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Gold Rises on Safe Haven Flows

Gold prices are modestly higher in early U.S. trading Monday, lifted on some modest safe-haven demand and by an upside technical correction following Friday’s strong losses that drive prices to a three-week low. The gold market bears on Friday did regain the slight near-term technical advantage. April Comex gold was last up $5.50 at $1,240.20 an ounce. March Comex silver last traded up $0.206 at $16.90 an ounce.

It’s a “risk-off” day in the market place to start the trading week Monday. That’s bearish for stocks and most commodities but bullish for the U.S. dollar, U.S. Treasuries and gold.

During the weekend concerns increased markedly regarding Greece’s future within the European Union. As he tried to wiggle out of previous sovereign debt repayment commitments, Greek Prime Minister Tsipras also said he would not accept any extension of Greece’s bailout package but instead wanted a bridge loan. This news sunk the Greek stock market and Greek bond yields rose. Other European stock markets also felt selling pressure from the Greece news. The Euro currency was also down against the U.S. dollar. Some EU watchers are wondering if Greece will exit the European Union as soon as the end of the month.

Asian shares were under selling pressure Monday on a bearish economic report coming out of the region’s economic leader. China’s exports and imports were reported at surprising declines in January. Exports were down 4.9% and imports were down a whopping 21.4%, year-on-year.

On the geopolitical front, the U.S. and key European nations are trying to keep a unified stance on the crisis between Russia and Ukraine. Meetings on the matter this week could prove crucial, but Russia appears to be unwilling to budge on its hard-line stance.

U.S. economic data due for release Monday is light and includes the employment trends index.

via Witco [1]

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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