Earnings Reports and Trade Optimism Take Precious Metals Lower

Precious metals, specifically gold, silver and platinum are trading under moderate to strong selling pressure today. The only precious metal to be bucking this trend is palladium which has traded to a new all-time record high above $1700 per ounce. In fact, as of 4:50 PM EDT palladium futures are currently up 0.83% and fixed at $1701 per troy ounce.

The other precious metals traded as a polar opposite to palladium today with gold futures losing 0.85%, which is a net decline of $12.60. December futures are currently fixed at $1485 per ounce. Platinum suffered a little bit more severely losing 1.07% in trading today, which is a decline of $9.50 putting an ounce of the precious white metal at $889.90. By far silver sustained the largest percentage drawdown today giving up 1.55%. After factoring in today’s decline of 27.5 cents silver futures are fixed at $17.435.

Weighing heavily on the minds of traders and market participants is information on Friday’s announcement by the United States and China that they had reached an agreement of sorts, the first phase of a trade deal. However, it was the solid performance in U.S. equities that attracted investment dollars to move from the safety of  safe haven assets such as gold and into risk on assets such as equities in hopes that stocks would offer a greater return.

As far as last week’s trade negotiations go, market participants and analysts have only been privy to the spin being placed on the negotiations, rather than any real hard-core content. Whereas yesterday the spin on phase one, turned negative as China mentioned that it would not sign anything until both sides met at least one more time to clarify the terms of the agreement. That changed today as China put a positive spin on the trade talks stating that “Beijing says it is on the same page is Washington in seeing progress in their 15-month-old dispute.” This according to the South China Morning Post.

According to the South China Morning Post, China plays up purchases of U.S. farm goods in positive spin on trade talks. China talked up progress on trade with the U.S. on Tuesday, highlighting bulk purchases of American farm products it had already made this year and saying that it was “on the same page” as Washington in negotiations.

 When asked if the two countries agreed on the degree of progress from two days of high-level talks in Washington last week, Chinese foreign ministry spokesman Geng Shuang said, “China and the US are on the same page and have no difference in the stance on reaching a trade deal.”

The current trade war between the United States and China has definitively put the global economy under extreme pressure. In fact, according to the new IMF chief, Kristalina Georgieva said in her maiden speech today that, “The trade war between China and the United States could cost an increasingly fractured global economy about US$700 billion, or 0.8 per cent of gross domestic product, by 2020.”

Wishing you as always, good trading,