KITCO/Jim Wyckoff

Gold, silver prices up on safe-haven bids amid U.S.- China tensions

gold and silver gains“Gold and silver prices are posting good gains in early U.S. trading Monday, on safe-haven demand amid increasing U.S.-China tensions that threaten another trade war, or worse. June gold futures were last up $17.40 an ounce at $1,718.80. July Comex silver prices were last up $0.152 at $15.015 an ounce.

The U.S. is ratcheting up its rhetoric blaming China for delaying reporting of the coronavirus outbreak in its early stages, and even implying the virus could have come from a Wuhan laboratory. This escalation in U.S.-China tensions could thwart the partial trade agreement the world’s two largest economies reached in January. President Trump has threatened new trade tariffs and other sanctions could be levied against China.

Global stock markets were mostly down in overnight trading. U.S. stock indexes are pointed toward lower openings when the New York day session begins. On the front burner of the market place this week is strained U.S.-China relations. The Covid-19 pandemic and its destructive impact on the global economy also continue in focus. Purchasing managers’ surveys from around the world, released Friday and Monday, show unprecedented contraction in that important sector of economies during the month of April.

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MarketWatch/Callum Keown

This year is lining up exactly like the 2000 dot-com bubble crash — stocks will drop 40% from here, former Goldman manager says

“It’s Monday and stocks are falling again.

A number of U.S. states have started efforts to restart their economies, but that sliver of positive news has been cast aside by the ramping up of tensions with China and the economic impact of coronavirus.

Billionaire investor Warren Buffett’s gloomy remarks about airlines have also caught investors’ attention, as his company Berkshire Hathaway reported a near $50 billion loss in the first quarter and is sitting on a $137 billion cash pile. April produced the best monthly gains for the Dow Jones Industrial Average and S&P 500 in 82 years — after the worst first quarter in history — but May’s bad start looks set to continue Monday with futures down.

In our call of the day, former Goldman Sachs analyst Will Meade said the rest of the year looked even worse for stocks, predicting a 40% drop over the rest of 2020.”

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CNBC/Eustance Huang

Gold has ‘growing potential’ to break $1,800 an ounce, says UBS

gold barsGold prices could “break the highs” seen earlier this year, after declining in March along with assets across the board, according to UBS Investment Bank’s Joni Teves.

“There is growing potential (for gold) to break $1,800 (per ounce) in my view,” Joni Teves, precious metal strategist at UBS Investment Bank, told CNBC’s “Squawk Box Asia” on Monday. In the near term, the firm has a target price for gold at $1,790 per ounce.

That comes as “investor interest continues to grow in this environment of uncertainty and negative real rates,” Teves said.”

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BLOOMBERG/Justin Carrigan

Bad Start to May Is a Sign of Things to Come for Markets

bad start to may“Sell in May and go away? The negative start to the month raises concern that the partial recovery in April is going to be about as good as it gets for risk assets.

For all the optimism stemming from the gradual easing of lockdown measures in some of the biggest economies, there are too many worries on the minds of traders to sustain the momentum from last month. The fear of a second wave of coronavirus infections, the collapse in corporate earnings and the shocks reverberating from the economic data are toxic enough. Now throw in a new eruption of political sparring between the U.S. and China, this time over the origin of the virus.

“A fresh threat of U.S.-China tariff escalation is yet another aftershock of the original crisis that is reinforcing a dollar-supportive backdrop,” said JPMorgan Chase & Co. currency strategists including London-based Paul Meggyesi and Meera Chandan.

On Monday, Asian and European markets provided a taste of how the week may unfold. Hong Kong’s Hang Seng Index tumbled 4.2%, while French and German stocks sank more than 3%. S&P 500 Index futures retreated as much as 1.8%. Japan and China’s onshore markets were shut for holidays.”

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