Price gains for gold, silver, following Friday’s rout
NEW YORK (October 20) Gold and silver prices are solidly higher on corrective bounces after strong selling pressure on Friday that did produce some near-term technical damage. Better risk appetite in the general marketplace to start the trading week may cap the upside for both metals. December gold was last up $69.30 at $4,282.50. December silver prices were up $0.701 at $50.79.
Markets calmer to start trading week as U.S., China try to ease their tensions. Trader and investor sentiment improved early Monday as President Trump sought to ease trade tensions with China after markets were rattled early Friday by U.S. bank-credit woes. However, solid results from regional lenders helped ease fears about credit quality. “Also, a new round of U.S.-China trade talks is set for this week in Malaysia, with Treasury Secretary Scott Bessent and Vice Premier He Lifeng facing the task of negotiating down new escalatory measures,” reported Bloomberg. “The U.S.-China trade spat appears to be easing with conciliatory comments coming from both the U.S. and China,” said Mohit Kumar, chief economist and strategist at Jefferies International Ltd. When asked by Fox News on Sunday about his threat to raise tariffs on Chinese goods by 100%, Trump said the levy was “not sustainable,” though “it could stand.” The U.S. will “be fine” with China, he added. Bessent virtually met with He on Friday, discussions that Chinese state media described as a constructive exchange of views. Trump on Sunday reiterated he wants China to buy U.S. soybeans. For the first time since at least the 1990s, China hasn’t bought any U.S. soybeans at the start of the export season, a sign that Beijing is once again using agriculture as leverage in its trade negotiations with the U.S.
China’s economic growth slows. China's economy expanded 4.8% from a year earlier in the three months ending in September. That’s slightly better than economists' forecasts. The growth in the first three quarters laid a "solid foundation" for achieving the full-year growth goal of around 5%, according to the National Bureau of Statistics.
The latest data showed weakness in retail sales and fixed-asset investment, but an unexpected uptick in industrial output, which expanded 6.5% in September and exceeded all economists' estimates. “The latest official snapshot of China’s economy marks the start of a high-stakes week for China, as top leaders gather in Beijing at the so-called fourth plenum to hash out development plans for the next five years,” said Bloomberg in a report.
Day 20 of U.S. government shutdown with no end in sight. U.S. senators failed for the 10th time to resolve the U.S. government shutdown impasse in votes last Thursday. The shutdown is now the third-longest funding lapse in modern history, eclipsed only by the shutdowns of 1995 and 2018-19. Shutdowns are a relatively recent phenomenon, having only begun in their current form in 1980, reports CBS News. The House has been out of session since Sept. 19, with no plans to return until the shutdown is over.
Major internet outage. Amazon Web Services (AWS), the world’s largest cloud provider, suffered a widespread disruption today that degraded services for several companies, including artificial intelligence company Perplexity and the Coinbase and Robinhood financial platforms. AWS found a problem with a regional gateway on the U.S. East Coast that’s causing the disruption and is working on “multiple parallel paths to accelerate recovery,” the Amazon.com Inc. company said on the AWS health dashboard. Amazon’s cloud service is the most popular provider globally, underpinning a large chunk of the internet. It accounts for about a third of the cloud market, meaning any outage has major ripple effects.
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed to higher openings when the New York day session begins.
The key outside markets today see the U.S. dollar index firmer. Crude oil prices are down a bit and trading around $57.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.02%.
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