Solid price gains for gold, silver as bears run out of gas
NEW YORK (April 8) Gold and silver prices are posting good gains in early U.S. trading. Bulls have strongly stepped in to buy the price dips as it appears the bears became exhausted. This suggests both metals have put in near-term price bottoms. June gold was last up $57.10 at $3,030.70. May silver prices were last up $0.721 at $30.325.
Asian and European stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed to sharply higher openings today in New York. Risk aversion appears to have ebbed a bit overnight. However, it’s doubtful marketplace confidence will return to normal levels anytime soon. The near-daily new tariff-related pronouncements from the White House and/or other major countries will keep traders and investors on the edge of their seats and keep risk aversion elevated.
The Wall Street Journal in a story today sums up why the marketplace is so anxious at present. “Whether world trade collapses, like it did in the 1930s, depends on whether other countries retaliate and Trump negotiates. The last time the U.S. raised tariffs as dramatically as President Trump promised was in 1930. Most historians can tell you what happened after President Herbert Hoover signed the Smoot-Hawley tariff into law that year: Global trade collapsed, aggravating the world’s slide into depression.”
China and the U.S. continue in their tariff stare down, with neither blinking. Some market watchers are focusing on a potential China devaluation of its currency, the yuan, in order for China to get better global trade advantages. Reports said China’s central bank has been weakening its daily reference rate past the 7.2 level versus the U.S. dollar. The yuan versus the dollar is near its weakest level since September of 2023.
The key outside markets today see the U.S. dollar index down a bit. Nymex crude oil futures prices are slightly up and are trading around $61.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note presently at 4.13%. U.S. Treasury yields are on the rise this week despite the risk aversion that is still in the general marketplace. (Such would normally invite flight-to-quality demand for U.S. Treasuries, lowering their yields.) Rising Treasury yields suggest two scenarios: One, that bond market traders (called the smartest guys/gals in the room) think the worst of the stock/financial market turmoil has passed. Or two: The financial turmoil may or may not have peaked but bond traders do expect slowing global economic growth and higher inflation, which is called deflation.
U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook retail sales report, the NFIB small business index.
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