Precious metals are selling off at a blistering pace on Thursday as risk-appetite slowly but surely makes its way back to the market. There hasn’t been much markets-moving economic data on the slate this week, but today saw that change a bit. As has been the case all week long, investors are paying incredibly close attention to a number of geopolitical happenings that have been ongoing over the course of the past few weeks.
Geopolitics Remain On Front-Burner
Since the early parts of last week, investors the world over have been paying particularly close attention to the number of ongoing crises happening in various parts of the world. Just today, a number of news reports indicate that a passenger flight carrying more than 100 people crashed somewhere over the West African nation of Mali. Due to the remote location of the crash, investigators and emergency personnel have not even reach the crash site yet. Though it is unlikely that this incident has anything to do with an ongoing battle between rebel forces and government forces in Mali, the world will wait with bated breath in order to find out.
In addition to that story from today, investors are paying continued attention to the rising tensions between Russia and Ukraine as well as the ongoing military struggle between Hamas and Israel on the Gaza Strip. For more than 2 weeks now, Israeli forces have been bombarding the small strip of land and its mostly civilian inhabitants. As of now, the total death toll from the 2+ weeks of fighting has eclipsed 700. As horrifying as it is, an overwhelming majority of those dead are civilians, including women and children. As international pressure is building, calling for Israel to cease their ongoing attack, investors will continue to pay close attention. Unfortunately for precious metals, however, safe-haven demand as a result of all this violence and investor uneasiness is not anything like it was a week ago. It will be interesting to see if precious metals will continue to fall as we head into the final day of the week and the weekend or if bargain-hunting and more risk-aversion will creep its way back into the marketplace.
Giving precious metals a little bit of support today was an upbeat HSBC Chinese preliminary PMI for July. Compared to June’s reading of 50.7, July preliminary data showed a reading of an even 52. According to the HSBC, any reading above 50 suggests expansion. As you could have probably guessed, Chinese, and most Asian equity markets were given a boost as a result of the positive PMI reading.