On Monday, the global financial markets witnessed a surge in the prices of both gold and silver. The rapid appreciation of both precious metals may have caught the market's attention.
Today, silver futures were trading around $26.9 per ounce. Already on Monday, they reached an eight-week high of USD 27 per ounce. Increased interest in safe-haven markets may have contributed to the rises, due to the growing number of coronavirus infections in Asia and lower yields on U.S. Treasury bonds. Added to this were expectations of increased industrial demand as the economic recovery gains momentum and the dollar remains weak. These factors may have provided support for silver prices.
On the macroeconomic data front, the ISM PMI survey showed that the US manufacturing sector expanded at a slower pace in April due to slower growth in both new orders and employment. However, the price component rose very strongly, to its highest level since July 2008, which could also prompt investors to look for assets to hedge against future inflation.
Data important for the dollar, stock markets, but also for precious metals
Gold prices on Monday hit their highest level in nine weeks, only to fall to around $1,790 per ounce today. Gold appears to have already made gains thanks to lower yields on U.S. Treasury securities and growing concerns about the coronavirus crisis. The average daily number of new COVID-19 infections globally has been above 800,000 for over a week now, with India recording over 300,000 new infections for the 12th consecutive day. What's more, the aforementioned inflationary pressures are rising, which could cause negative real interest rates to rise, and that could be good for gold.
Investors are awaiting a number of economic data from the US this week, including non-farm payrolls, which could be key to the further fate of the US dollar or stock indices, but also gold.
Oil prices: the US and EU are driving, India is holding back
Meanwhile, on the oil market, prices stabilized on Tuesday after rising more than 1 percent in the previous session, with the WTI variety hovering around USD 64.5 per barrel and Brent around USD 67.6 per barrel. Prices may be affected by caution related to falling demand in pandemic-stricken India. In turn, easing restrictions in the US and the European Commission's proposal to open up to fully vaccinated foreign visitors this summer provided support to prices.
Prices for WTI and Brent varieties have risen about 30 percent this year, thanks to an improved demand outlook following the successful introduction of vaccines. On the supply side, OPEC+ began easing oil production cuts gradually this month after implementing deep cuts since a pandemic-induced oil price collapse in 2020.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
77.46% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
