Global stocks and bonds fell the most since the Brexit panic today as recently dormant volatility came back with a vengeance. There are deepening concerns that global central banks’ ultra loose monetary policies have been ineffectual and may indeed be creating asset bubbles in stock, bond and indeed property markets internationally.
European stocks fell sharply with the Stoxx Europe 600 shed 1.8% by late morning and leading European indices down by roughly 2%, on course for their biggest losses since June.
In Asia, Hong Kong’s Hang Seng Index fell 3.4% in its worst day since February. Stock markets in Shanghai, Japan and Australia all closed with losses of around 2%.
U.S. stock futures pointed to a 0.8% opening loss for the S&P 500 after on Friday, it saw its biggest daily drop since the U.K. referendum.
Bonds also came under selling pressure with the yield on German Bunds rising above zero to 0.04 percent, their highest since Britain’s Brexit vote in late June. The rise in lower-rated euro zone countries’ yields was even sharper.
“Super Mario’s” euro printing debt monetisation has artificially suppressed yields in recent years. The 10-year Portuguese yield is up 7bp to 3.23 per cent and Italian benchmarks are adding 4bp to 1.30 per cent.
Irish 10-year bonds yield climbed 3 basis points to just 0.52 percent despite Ireland still having a monumental debt burden and recent warnings by the central bank of Ireland that the nation is exposed to “international shocks.”
It smells like the start of a much over due correction in stock and bond markets. The question is whether it is just another correction, the start of bear market or worse, another crash.
Brent crude oil dropped 1.9% to $47.12 a barrel and base metal prices retreated, weighing on shares of energy and mining companies which were some of the largest losers on the FTSE.
Gold performed relatively well despite the rout in stock and bond markets, however silver fell 1.4%.
Gold was just $2.40 lower at $1326.40/oz and was consolidating after the gains of last week when gold rose 0.25% from $1324/oz to $1328.80/oz. Indeed, it was gold’s second consecutive weekly higher close which is bullish from a technical perspective. Markets being sentiment and momentum driven this could mean the recent correction is over as technical driven traders are likely to take signal from this and go long gold.
Bloomberg warned that a selloff in fixed income is showing signs of snowballing into a global market rout. This bodes well for gold in the coming months and underlines the importance of being diversified and having an allocation to physical gold.
Gold and Silver Bullion – News and Commentary
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Gold Prices (LBMA AM)
12 Sep: USD 1,327.50, GBP 1,000.80 & EUR 1,182.54 per ounce
09 Sep: USD 1,335.65, GBP 1,004.68 & EUR 1,184.86 per ounce
08 Sep: USD 1,348.00, GBP 1,009.11 & EUR 1,195.81 per ounce
07 Sep: USD 1,348.75, GBP 1,008.60 & EUR 1,199.85 per ounce
06 Sep: USD 1,330.05, GBP 997.94 & EUR 1,191.46 per ounce
05 Sep: USD 1,328.30, GBP 996.23 & EUR 1,189.49 per ounce
02 Sep: USD 1,311.50, GBP 987.95 & EUR 1,172.74 per ounce
Silver Prices (LBMA)
12 Sep: USD 18.72, GBP 14.11 & EUR 16.68 per ounce
09 Sep: USD 19.41, GBP 14.58 & EUR 17.23 per ounce
08 Sep: USD 19.93, GBP 14.90 & EUR 17.65 per ounce
07 Sep: USD 19.92, GBP 14.89 & EUR 17.71 per ounce
06 Sep: USD 19.60, GBP 14.70 & EUR 17.55 per ounce
05 Sep: USD 19.46, GBP 14.60 & EUR 17.43 per ounce
02 Sep: USD 18.75, GBP 14.15 & EUR 16.76 per ounce
Recent Market Updates
– Gold, Silver, Blockchain and Fintech – Solutions To Negative Rates, Bail-ins, Cash Confiscations and Cashless Society
– Jan Skoyles Appointed Research Executive At GoldCore
– Silver Bullion Surges 3.5% To Over $20/oz
– Ireland “Especially Exposed” To “International Shocks” Warns Central Bank
– Deutsche Bank Tries To Explain Failure To Deliver Physical Gold
– Physical Gold Delivery Failure By German Banks
– Avoid Paper Gold – “Gold Delivery” Refused By Gold Exchange Traded Commodity
– Debt Bubble in Ireland and Globally Sees Wealthy Diversify Into Gold
– “Why Case Against Gold Is Wrong” – James Rickards
– Obama To Leave $20 Trillion Debt Crisis For Clinton Or Trump
– Gold Bullion Averages Biggest Seasonal Gains in September Over Past 20 Years
– Gold Futures See Massive $1.5 Billion “Non Profit” Liquidation In “One Minute”
– Jim Grant Is “Very Bullish On Gold”