A post-Brexit recovery across European markets stalled on Monday with major share indexes mixed while safe-haven demand for precious metals helped the price of silver surge to a near-two year high.
Light trading volumes ahead of a public holiday in the United States is likely to keep markets choppy through the day.
Europe’s Stoxx 600 fell 0.3 percent and London’s FTSE 100 .FTSE fell 0.1 percent with weaker financials offsetting gains from shares in mining companies.
Earlier in the day, the Australian dollar recovered from a wobbly start caused by political uncertainty while Asian shares and base metal prices rose, partly on expectations of economic stimulus from China.
JPMorgan strategists warned investors against chasing the rally in risky assets.
“We do not believe that we will see a sustained upmove. Positioning is not washed out, market internals are not positive and political uncertainty will linger,” they wrote in a note.
Caution is likely to persist through the week with the Bank of England scheduled to publish its quarterly financial stability report on Tuesday, the June U.S. Federal Reserve meeting minutes due on Wednesday and U.S. jobs data on Friday.
In bond markets, borrowing costs in the euro zone rose for the first time in more than a week as investors took prices down to make room for some 20 billion euros of bond supply from the region this week, halting a post-Brexit slide in yields.
Sterling was little changed at $1.3279 GBP=D4, nursing its losses after an 11-percent plunge to a 31-year trough of $1.3122 a week ago following last month’s shock Brexit vote.
The weekend’s headlines were dominated by mixed messages from the candidates seeking to replace David Cameron as Conservative Party leader and prime minister, offering markets little certainty about the outlook for the months ahead.
Crude oil prices extended gains from Friday’s surge after comments by the Saudi energy minister that the oil market is heading towards balance despite signs of slowing demand in Asia.
Spot gold XAU= added 0.6 percent to $1,350.40 an ounce after gaining 1.5 percent on Friday and about 9 percent in June.
Silver XAG= spiked 1.4 percent higher to $20.01 an ounce, breaking the $20-dollar level for the first time in nearly two years.