Precious metal tumble; EURUSD dips to lowest level in over 2 years

Summary:

• Strong moves lower in Gold, Silver & Platinum

• EURUSD falls to lowest level in over 2 years

• Navarro quashes latest US-Sino rumour ahead of US session

• Pound bounces despite confirmation of GDP drop 

There’s been some strong selling seen in the precious metals space in recent trade with Gold falling below the $1480/oz mark triggering a wave of sell orders in the markets. Gold has fallen to its lowest level since early August and is down by 2.0% on the day at the time of writing. However, the other markets have been worse hit with Platinum plunging more than 5% and Silver off by 2.7%.

There’s been some selling seen in the EURUSD earlier with the world’s most popular FX pair falling below the 1.09 handle to trade at its lowest level since May 2017. A  potential catalyst for this decline was the release of the latest German inflation figures with the harmonized reading come in below forecasts:

• German harmonized CPI M/M: -0.1% vs 0.0% exp

• German harmonized CPI Y/Y: +0.9% vs -1.0% exp

There was a flurry of activity in US stock benchmarks late on Friday as European traders hoping to call it a week were caught up in another market moving trade story just before the weekend. News that the US is considering restrictions on Chinese companies caused a wave of selling which sent the S&P500 down to its lowest level since early September before the market bounced into the close. 

This afternoon Peter Navarro, an advisor on trade for the White House, moved to quash these reports during an interview on CNBC where he branded them as “fake news”. Stocks are trading firmly higher on the European close with the US500 back near the 2980 handle and over 30 points off the low seen Friday evening. 

This morning A raft of data from the UK came in, on balance, a little on the soft side, with the stand out release showing that, as was widely expected the economy contracted in Q2 with a decline of 0.2% seen in quarter-on-quarter terms. As is often the case Brexit developments had a clear impact here, with the delaying of the original departure date from March 31st meaning that 1st quarter activity was artificially boosted due to provisions for the break and therefore 2nd quarter figures have come in unfavourably in comparison, as contingency measures such as stockpiling were unwound.