Listen to the latest market mood for the coming session.
Once again the market is very firmly focused on the latest coronavirus outbreak. The Federal Reserve announced an emergency rate cut yesterday of 50bps to support the economy through the coronavirus concerns. In the current environment we are expecting gold and silver buyers for four reasons:
- The Fed rate cut weakens the dollar and will give gold and silver upward pressure
- The coronavirus is still spreading and the number of cases is growing. Expect further infections this week as the virus spreads.
- Bond markets are offering very low yields, so gold and silver are attractive during the low yielding bond environment and if we get negative bond yields on a wider scale that will only increase interest.
- The gold/silver ratio is at a record high, above 95, so silver appears excellent value compared to gold.
Therefore, expect gold and silver buyers at market.
Risk to this outlook: Any positive coronavirus related news that will result in risk-on moves will invalidate this outlook.