Daily Market Update – February 6

Gold Rises on Political Risks Concerns

Gold futures are inching higher on Monday, driven primarily by geopolitical risk created by the situation between Iran and the U.S. The U.S. imposed some economic sanctions on Iran, but nothing to really damage its oil production. Any oral responses that mention military action should be bullish for gold.

Traders are also reacting to Friday’s mixed U.S. Non-Farm Payrolls report that probably killed any chances of a Fed rate hike in March and may have shifted it to June.

Gold prices had been taking a hit over the last few months as the Fed was set to hike rates and the Fed had even advised that it would be making further rate hikes this year as well as the economic data from the US started getting better and better.

European Stocks Lower as Italy Banks Fall

European stocks markets are mostly moving lower with the Euro Stoxx 50 in the red. The Italian MIB is underperforming and stuck in negative territory as capital raising plans from UniCreditSpA send Italian bank stocks lower. The DAX is posting marginal losses, as car markets are under pressure and a very strong Q4 orders number was counterbalanced by weak machinery orders data and a drop in the Eurozone Sentix Investor confidence reading. The FTSE 100 is up 0.20% amid an empty local data calendar and as markets prepare for this week’s earnings reports and assess the latest U.S. policy moves.

US Dollar Firms After Friday’s Employment Data

Mixed economic data this morning has played a hand in the Dollar’s resilience. The currency markets were relatively calm also as investors prepared for central bank reports from Australia and New Zealand later in the week. The Euro is trading lower at 1.0721 down 0.57%. US Dollar index pushes higher above 100 to trade at 100.08 0.40% up.

Oil Steadies As Markets Await Iran-US News

Oil futures are trading slightly lower before the regular session opening. The market is trading inside Friday’s range, indicating investor indecision and impending volatility. Traders are waiting for further news regarding the Iran and U.S. issue.

In the meantime, the bulls and bears are likely to continue their tug-of-war as the bulls are buying because of compliance with the OPEC deal and the bears are selling because of the increasing U.S. supply.