Dollar strength up, risk-off! Gold and silver T+D both fell Monday night

Shanghai gold exchange gold T+D closed down 0.08% at 356.15 yuan per gram in late trading on Monday, with the highest bid of 357.08 yuan per gram and the lowest bid of 355.0 yuan per gram. Shanghai gold exchange gold T+D closed up 9 yuan, or 2.59 percent, at 355.98 yuan per gram on Monday, with the highest bid of 357.29 yuan per gram and the lowest bid of 355.13 yuan per gram. Spot gold opened at $1,589.81 an ounce in Asia on Monday morning, dipping as low as $1,570.86 and rising as high as $1,591.80 to close at $1,576.49, down $12.21 or 0.77 percent.

Shanghai gold exchange silver T+D closed 0.40 percent lower at 4,267.00 yuan per kilogram late Monday, with the highest bid at 4,286.0 yuan per kilogram and the lowest at 4,253.0 yuan per kilogram. Shanghai gold exchange silver T+D ended Monday up 43 yuan, or 1.02 percent, at 4,268.00 yuan per kilogram, with a high of 4,320 yuan per kilogram and a low of 4,267 yuan per kilogram. International spot silver was trading at $18.03 an ounce in early Asian trading on Monday, dipping as low as $17.55 an ounce and rising as high as $18.09 to close at $17.66, down 26 cents or 1.47 percent.

Gold fell 1 percent on Monday, retreating from its highest level in nearly four weeks, as China took steps to protect its economy from a coronavirus outbreak and a stronger us dollar stopped some flows into safe-haven assets.

Spot gold fell $10, or 1 percent, after hitting its highest level since January 8 at $1,593.30 an ounce. COMEX gold for April delivery closed down $5.50, or 0.35%, at $1582.40 an ounce.

China’s central bank unexpectedly cut the reverse repo rate, pumping 1.2 trillion yuan into the market.

Stock markets in Europe and the United States rose slightly, but global markets fell to seven-week lows. The dollar rose about 0.3 percent against major currencies, rebounding from a two-week low hit the previous session.

As of February 3 at 23:36, a total of 17,345 cases have been confirmed, 524 have been cured, 361 have died and 21,558 have been suspected, according to Tencent news.

Since the first case was reported in the Chinese city of wuhan last December, the city’s new coronavirus pneumonia has spread to other parts of the world, according to reports. According to the latest CNN report, wuhan coronavirus pneumonia has spread to 27 countries and regions outside mainland China.

Officials at the U.S. centers for disease control and prevention (CDC) recently confirmed that 11 cases have been confirmed in the United States, two of which were transmitted through human contact within the country. Officials also said the US would send more flights to evacuate Chinese nationals from wuhan. Nancy Messonnier, director of the national center for immunization and respiratory diseases, said the passengers will be quarantined for 14 days after they return to the United States.

And so far, 10,000 Americans have died of the flu, according to a new CNBC report, as a new coronavirus rages and world leaders close borders to protect their citizens.

The world health organization’s director-general, tandesay, said it was “dangerous” that the world might not be prepared for the next pandemic.

Speaking at a meeting of the who’s an executive board in Geneva, Mr. Tantice urged 196 member states to “invest in prevention” rather than “panic”. He said funding for past outbreaks in neighboring countries was “still woefully inadequate”.

Gold is often used as a safe store of value in times of political and financial uncertainty. Gold had its best week in a month in the week to Jan. 31.

Data released on Friday showed speculators trimmed their long positions in the COMEX gold contract for the week ended Jan. 28.

Fundamentals of positive factors

  1. According to Tencent News, as of February 3 at 23:36, a total of 17,345 cases have been confirmed nationwide, 524 cured, 361 dead and 21,558 suspected cases. From 0:00 to 24:00 on February 3, 2020, there were 2,345 new cases of pneumonia caused by the new coronavirus in hubei province. By 24:00 on February 3, 2020, a total of 13,522 cases of pneumonia infected with the new coronavirus had been reported in hubei province.
  2. U.S. construction spending fell 0.2 percent in December from expectations of 0.5 percent, down from 0.6 percent. U.S. construction spending unexpectedly fell in December, the first decline since June, as an investment in both private and public projects fell. For all of 2019, U.S. construction spending fell 0.3 percent, the first decline since 2011.

U.S. GDP grew 2.1% in the fourth quarter, the same as in the third quarter, and in line with the expectations of economists surveyed by dow Jones. Still, preliminary estimates released by the Commerce Department on Thursday showed the economy expanding at 2.3 percent for the full year, down from 2.9 percent in 2018 and 2.4 percent in 2017, Mr. Trump’s first year in office.

  1. U.S. jobless claims for the week ended January 25, released on Thursday, were revised to 223,000 from 211,000, with 216,000 expected.
  2. The federal reserve left interest rates unchanged as expected on Wednesday (January 29), offering no new guidance on its balance sheet, but Powell noted that “uncertainties remain in the outlook, including those caused by the new coronavirus.” As fed chairman colin Powell’s remarks continued, traders raised their bets that the central bank would ease policy in 2020. A rate cut would put downward pressure on the dollar index, and gold is expected to get a boost.

The monthly index of pending home sales, released on Wednesday, fell 4.9 percent in December and is expected to rise 0.7 percent, compared with a 1.2 percent gain, as the supply of homes hit a record low.

According to figures released by the US department of commerce on Wednesday (29 January), the deficit in goods trade was $68.3 billion in December, up from $63 billion in November. The US trade deficit in goods widened in December for the first time in four months, just three months after an upturn in trade patterns that helped boost economic growth.

On Tuesday, U.S. core capital goods orders fell by the most in eight months in December as weak shipments showed business investment contracted for the fourth straight quarter, dragging on overall economic growth. U.S. orders for non-defense capital durable goods excluding aircraft rose to a minus 0.9 percent monthly rate in December as demand for machinery, primary metals and electrical equipment, household appliances and components fell.

Fundamentals are negative

The institute for supply management said on Monday that its manufacturing PMI rose to 50.9 in January, the highest since July, from 47.8 in December. A reading above 50 indicates expansion in manufacturing, which accounts for 11 percent of the U.S. economy. The ISM index has been below 50 for five straight months. Analysts surveyed had expected the index to rise to 48.5 in January from 47.2 in December.

The University of Michigan’s consumer confidence index was 99.8 in January, compared with expectations of 99.1 and the previous reading of 99.3, according to data released Friday. U.S. consumer confidence was slightly higher than expected and close to a cyclical peak on the back of a strong job market and strong income growth.

Data released on Friday showed the personal consumption expenditure (PCE) price index rose 0.3 percent in December from the previous month, the biggest gain since April. U.S. prices rose 1.6 percent in December from a year earlier, the biggest gain in a year.

The conference board’s consumer confidence index for January, released on Tuesday, was 131.6, well above expectations of 128 and above the previous reading of 126.5.

The Richmond fed manufacturing index for January, released on Tuesday, was at 20, with expectations for a reading of -3 compared with a previous reading of -5.

Us durable goods orders for December 2019 rose by a better-than-expected 0.3% a month and fell by 2.1%, according to data released on Tuesday.

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