed to solid gains when the New York day session begins, on corrective bounces after strong losses posted on Monday. It seems many in the marketplace are now thinking the big Chinese property developer, Evergrande, which is in serious financial trouble, will get a bailout from the Chinese government. Bloomberg reported overnight that S&P Global Ratings said Evergrande is on the verge of default. S&P said it believes authorities in Beijing would only step in if the failure of Evergrande led to far-reaching contagion that threatened China’s economy. The troubled firm must make an $83.5 million interest payment on Thursday. China’s markets remained closed Tuesday for a public holiday.
The U.S. Federal Reserve opens its two-day monetary policy meeting (FOMC) beginning Tuesday morning. The meeting ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The marketplace will scrutinize the Fed’s discussion on the timing of it likely tapering its bond-buying program, and on what the central bank says about inflation prospects.
In other overnight news, the OECD think tank said the new Covid surge will slow down the recoveries of the major global economies, but not derail them.
The key outside markets today see the U.S. dollar index lower after hitting a four-week high Monday. Nymex crude oil futures prices are higher and trading around $71.00 a barrel. These two markets are in a bullish daily posture for the metals markets. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.338%.
U.S. economic data due for release Tuesday includes the weekly chain store and Johnson Redbook retail reports, new residential construction. U.S. President Biden and Chinese President Xi Jinping are due to speak at the United Nations in New York today.
KitcoNews
