Editor’s Note
Markets opened the week with a divergent tone, as European indices edged higher while U.S. futures pointed lower ahead of a busy schedule of corporate earnings and economic data releases.
Wall Street is expected to open lower on Monday, while European stock markets are advancing at mid-session, as precious metals prices fall at the start of a new week rich in corporate earnings and economic data. New York index futures point to an opening decline of 0.29% for the Dow Jones, 0.7% for the Standard & Poor’s-500, and 1.05% for the Nasdaq.
In Paris, the CAC 40 gains 0.21% to 8,143.98 points around 10:56 GMT. In Frankfurt, the Dax advances 0.29%, and in London, the FTSE 100 rises 0.05%. The EuroStoxx 50 index is down 0.03%, the FTSEurofirst 300 is up 0.03%, and the Stoxx 600 progresses 0.03%.
Traders said pressure on several Chinese investment funds specializing in silver futures contracts exacerbated the decline seen at the end of last week, which intensified on Monday when the CME raised margins on several futures contracts, notably on silver and gold.
The dollar’s rebound on Friday, after Donald Trump’s choice of Kevin Warsh for the Federal Reserve chairmanship—seen by many as less favorable to an ultra-accommodative monetary policy—weighed on Wall Street stocks and worsened the ongoing decline in the price of silver.
Gold and silver continue their decline from the end of last week, after the CME Group increased its margin requirements following a sharp correction.
The price of silver more than doubled in six weeks to reach a record high of $121.64 per ounce on January 29, as part of an unprecedented rally fueled by investor appetite for non-dollar-denominated assets, as well as enthusiasm from retail traders for lucrative returns.
The spot price of gold had soared in recent weeks, partly due to escalating geopolitical tensions, but on Friday, it recorded its largest daily drop since 1983, falling more than 9%, and losing over 3.6% around 10:50 GMT on Monday.
Silver was set to record its largest two-day drop since at least the 1980s. It fell an additional 4.58% on Monday around 10:50 GMT after already losing 30% on Friday.
He added that anyone selling options giving the holder the right to buy silver would have had to hold a long position on silver themselves, in one form or another.
Furthermore, the day is rich in economic data, and investors are still awaiting the US ISM Manufacturing PMI figures at 15:00 GMT.
The Stoxx mining sector falls 1.61% in early trading, with groups like Fresnillo down 4.32% and Endeavour Mining down 4.64%.
The plunge in precious metals prices benefits jewelry makers, with Pandora as proof, rising 7.54%.
Energy stocks suffer with falling oil prices, as operators react to a possible easing of tensions between the United States and Iran.
TotalEnergies falls 1.60%, the worst performer on the Parisian CAC 40, and in London, Shell PLC drops 1.52% and Anglo American PLC 1.88%.
Eramet, whose board announced on Sunday that it had terminated the mandate of its CEO Paulo Castellari, citing differences over operations, falls 7.38%.
US yields are falling. The yield on ten-year Treasuries falls 2.7 basis points to 4.2137%. The two-year yield drops 1.3 basis points to 3.5142%.
The yield on the German ten-year Bund rises 0.2 basis points to 2.8469%. The two-year yield gains 1.2 basis points to 2.0789%.
The dollar holds onto its gains on Monday, as investors ponder what the Fed might look like under Kevin Warsh’s leadership. The dollar gains 0.11% against a basket of reference currencies. The euro gains 0.12% to $1.1862.
Oil prices fall after US President Donald Trump said Iran was in “serious talks” with Washington. Brent crude falls 4.46% to $66.21 per barrel and US light crude (West Texas Intermediate, WTI) drops 4.83% to $62.06.
COUNTRY GMT INDICATOR PERIOD CONSENSUS PREVIOUS
USA 15:00 ISM Manufacturing PMI January 48.5 47.9
(Some data may be slightly delayed)
(Written by Mara Vîlcu)