Gold prices were slightly higher on Monday morning following the triumph of centrist candidate Emmanuel Macron in France's presidential election over the weekend. Macron, a former investment banker who represented neither of the two traditional political parties in France (the Socialists and Republicans), bested National Front candidate Marine Le Pen, who is staunchly anti-EU and anti-immigrant.
Although Macron was the clear favorite, investors around Europe largely took his victory as a sigh of relief, as a Le Pen victory would likely have triggered a domino effect of policy changes -- above all, France exiting the euro -- that, combined with last summer's "Brexit" outcome, would likely have dealt a fatal blow to the future of the EU. While Macron is, much like his opponent, a political outsider in some sense, his party's platform emphasized French leadership within a united Europe rather than isolation apart from its neighbors.
In the wake of Sunday's election results, the euro finally paused after rallying for the better part of the last week in anticipation of Macron winning. The dollar rose about 0.25% this morning to 98.9 on the DXY index. 10-year Treasury yields were steady around 2.35% after shedding some demand.
Next on the geopolitical front, attention turns to the outcome of South Korea's upcoming presidential election, which was prompted by a scandal involving the recently-ousted president. The world waits to see how the election will impact relations on the peninsula, which are strained to say the least. It comes just as tensions between the North and the U.S. are rising: North Korean authorities detained another American citizen—an instructor at a university in Pyongyang—this weekend, bringing the total number of Americans being held in North Korea to four.
Friday closing numbers for the precious metals were as follows:
Gold: $1,227.90/oz (-10¢)
Silver: $16.31/oz (+1¢)
Platinum: $913/oz (+$10)
Palladium: $815/oz (+$13)
At Monday's open, spot gold was up about 0.2% to around $1,230/oz. Spot silver lost 4¢ per ounce to trade at $16.27/oz. Platinum was flat at $913/oz in early trading while palladium gained just $1 an ounce.
Elsewhere in the commodities sector, crude oil prices continue to slip as the market seems to keep losing support for higher prices, despite ongoing production cuts by nations in the OPEC cartel. One key component in the market, hedge funds and other big financial players, apparently exited their long positions on oil just as the rally died out last week.
The S&P 500 is coming off yet another all-time high reached on Friday, although stock futures pointed slightly toward the negative on Monday morning. Aside from the South Korean election, the swirl of news in the U.S. regarding potential tax cuts passed by Congress will be the focus of Wall St. The continued trickle of first-quarter earnings will also be closely watched.
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