Gold prices back off as global equity markets rebound Tuesday
New York (Mar 10) Gold prices are moderately lower in early U.S. futures trading Tuesday, on a corrective pullback after hitting a seven-year high above $1,700.00 Monday. Risk aversion and anxiety on Tuesday morning are not as high as seen on Monday. April gold futures were last down $10.00 an ounce at $1,665.80. May Comex silver prices were last up $0.021 at $17.075 an ounce.
Global stock markets rebounded Tuesday following Monday’s rout. U.S. stock indexes are pointed toward sharply higher openings when the New York day session begins, and set to gain back about half of Monday’s mammoth losses that were the worst in 12 years. Traders and investors are wondering if Monday marked the worst of the global stock market meltdown. Or, it could be that Tuesday’s rebounds in the equities markets could be the so-called “dead-cat bounce” that occurs after major market sell offs, only to see prices continue to trend down. Of course, nobody knows for sure on the matter. However, markets that see extreme price moves during shocks to the marketplace tend to see price bottoms put in sooner rather than later.
President Trump and his administration have been meeting to discuss financial relief for U.S. businesses and workers impacted by the coronavirus outbreak. An announcement is likely to occur as soon as today. Also, look for the major central banks of the world to continue to provide monetary stimulus to their economies in the coming days and weeks.
The general public’s fear of Covid-19 appears to be continuing to grow. The U.S. Center for Disease control has just issued a warning for Americans over 60 years old to stay home and not travel, if at all possible. It’s a bit surprising that U.S. stores have not seen more consumer hoarding of basic goods, although anecdotal reports do say cleaning supplies are running low. Reports now say the entire country of Italy is quarantined. Television news is showing pictures of empty airports in Asia cities.
The benchmark 10-year U.S. Treasury note saw its yield rise above 0.7% Tuesday after dropping to a record low of 0.387% Monday. That’s a positive sign of a marketplace that is not quite so fearful.
The U.S. dollar index is trading sharply higher after hitting a 13-month low Monday. Gold prices are down after hitting a seven-year high on Monday.
Meantime, crude oil prices are solidly higher and trading around $33.25 a barrel after careening to a four-year low on Monday. Russia and Saudi Arabia are in an all-out oil price war that does not look likely to end anytime soon. Veteran energy market watchers know that both Russia and Saudi Arabia hate the North American oil “frackers” that have dramatically changed the global energy landscape the past 10 years. Both countries could be planning to pump as much oil as they can in the coming months, which would very likely bankrupt many U.S. and Canadian shale-oil-producing companies. Then, Saudi Arabia and Russia could start to close their oil spigots to drive crude prices higher again.
U.S. economic data due for release Tuesday is again light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the NFIB small business index.
KitcoNews
