Precious Metals Experience Pressure as Key Markets Show Weakness
Gold prices are trading weaker, and silver has seen a slight decline in midday U.S. trading on Monday. Both precious metals are facing pressure from several key external markets that are showing bearish trends at the start of the trading week. The U.S. dollar index and U.S. Treasury yields have edged slightly higher, crude oil prices are modestly lower, and U.S. stock indexes are generally up. As of the latest updates, August gold was trading up by $10.90 at $2,388.00, while September silver was down by $0.119 at $29.175.
The market had a largely subdued reaction to the announcement that President Joe Biden is withdrawing from the presidential race. Biden’s exit was anticipated due to increasing calls from Democrats for him to step aside in recent weeks. He has endorsed Vice President Kamala Harris, who is gaining solid Democratic support. This development appears to be reducing some of the market uncertainty and diminishing safe-haven demand following Biden’s decision not to seek re-election.
In international news, China’s central bank unexpectedly lowered its interest rates after the Third Plenary meeting last week fell short of expectations for short-term stimulus. The seven-day repo rate was cut to 1.7%, marking the first reduction in almost a year, with additional cuts to other lending rates by the People’s Bank of China. This move has been met with concern, as highlighted by a Wall Street Journal headline stating, “China’s long blueprint for economy falls short on details, raising concerns.”
The benchmark 10-year U.S. Treasury note yield is currently at 4.268%.
Looking ahead, the U.S. economic calendar will become busier, culminating with GDP data on Thursday and inflation readings from the personal income and outlays report on Friday.
