( Bloomberg, Mon. Oct. 7 th, 2019) – Gold steadied on Friday at $1,504 per ounce after rising to a 1-week high of $1,519 per ounce in the previous session, after a string of weak economic reports, including a plunge in manufacturing activity to more than a 10-year low in September.

Persistent weakness in global economic indicators against the backdrop of the U.S.-China trade war has led to a 20% rise in gold prices so far this year.

Meanwhile Oil prices edged higher on Friday as U.S. job growth increased moderately in September, with the unemployment rate dropping to near a 50-year low of 3.5%.

Investors are watching for further developments on tensions between the United States and Iran and will be closely watching the U.S.-China trade talks, which resume next week.

DOW POISED TO SINK TO KICK OFF THE WEEK AS INVESTORS READY FOR FOR CHINA/ U.S. TRADE MEETING

Jerome Powell set to deliver remarks at 1 p.m. Eastern Time

(Kitco, Mon. Oct. 7 Th, 2019)-  U.S. stock-index futures Monday morning headed solidly lower to start the week, ahead of a fresh round of high-level tariff negotiations between Beijing and Washington, scheduled to begin in earnest Oct. 10-11. The prospects of upbeat negotiations, however, appear unlikely given the reports that China is advocating for a limited trade agreement.

How are benchmarks performing?

Futures for the Dow Jones Industrial Average (YMZ19) were down 129 points, or 0.5%, at 26,396, those for the S&P 500 index (ESZ19) were off 14.75 points, or 0.5%, to 2,936.25, while Nasdaq-100 futures (NQZ19) retreated 40.25 points, or 0.5%, at 7,727.25.

On Friday, the Dow (^DJI) rose 372.68 points, or 1.42%, to 26,573.72, the S&P 500 index (^GSPC) added 41.38 points, or 1.42% to 2,952.01 while the Nasdaq Composite (^IXIC) advanced 110.21 points, or 1.4%, to 7,982.47.

Last week, the Dow lost 0.92% for a third weekly decline, while the S&P 500 ended 0.33% lower also posting a third down week, but the Nasdaq managed a gain of 0.54% snapping a two week losing streak.

What’s driving the stock market?

Chinese officials are expressing reluctance to hammer out a broad agreement, according to a Bloomberg News (paywall) reported on Sunday, citing people familiar. The report said Vice Premier Liu He, President Xi Jinping’s No. 2, would arrive for discussions in Washington with terms for a deal that won’t include “commitments on reforming Chinese industrial policy” or “government subsidies.”

The new round of Sino-American talks would come as the Trump administration is embroiled in an intensifying impeachment inquiry, which may not directly impact investment sentiment in the U.S., but may be been seen by Chinese officials as weakening the president’s negotiating position, experts told Bloomberg.

Meanwhile, a second whistleblower (paywall), with firsthand knowledge of Trump’s controversial July 25 discussions with Ukrainian President Volodymyr Zelensky, has emerged, adding to pressure on the president’s administration.

The whistleblower complaint, which alleges that the Republican president sought to use the powers of the Oval Office to push Ukraine to investigate Democratic rival Joe Biden and his son Hunter, and that White House officials acted to conceal evidence of those actions, has been the subject of Congress’s impeachment inquiry.

“A second whistle-blower in the Trump-Ukraine scandal will embolden China even more. The optimism over these trade talks had already been washed away with last weeks’ market sell off,”| wrote Jasper Lawler, head of research at London Capital Group in a Monday research report

News that China wants to restrict the topics covered by a trade deal with the US is another blow to getting the comprehensive deal desired by the US,” he said.

Those trade talks also come amid fresh clashes against protesters and Hong Kong law enforcement, following political leader Carrie Lam invoked an emergency law banning face masks, adding fuel to animosities over weekend in the monthslong protest.

Elsewhere, a report on German manufacturing orders declined by 0.6% on the month, official data showed. Economists polled by The Wall Street Journal had forecast a small improvement of 0.2% growth. On an annual comparison, orders plunged by 6.7% adjusted to calendar and price effects.

The economic report follows a key reading of the U.S. labor market showed that the American economy added 136,000 new jobs in September, slightly less than forecast, and the pace of job growth fell to the slowest in four months, but the U.S. unemployment rate dropped to 3.5%, the lowest rate since December 1969.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com