Gold and silver prices surged sharply on the evening of February 9. The rally was driven by a sudden "black swan" event in UK politics and increasing expectations for the Federal Reserve to cut interest rates.
Gold and silver prices climbed rapidly. At the time of writing, spot gold was trading at $5,040.88 per ounce, up 1.5%, while spot silver reached $81.601 per ounce, gaining nearly 5%. Domestic futures markets opened higher during the night session, with Shanghai gold and silver contracts following the upward trend in international markets.
On one hand, market participants anticipate the upcoming release of weak U.S. employment data, which has heightened expectations for a Federal Reserve rate cut. Kevin Hassett, Director of the National Economic Council, stated in a CNBC interview that employment figures are expected to be lower but should not cause panic. His remarks confirmed the likelihood of soft employment data, leading to a sharp decline in the U.S. dollar index.
On the other hand, a political "black swan" event in the UK has impacted the country's financial markets. According to reports, Tim Allen, the communications director for UK Prime Minister Keir Starmer, resigned on February 9, becoming the second senior official in the Prime Minister's office to step down within 24 hours. This follows the resignation of Morgan McSweeney, the Prime Minister's Chief of Staff, who left office due to the involvement of former UK Ambassador to the U.S. Peter Mandelson in the Epstein case.
The political crisis quickly spread to UK financial markets. The FTSE 100 index continued to weaken, turning from gains to losses, and was down 0.26% at the time of writing. The British pound fell against the euro by as much as 0.5%, hitting its lowest level since January 22. Meanwhile, the yield on UK 10-year government bonds rose, approaching its highest level since November of last year.
In U.S. stock markets, the three major indices showed mixed performance. Most storage sector stocks pulled back, with Micron Technology and SanDisk falling over 5% at one point, though losses narrowed by the time of writing.
Most U.S.-listed Chinese stocks opened lower but continued to rally throughout the session. At the time of writing, the Nasdaq Golden Dragon China Index was up 0.11%, after having fallen more than 1% earlier.
Comments