Weekly markets round-up for StoneX Bullion

Welcome to a very brief overview of the recent performance in the markets. The essentials are captured in the table below and each week we will show a chart of interest.

After a nine-week period of sideways trading, (we commented last week on the dip towards $1,670 followed by a recovery towards $1,720), gold finally broke out at the end of last week. We had been watching the development of the triangle formation on the charts and sure enough gold broke out last Friday in New York hours to push up towards $1,760 as the S&P staged a minor retreat; prices have continued to advance over Asian hours this weekend. The resurgence of the virus is the primary driver here, but also the re-emergence of geopolitical risk is playing a part. Tensions persist between North and South Korea, with South Korea conducting military drills near the North Korean border – while virus cases are on the rise in the region again.

Meanwhile the infection rate in the United States continues at a 1.2% rate per day, and parts of Latin America are accelerating. Food is again in focus as a potential source of problems, not just with the meat and vegetable market in Beijing, but also with an increase in infections at meat plants in Germany and Brazil, while in a potential risk to the trade deals between the United States and China, the Chinese Government has suspended poultry imports from a plant owned by Tyson Foods Inc. in Arkansas.

In the gold and silver markets, ETF activity has been lively again, with fresh additions of 21t over six days to last Thursday in the gold funds, although there was some light profit taking at the end of the week as prices pushed higher. Silver ETFs have added 551t over the past seven days, In dollar terms, those two amounts to net inward investment of $1.1Bn and $270M respectively.

Meanwhile the U.S. Mint sales of coins have also surged in June; while not at the heady levels of April, when Gold Eagle sales reached 105,000 ounces, twelve times the average over the precious twelve months, sales so far in June have reached 38,500 ounces, so that sales in the year-to-date have amounted to 203,000 ounces, over 2.5 times the amount for the first full six months of last year.

Silver Eagle sales so far in June have reached 907,000 ounces; more than twice May’s level. For the year to date they have attained 11.5M ounces, just 1.5% higher than in the first six months of last year.

The physical market in South and East Asia remains quiet, but things are picking up in the Gulf and there are some early signs of interest in India, although the monsoon is now in full swing, which will keep conditions quiet for the next three months or so.

Gold over the past week, three-minute intervals, against the S&P 500 — Chart for the week