Precious Metals Continue to Rally on Labor Day; U.S. Stock Futures Point to Volatile September Start

Gold and silver prices notched fresh gains on Monday, as futures traders continued to bid up precious metals against a backdrop of economic and political uncertainty. U.S. stock futures traded lower across the board, pointing to a volatile start to September trading.

Precious Metals Rally

Gold for December settlement, the most actively traded futures contract, jumped to a session hihg of $1,544.50 a troy ounce on the Comex division of the New York Mercantile Exchange. The futures contract was last up $5.70, or 0.4%, at $1,535.10 a troy ounce. The yellow metal is up nearly 20% this year.

Gold’s bull market is intensifying. The yellow metal peaked at $1,565.00 a troy ounce in late August, the highest in over six years. | Source: Bloomberg.

Silver futures also rallied sharply on Monday, reaching a high of $18.76 a troy ounce. The grey metal was last up 28 cents, or 1.5%, at $18.62 a troy ounce.

The gold/silver ratio used by investors to determine when to buy and sell precious metals fell 0.4% to 82.37. That means 82.37 ounces of silver are needed to purchase one ounce of gold. The ratio was higher than 93 back in early July.

U.S. Stock Futures Tumble

U.S. equity futures declined sharply on Monday, as markets reacted to fresh tariff hikes by the United States and China.

Dow Jones Industrial Average (DJIA) futures were off more than 300 points, according to Bloomberg. The September mini contract was last down 95 points, or 0.4%, at 26,311.00.

Dow futures point to a volatile start to September trading. | Source: Bloomberg.

S&P 500 futures tumbled 0.4% to 2,912.75. The Nasdaq 100 mini futures contract edged down 0.5% to 7,654.50.

Regular New York trading was closed on Monday for Labor Day. Markets will resume regular trading hours on Tuesday.

September is a notoriously difficult month for U.S. stocks. As Barron’s reports, September has been the worst month for the S&P 500 stretching all the way back to 1950. Over the past 58 years, the large-cap index has fallen an average 0.5% during the month. September’s record has improved over the past ten years, gaining an average of 0.9%.

The Week Ahead

Developments around U.S.-China trade negotiations will dominate the headlines this week after Beijing’s Commerce Ministry revived hopes of a face-to-face meeting later this month. On Sunday, both countries implemented new tariffs on each other’s goods, prolonging a trade that has impacted both economies.

Economic data will also be in the spotlight this week as the U.S. Department of Labor releases the latest nonfarm payrolls numbers. Economists are forecasting a monthly gain of 159,000 jobs in August following an increase of 164,000 in July. The unemployment rate is forecast to hold steady at 3.7%.

Latest figures on factory orders, manufacturing PMI and construction spending will also be released throughout the week.

On the policy front, the Reserve Bank of Australia and Bank of Canada are set to vote on interest rates this week.

Featured image courtesy of Shutterstock. Charts via Bloomberg. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi