Silver was at $17.552 an ounce in Asian trading on Tuesday. Silver began the day in a retreat from the opening, the last session of the volatile session higher, the final closing up $17.749 an ounce. Silver is down 1.11% for the day.
As the world’s major economies open up to restart their economies, hopes for a recovery are rising. Still, geopolitical risks remain a big concern for investors, as uncertainties persist over relations with The United States and unexpected news about North Korea.
The DEMOCRATIC People’s Republic of Korea (DPRK) will close all communication channels between the Two koreas starting at noon on June 9, the KCNA reported. It is reported that the DPRK authorities will begin from June 9, 2020, 12 when cut off and the abolition of the liaison office has maintained jointly by north and South Korea’s authorities communication link between the koreas, between north and South Korea’s military sea communication link, the two koreas communications test link, the workers’ party of Korea Central Line communications link between the main building and the blue house.
Kim Yo-jong, first vice minister of the Workers’ Party of China (WPK), and Kim Yong-chol, vice chairman of the CPC Central Committee, stressed the importance of changing “work toward the ROK” to “work toward the enemy,” and issued instructions to close all communication channels between the two koreas, the report said.
Last week, North Korea threatened to “torture” Seoul. Ms Kim also demanded that South Korea immediately stop distributing leaflets on the north-south border (denouncing the Kim regime, human rights issues, North Korea’s nuclear ambitions, etc.) or the North would consider tearing up a military agreement aimed at easing border tensions during Mr Moon’s visit in 2018.
South Korea’s Unification Ministry said on June 7 that the DPRK condemned a group of defectors from the North to fly over anti-DPRK leaflets and decided to close the inter-Korean liaison office, saying that the ROK would remain committed to implementing the Panmunjom Declaration and other agreements reached by the DPRK and its leaders.
On June 4, KCNA reported that Kim Yo-Jong, first vice minister of the CENTRAL Committee of the Workers’ Party of Korea, on the same day strongly condemned “defectors” from the ROK who spread anti-DPRK leaflets to the DPRK.
Analysts said the latest news from North Korea highlighted a further escalation in tensions between the two koreas, with safe-haven assets such as precious metals often finding support amid rising geopolitical tensions.
The next step is to keep an eye on developments in North Korea and watch out for unexpected news on China-Us relations, when multiple political risk factors add up to trigger market panic. Precious metals face two possible scenarios: a sharp spike or an indiscriminate sell-off.
On the daily chart, the U.S. dollar index continued its downward trend, with the MACD green momentum slightly narrowing and the KDJ random index slightly flat, indicating a respite from downward momentum, but the overall weakness remained unchanged.
In the 4-hour chart, the DOLLAR index traded in a narrow range at its low, the MACD red momentum column remained unchanged, and the KDJ random index was on the downside overall, indicating that short-term momentum of the DOLLAR is still weak, and the dollar may continue to struggle in low trading.
On the daily chart, silver prices consolidated in a narrow range after falling from the high, temporarily holding above the main moving average, MACD green momentum column slightly enlarged, KDJ random index slightly lower, indicating that silver downward momentum is still in place, the next likely tight pressure finishing.
On the 4-hour chart, silver showed a narrow consolidation trend with the MACD red kinetic column unchanged and the KDJ stochastic turned lower, indicating mixed short-term momentum for the metal, which is also expected to continue into a consolidation session.
Fundamentals positive factors:
- According to real-time statistics of Worldometers, novel Coronavirus confirmed more than 7,188,000 cases and 408,000 deaths worldwide. Nearly one third of these confirmed cases occurred in the United States, with more than 2.02 million confirmed cases and more than 110,000 deaths from novel Coronavirus in the United States. The number of countries with more than 100,000 confirmed cases worldwide has risen to 16.
- Although more restrictions have been lifted in all STATES and more Americans are going out to socialize or protest, novel Coronavirus case rates are on the rise in nearly half of all States. Nationally, coronavirus cases are on the rise in 22 states. In recent days, confirmed cases have declined in about 20 states and remained stable in eight. According to the latest count, the number of coVID-19 cases confirmed daily in California, Texas, Florida and Illinois now exceeds that in New York state, the original epicenter of the outbreak.
- “There will be 100 percent another novel Coronavirus bailout agreement,” said Paula Hassett, chair of the White House Council of Economic Advisers. The details of the next novel Coronavirus bailout will depend on economic data from now through July. Further stimulus would weaken the dollar and give precious metals a boost.
- According to the World Bank, the rapid and huge impact of the coVID-19 pandemic and the economic shutdown caused by containment measures have plunged the world economy into a severe contraction. The world Bank estimates that the global economy will contract 5.2 per cent this year, making it the deepest recession since the second world war, with the largest number of economies seeing output per head fall since 1870.
- During the who’s regular briefing on COVID-19, Ryan, head of WHO’s Health emergency programme, said that with the exception of some countries from Mexico to Chile, Latin America is showing a very worrying growth pattern, and central and South America is now facing the most complex situation in the world.
Fundamentals negative factors:
- On June 8, local time, the Pentagon announced the lifting of the travel ban on five countries and 39 U.S. states. Five are Bahrain, Belgium, Germany, Japan and the United Kingdom. The Pentagon said all 44 countries and the US had “met the conditions for lifting travel restrictions”. California, Florida and North Carolina are among the states not yet eligible to lift travel restrictions.
“Big day for the stock market, smart money and the world know we’re headed in the right direction, and jobs are coming back fast,” U.S. President Donald Trump tweeted On June 8. Next year will be our greatest ever!”
New York City will reopen on Monday. The death toll in New York City, which had been enforcing home orders for 78 consecutive days, exceeded all but six countries. New York City, the largest and most densely populated city in the United States, once the epicenter of the outbreak, on Monday entered the first phase of its reopening plan to allow nonessential workers in construction and manufacturing to return to work and retail stores to provide pickup services on the roadside or in stores.
Last Friday’s (June 5) nonfarm payrolls data from the LABOR Department surprised the market. U.S. nonfarm payrolls unexpectedly jumped 2.509 million in May, the biggest monthly gain in U.S. history since at least 1939, with markets expecting an 8 million drop. The unemployment rate fell to 13.3% from 14.7% in April.