Gold Sees Safe-Haven Demand as World Stock Markets Sell Off
Gold prices are solidly higher and have pushed well above the $1,200.00 level in early U.S. trading Tuesday. Safe-haven demand, short covering and bargain hunting are featured in the yellow metal. It’s a “risk-off” day in the market place Tuesday. World stock markets were under pressure overnight, led by sharp declines in Asian shares, and the U.S. stock indexes are also lower in early dealings. February Comex gold was last up $22.00 at $1,216.00 an ounce. Spot gold was last up $13.30 at $1,218.00. March Comex silver last traded up $0.429 at $16.705 an ounce.
The falling price of crude oil remains in the spotlight of the market place this week. Nymex and Brent crude oil futures prices hit five-year lows overnight. Brent fell to $65.37 a barrel and Nymex fell to $62.25. Both markets have rebounded from their intra-session lows. It was not too long ago that the spread between Brent and Nymex crude was approaching $20.00 and it’s presently around $3.00. The big drop in oil prices recently has traders and investors somewhat anxious—even though lower gasoline prices at the pump will support economic growth by increasing consumer spending in other areas.
Asian stock markets saw pressure Tuesday from a move by Chinese officials to tighten regulation of its domestic bond market. Asian shares were down sharply, partly due to this news.
The World Bank on Tuesday forecast the Russian economy to contract by 0.7% in 2015. The Russian ruble continues under pressure this week and is at a record low versus the U.S. dollar. Reports Tuesday said the Russian central bank is adding more gold to its reserves as the ruble deteriorates.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index, wholesale trade, the ISM semiannual report on business, and the IDB/TIPP economic optimism index. |
