Gold prices down as risk appetite ticks up

New York (Jan 24)  Gold prices are lower in early U.S. futures trading Friday. The safe-haven metal on this day is being pressured by upbeat trader and investor attitudes to end the trading week, despite the specter of the coronavirus outbreak worsening. The metals are also pressured in part by the steep drop in crude oil prices, which hit a two-month low Thursday. February gold futures were last down $8.00 an ounce at 1,557.50. March Comex silver prices were last up $0.001 at $17.83 an ounce.

Asian and European stock markets were mostly up overnight. U.S. stock indexes are pointed higher openings when the New York day session begins. European markets were boosted from some upbeat economic data Friday, as the composite purchasing managers index (PMI) came in at 50.9 in January, unchanged from December. The German manufacturing PMI for January came in at 45.2 and beat market expectations. The German manufacturing PMI was reported at 43.7 in December. A reading above 50.0 suggests expansion. European traders were encouraged that economic workhorse Germany is seeing its manufacturing sector improve.

The marketplace this week has waffled on the coronavirus illness that is impacting China and has now killed at least 26 of its citizens, with nearly 1,000 contracting the illness and several cities in China on lockdown. One day the markets are spooked by the matter and then next day they  seem to ignore it. Reports Friday said the breakout of coronavirus could lop off over 1% of China’s annual GDP, especially as the main holiday in China, the Lunar New Year, starts this weekend. At least one case of the virus has been found in the U.S. and one has been reported in Singapore. The U.S. State Department on Thursday advised U.S. citizens to reconsider traveling to the impacted regions of China. It’s likely this situation will get worse before it gets better.

The key outside markets today see crude oil prices weaker and trading around $55.35 a barrel. Prices Thursday hit a two-month low as prices are in a steep near-term downtrend.
 Meantime, the U.S. dollar index is higher and hit a seven-week high overnight, as the USDX is trending up.

U.S. economic data due for release Friday includes the U.S. flash services PMI and the manufacturing PMI.

KitcoNews