Very calm trading conditions so far this week. By and large, stock markets around the world have enjoyed modest gains over the past two days, buoyed in part by the ongoing trade talks between the US and China in London. Nothing concrete has emerged so far, but such agreements take time to solidify. Encouraging remarks from both parties suggest the discussions are off to a good start, with arrangements concerning rare earth minerals and magnets to be confirmed in the near future. The S&P 500 rose a further 0.5% yesterday, taking the index up to 6,038 points and narrowing the gap to the record high of 6,147 established back in February.
Currencies have had very little to say for themselves over the past few sessions. The Dollar currency index has remained flat around the 99 mark, while the major pairs have been remarkably stable in the absence of any significant market catalysts. The price action in gold suggests that investors have lost interest there as well. The precious metal remains near all-time highs but is now lacking conviction to pick a direction of travel. The huge safe-haven flows pouring into gold were tricky to explain at the best of times, but as the trade drama continues to simmer down, such flows become even more difficult to justify.
More interesting is the story currently unfolding in other precious metals. Silver continued to push higher on Monday, reaching an intra-day high of $36.89 per ounce. Such prices have not been seen in well over a decade but more pertinently, silver is up 27% since the start of the year, putting it neck and neck against gold. Both metals pale in comparison to platinum however, which flew past $1,200 an ounce on Monday and is up a staggering 36% this year. The reason behind the rise in silver and platinum is not clear. It is possible that the long gold trade is overcrowded and investors are looking to funnel money elsewhere. Simple supply and demand could also be a part of the reason, as could the growing popularity of platinum among jewellers and customers.
Cryptocurrencies have also perked up this week. Bitcoin rose back up to $110,000 on Monday, putting it within touching distance of last month’s record of $112,000 per coin. The move carried over to the rest of the crypto sphere and particularly to the DeFi sector, thanks to comments from SEC chairman Paul Atkins, who on Monday told regulators to allow decentralised finance firms to conduct operations with fewer restrictions. The language falls well in line with the new administration’s goal of loosening the regulatory noose that has strangled crypto development in recent years.
US CPI figures are just a few hours away, which should inject some activity into financial markets. Other than that, business as usual.
Risk Warning : Trading derivatives and leveraged products carries a high level of risk.
OPEN ACCOUNT
