Gold ends higher as China-U.S. tensions seen escalating; Silver rallies over 6%
Gold futures on Monday settled higher, resuming a strong uptrend for the precious metal after snapping a five-session win streak on Friday, as China imposed fresh sanctions against U.S. officials in apparent retaliation for similar measures against Hong Kong and mainland officials last week.
China said it would impose sanctions on 11 U.S. citizens, including Republican Sens. Ted Cruz and Marco Rubio.
“Gold is higher on the China news enhancing new buying after profit-taking last Friday,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities. December gold GCZ20, -0.62% GC00, -0.62% added $11.70, or 0.6%, to settle at $2,039.70 an ounce, after the metal lost 2% on Friday, cutting into its weekly gain of 2.1%. The commodity has climbed for nine consecutive weeks, marking its longest such streak since the period ended May 12, 2006.
China’s move comes as tensions between the U.S. and China, partly centered on Beijing’s perceived handling of the COVID-19 pandemic and national-security laws being imposed in Hong Kong, have been escalating on a number of fronts, including the decision by the superpowers to force the closures of respective consulates in Houston and the southwestern Chinese city of Chengdu.
Big tech is bubbling up and could spark a correction, BTIG’s Julian Emanuel warns
The market’s biggest winners may be in a bubble. BTIG’s Julian Emanuel is telling clients to consider trimming their exposure to big tech stocks.
“Where the risk is disproportionate is in technology,” the firm’s chief equity and derivatives strategist told CNBC’s “Trading Nation” on Monday. “That’s where our concerns start to bubble up.” According to Emanuel, Facebook, Apple, Amazon, Microsoft and Google are the most vulnerable.
“There’s a misalignment or a bubble, if you will, in the relative performance between top and bottom sectors,” “The technology sector has outperformed energy by 78.2% [in the last year.] It’s really an astounding number.”
He’s concerned a pocket of bubbles in tech could spark a 10% decline in the tech-heavy Nasdaq, which has hit all-time highs 35 times so far this year. It closed lower on Monday, but the Nasdaq is still just 1% from its record high.
“This is the kind of time where if you’ve got outside gains in some of these high-flying tech names, you probably want to rotate towards some of the laggards,” Emanuel said. “It’s sort of a mini portfolio rebalancing the same way we advised clients to pair back their fixed income exposure and buy stocks in late March.”
Emanuel, who came into 2020 as one of Wall Street’s biggest bulls, isn’t sure what could prick the “bubble.” He suggests it could be anything from escalating U.S. tensions with China to the presidential election to nothing at all just like the 2000 tech bubble collapse.
Gold, silver bulls keep tight grip on their markets
Gold prices are solidly higher in midday U.S. trading Monday, while silver prices are sharply up. Both metals hit new for-the-move highs last Friday. Gold notched a record high of $2,078.00, basis October Comex futures, while silver hit a more-than-seven-year high of $29.915, basis September Comex futures. Some mild profit taking from the futures traders did pull prices off their highs, but bulls quickly stepped in to buy the dips. October gold futures were last up $17.00 an ounce at $2,035.30. September Comex silver prices were last up $1.565 at $29.095 an ounce.
Importantly, the charts still suggest the path of least resistance for gold and silver markets is still higher. Global stock markets were mostly up in overnight trading. The U.S. stock indexes are mixed in midday New York trading. Global traders and investors were somewhat assuaged by the weekend news that President Trump has tried to move unilaterally to provide more economic assistance to Americans, as the Congress has seen no progress on the matter. Whether Trump succeeds remains to be seen.
Associated Press/ Christopher Rugaber
US employers post more jobs in June, pull back on hiring
U.S. employers advertised more jobs in June compared with the previous month, but overall hiring fell, painting a mixed picture of the job market.
The number of jobs posted on the last day in June jumped 9.6% to 5.9 million, the Labor Department said Monday, a solid gain but still below the pre-pandemic level of about 7 million. And employers hired 6.7 million people in June, down from 7.2 million in May, a record high.
The figures suggest that restaurants, bars, retail shops, and entertainment venues — businesses that were subject to shutdown orders in April — continued to bring back workers at a healthy pace. Job openings in those industries also rose. But outside those categories, employers remain reluctant to bring on new workers, a trend that could weigh on the economy in the coming months. Hiring slowed sharply in manufacturing, construction, and health care services in June.