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Gold Rebounds To Start Week

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Gold Rebounds To Start Week

Precious metals are higher across the board to begin the new week. Gold prices are working to push back above $1,280 an ounce, recovering from a suspiciously large sell order in COMEX gold futures that battered the gold spot price $8 lower within a matter of minutes. This pulled gold back from a nearly three-week high.

Stocks opened sharply lower Monday morning, reacting in part on the news that General Electric is slashing its stock dividend in half to 12 cents.

The British pound (GBP) plunged under the $1.31 support level against the dollar in European trading, as news hit the market that Prime Minister Theresa May's own party is on the verge of passing a no confidence vote and removing her from power. The insurrection in the Tory party comes as a result of botched Brexit negotiations, where the May government has yet to have a coherent and unified proposal to present to EU negotiators.

The euro softened in sympathy to the pound, but recovered later in trading to near unchanged.

The troubles in London allowed the dollar to briefly peek above the 94.60 mark in European afternoon trading before pulling back slightly.

Oil prices continue to trade near two-year highs, as OPEC announced that aggregate production fell again last month. Prices have further been supported over uncertainty regarding an "anti corruption" crackdown in Saudi Arabia that has targeted hundred of oligarchs, including senior princes of the royal family. Some observers believe that the corruption probes are a whitewashing of Crown Prince Mohammed bin Salman's campaign to eliminate political rivals and consolidate power.

Gold may be hesitant to break much above the $1,280 level until after outgoing Fed Chair Janet Yellen's speech tomorrow and US inflation numbers are released this week. Buyers are there, but are refraining from any irrational exuberance.

Silver is showing greater relative strength to gold this morning, sending the gold:silver ratio from 75.7 to 74.95.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product

About the Author

Everett Millman

Steven Cochran

Precious Metals Market Analyst
BS University of South Florida (2002)

A published writer, Steven's coverage of precious metals goes beyond the daily news to explain how ancillary factors affect the market.

Steven specializes in market analysis with an emphasis on stocks, corporate bonds, and government debt. He writes a monthly review of the precious metals markets for SurvivalBlog.com.

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