Gold was higher overnight on more concerns about the global economy and a somewhat weaker dollar. China's total exports fell 20.7 percent in February, and their net exports fell 15.5 percent, elevating concerns about the state of their economy and the global economy in general.
US Ambassador to China Terry Branstad said no meeting between President Trump and Chinese President Xi has been set because neither side thinks they are close enough to a deal. This is in sharp contrast to the optimism seen a week ago.
As reported yesterday, China expanded its gold holdings for the third straight month in February. The World Gold Council expects global central bank buying to reach its highest level in decades, and many analysts are citing this is a primary reason to be long-term bullish towards gold, as Russia "de-dollarizes" and China works at diversifying its foreign-exchange reserves.
After the dovish turn by the ECB yesterday, the trade is focusing on the monthly US jobs report this morning. A weak report could turn the dollar bearish and send gold higher, especially in light of the market's oversold status. However, a strong number would suggest the US economy is the leader of the pack, which could also mean the dollar will be the leader, and this would not bode well for the metals.
May silver was also higher overnight. It too is oversold, but it may have less to gain on short covering and be more vulnerable to further the downside if the stock market stays weak.
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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.
