GLOBAL MARKETS-Gold strides further above $2,000/oz, dollar weakens

GLOBAL MARKETS-Gold strides further above $2,000/oz, dollar weakens

Reuters  | Aug 06, 2020 05:18

GLOBAL MARKETS-Gold strides further above $2,000/oz, dollar weakens

(Adds gold, oil settlement prices, details)

* Gold scales new record, stimulus talks stall

* U.S., European shares rise as earnings shine

* Euro gains on data, dollar dips on rising risk

* Oil moves up on big crude inventory decline

* Graphic: 2020 asset performance

* Graphic: World FX rates in 2020

By Herbert Lash

NEW YORK, Aug 5 (Reuters) - Gold pushed further past $2,000 an ounce on Wednesday in the face of a weak dollar and expectations of more stimulus measures for the pandemic-ravaged global economy, while stocks in Europe and on Wall Street rallied on encouraging corporate earnings.

Oil prices rose to their highest since early March on a big drop in U.S. crude inventories and on the weak dollar, which was pushed lower by data showing euro zone business activity returned to modest growth in July. final Composite Purchasing Managers' Index (PMI) from IHS Markit climbed to 54.9 from June's 48.5, better than a 54.8 flash estimate, indicating significant improvement consistent with the continued easing of lockdowns, analysts said.

Gold set a new record after scaling $2,000 for the first time on Tuesday, as investors seek a store of value on fears government stimulus in response to the pandemic will trigger inflation, devalue other assets and keep bond yields low.

Spot gold prices XAU= rose 1.1% to $2,039.59 an ounce, after earlier reaching a record $2,055.10. U.S. gold futures GCv1 hit a record $2,070.30 and settled up 1.4% at $2,049.30.

The dollar standard of the past 50 years is being openly questioned because of the U.S. Federal Reserve's enormous increase in money supply, said Ryan Giannotto, director of research at alternative ETF provider GraniteShares.

"The dollar is collapsing under the weight of $3 trillion in printed dollars, this all comes out in the wash with higher gold prices," Giannotto said.

Gold has gained nearly 35% so far in 2020 and is one of the year's best-performing assets.

Concerns that the U.S. economy is stalling amid a surge in coronavirus cases has increased calls for more fiscal aid, a move stock investors have welcomed.

But after more than a week of talks and few signs of progress, top Democrats in Congress and White House officials were said to be aiming for a deal to be passed next week. surprise quarterly profit from Walt Disney (NYSE:DIS) Co DIS.N and a slate of upbeat results from healthcare companies lifted sentiment on Wall Street, while European shares rose on a slate of positive results. Disney shares jumped 8.7%.

In Europe, the broad FTSEurofirst 300 index .FTEU3 closed up 0.3% at 1,417.05. London-listed mining groups Rio Tinto RIO.L , BHP Group BPPB.L and Glencore GLEN.L provided the biggest boost, lifting the broader mining index .SXPP up 4.0% on the back of stronger metal prices. MET/L GOL/

The Dow Jones Industrial Average .DJI rose 1.2%, the S&P 500 .SPX gained 0.6% and the Nasdaq Composite .IXIC added 0.4%, on track for another record close. benchmark for global equity markets .MIWD00000PUS rose 0.8% to 563.53, less than 3% from its all-time peak in February. Emerging markets stocks .MSCIEF rose 1.2%.

The dollar extended losses after U.S. private payrolls growth slowed sharply in July, pointing to a loss of momentum in the labor market and overall economic recovery as new COVID-19 infections spread across the United States. ADP (NASDAQ:ADP) National Employment Report showed private payrolls increased by 167,000, far less than an increase of 1.5 million economists polled by Reuters had forecast. U.S. Treasury yields rose after the report, halting their recent trend lower.

"Clearly, we have seen risk appetite rebound on global markets and sort of a return of the theme of a U.S. underperformance relative to world counterparts," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

The dollar index =USD fell 0.3%, with the euro EUR= up 0.5% to $1.1861.

The Japanese yen JPY= strengthened 0.1% versus the greenback at 105.63 per dollar.

The U.S. government bond yield curve steepened as the prospect of increased supply in longer-dated debt dampened prices following the Treasury Department's announcement that it would borrow more this quarter than previously anticipated. 10-year U.S. Treasury US10YT=RR note rose 2.8 basis points to yield 0.5412%.

Oil prices rose. Brent crude futures LCOc1 settled up 74 cents at $45.17 a barrel, while U.S. crude futures CLc1 added 49 cents to end at $42.19 a barrel.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Emerging markets Coronavirus and financial markets GRAPHIC-World FX rates GRAPHIC-MSCI All Country World Index Market Cap GRAPHIC-Global assets in 2020 Gold versus U.S. yields and dollar


Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors. is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.