Gold prices are near unchanged from yesterday's spot close, as markets seek direction from the Federal Reserve and further losses in crude oil offset a rebound in tech stocks. Precious metals in general are quiet, except for palladium, which is seeing modest gains.
Both the dollar and bond yields are treading water this morning as well, with the dollar gaining support from a weaker British pound.
Spot silver is slightly lower at the start of trading in New York, after losing 1.26% Monday to close at $16.48 an ounce. The other three precious metals also had a down day, as a rebound in tech stocks and a moderately higher US dollar accented the market's risk-on sentiment to start the week. Yesterday's spot action saw gold down $9.80 to $1,243.60 an ounce, platinum shed $5.00 to $924.00, and palladium ended the day $8.00 weaker at $856.00
Monday marked the official opening of Brexit negotiations between the UK and the EU, starting a two-year countdown. This initial meeting was unexpectedly cordial. Many had been anticipating a fiery start, especially from the British team, but they basically agreed with the timetable the EU team had prepared, including putting off trade negotiations until after the exit deal was completed.
Perhaps the most exciting Brexit-related news was from the Bank of England. BoE Governor Mark Carney this morning said that uncertainty over the economic effects of the Brexit negotiations has basically tied the central bank's hands as far as raising rates in the near future.
The resulting weakness in the pound is countering strength in the euro and yen to keep the DXY dollar index in the green in early trading.
The carnage in the oil market shows no signs of letting up. Prices are sinking deeper into a seven-month low to start the day. July WTI contracts were trading below $43 a barrel early in New York, down by nearly 3%. This comes after a 1.2% drop Monday that saw US crude settle at $44.20 a barrel. August Brent crude futures are down 2.8% this morning, after settling nearly 1% lower yesterday, and ending at $46.91 a barrel.
The resulting hit to energy stocks is tempering gains from a rally in the tech sector. leaving the three major US indices to open slightly lower.
On the geopolitical front, Syria remains the hottest hot spot on the map. A day after a US F/A-18 fighter jet shot down a Syrian Air Force Su-22 that was reportedly dropping bombs on US-supported rebels, Russia warned that any Coalition aircraft that flew west of the Euphrates River would be locked-on by Russian ground and airborne radar, and be treated as potential targets.
Another development in Syria on Sunday that is being mainly ignored by US news outlets is Iran's launch of six missiles from western Iran, over Iraq, and into eastern Syria, hitting a Daesh/ISIS stronghold.
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