Gold News & Info

Source:Dana Samuelson, American Gold Exchange

AustinGold recovered yesterday’s small decline catching a safe-haven bid back towards 3-month highs, despite the dollar gaining value against most other major currencies. Stocks contrarily renewed their downward trajectory with all major U.S. indices falling 1.5% to 2% following more modest declines in the Asian and European markets overnight.

A risk-off environment prevailed as the combination of the U.S. – China trade war’s impact on economic growth and rising interest rates were exacerbated by the potential for a hard Brexit and the blossoming Italian debt crisis.

Fears of widespread and forced margin calls in China fueled a 3% tumble in the Shanghai Composite Index to 2.486, nearly a four-year low. The index is down almost 30% since January. With over $600 billion of shares pledged as collateral for loans, or 11% of China’s market capitalization, concerns rose that sellers could create a downward spiraling market. The yuan fell 0.3%, to 6.942 per dollar, beyond its August low. Following the U.S. Treasury report that stopped short of calling the Chinese currency manipulators, bets were off that the Chinese government would resist further currency depreciation to bolster their sagging economy.

Selling that began in Asia, continued into the European and U.S. markets. The DAX fell 1.07% to 11,589. U.S. markets were harder hit. The Dow fell over 450 points before recovering some losses, closing down 327 points, or 1.27%. The NASDAQ fell 2.06% to 7,485. The S&P 500 fell 1.4% to 2,768.

In Europe negotiations between Britain and the EU over Brexit faltered, increasing the chances of a no deal Brexit. A scheduled November summit planned to move Britain and the EU into the next phase of Brexit negotiations was called off due to a lack of progress. Increasingly Britain’s Prime Minister Therese May is caught between a rock and a hard place, negotiating not only with the EU’s 27 other countries but with hardline Brexiteers and home as well.

Finally, Italy and the EU continued their standoff over Italian budget proposals for 2019, with Italy refusing to negotiate on their desire to increase its deficit 0.8% of GDP further than established EU rules allow. EU commissioners, in a letter to their Italian counterparts, put Italy formally on notice that their budget proposal would create “particularly serious non-compliance with the budgetary policy obligations.”

At the Comex close: December gold gained $1.4 to $1,228.80; December silver futures dipped 6 cents to $14.60; January platinum fell $9.50 to $831.10; and December palladium fell $5.50 to $1,062.10 an ounce.