Precious Metals Rebound as Focus Turns to Energy, Economics, and Earnings

February and Groundhog Day arrive with investors in a mixed mood. The US Dollar rally that unsettled markets on Friday appears to have paused, allowing Gold, up 1.5%, and Silver, up 5.1%, to claw back some of their recent losses. Copper continues to slide, down 1.9% today.

The price of Oil is under pressure, down 5.1% on reports that the US and Iran may be planning further talks to diffuse tensions in the Middle East. Over the weekend, OPEC+ agreed to maintain current production levels through March. Natural Gas is down 17.7% as temperatures in key consuming regions move out of their recent deep freeze.

Dow Futures have stabilised this morning, though NASDAQ futures remain under pressure, down 0.7% so far today. This comes despite a 4.7% gain for Oracle in premarket trading after the company announced plans to raise approximately $50B in cash this year to fund AI and Cloud investments. European equities are climbing, with gains of 0.8% for the DAX and 0.6% for the FTSE.

This week’s busy earnings slate is off to a solid start, with Walt Disney beating expectations ($1.63 vs Street $1.57). US headliners later this week include Advanced Micro Devices*, Suncor Energy, and drugmakers Merck and Pfizer on Tuesday; Alphabet*, Qualcomm, and MetLife on Wednesday; followed by Amazon.com, BCE, and Telus on Thursday.

Manufacturing PMI reports from Europe and the UK have come in better than expected this morning, as did Friday’s strong US Chicago PMI report (54.0 vs Street 44.0). China Manufacturing PMI (49.3 vs Street 50.0) came in below expectations and remains slightly below the 50 level, in contraction territory. Canada Manufacturing PMI (previous 48.6) is due at 9:30 am EST, followed by US ISM Manufacturing PMI (Street 48.5) at 10:00 am.

Early Tuesday, the Reserve Bank of Australia is widely expected to announce a 0.25% interest rate increase. The Bank of England and the European Central Bank are expected to remain on hold when they meet on Thursday. Economic data continues to roll out through the week, highlighted by Services PMI reports and US ADP payrolls on Wednesday, followed by US Nonfarm Payrolls and Canada employment data on Friday.

*Shares of Alphabet and Advanced Micro Devices are held in portfolios managed by SIA Wealth Management

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