Precious metals tumble as US stocks rise to new highs

4:50 PM November 7, 2019

Summary:

  • Gold and Silver swoon in risk off trade

  • Wall St. moves up to new record highs 

  • GBP dips as BoE keeps rates on hold

 

While trade optimism has pushed US indices to all-time highs, precious metals are clearly the losers of this situation. Market optimism drives bond yields higher to the detriment of silver (-2.5% today), platinum (-2%) and gold (-1.5%). Gold price broke through the key support zone of $1480 and this could have triggered stop losses. For silver, there is still a strong support at around $16.80.

 

Once more we got a record open in the US this afternoon with equities receiving a boost earlier on the trade front after comments from China that suggested both Beijing and Washington are set to agree on the phasing out of tariffs. Cynics will point to the fact that once more the market has reacted strongly on trade comments that are far from sure to play out, but for the time being there’s very little to go on as far as bears are concerned.

 

Read our in-depth look at US stocks as they make new all-time highs here. 

 

One of the best performers is Qualcomm with the stock higher by almost 8% after reporting a strong set of results last night.  

 
  • Adjusted EPS: $0.78 vs $0.71 expected

  • Revenue: $4.8B vs $4.7B expected  

 

The strong performance was attributed by the firm to profits that were largely driven by the licensing segment, which generated $1.15B in revenue. “In addition, our QTL results for the third and fourth quarter of fiscal 2019 included royalties from Apple and its contract manufacturers for sales made in the June 2019 and September 2019 quarter, respectively,” Qualcomm said in its statement.

As was widely expected the Bank of England has decided to keep the base rate unchanged at 0.75% but there was some dissent amongst ratesetters. Two of the nine MPC members voted for a cut with Haskel and Saunders the dovish dissenters. Both these called for stimulus now as they believe that “data suggests labour market turning and see downside risks from the global economy.”The pound is trading a little lower on the day but has failed to see much follow through to the downside with political uncertainty still reigning supreme for the currency. 

 

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