|Day's Range||1,803.80 - 1,816.20|
(Bloomberg) -- Gold’s allure is only getting stronger as 2020 unfolds. Spot prices reached $1,800 an ounce and year-to-date inflows into bullion-backed exchange-traded funds have topped the record full-year total set in 2009.Investors have favored havens this year as the coronavirus pandemic rips through economies, spurring sustained inflows into gold-backed ETFs as central banks and governments unleash vast stimulus programs. States across the U.S. recorded new highs in cases and deaths on Tuesday, and Federal Reserve Bank of Atlanta President Raphael Bostic said the resurgence of the virus may be threatening the pace of America’s recovery.“A massive investor response to Covid-19 has pushed ETF holdings to record levels, the impact of which has outweighed the decline in jewelry demand and absorbed increases in recycling,” said James Steel, chief precious metals analyst at HSBC Securities (USA) Inc. Further inflows are expected “as investors respond to elevated risks and low yields,” he said in a note.Holdings in gold-backed ETFs rose to 3,234.6 tons on Tuesday, according to initial data compiled by Bloomberg. That’s up 655.6 tons so far in 2020, topping the rise in tonnage terms seen in 2009. The total has risen each month this year.Spot gold was up 0.2% at $1,798.55 an ounce at 9:36 a.m. in London, after climbing above $1,800 to reach the highest since November 2011. In other precious metals, silver and platinum were higher while palladium was little changed.Bullion prices and holdings are widely expected to extend gains, with Goldman Sachs Group Inc. saying the metal could reach a record $2,000 in the next 12 months and JPMorgan Chase & Co. recommending investors stick with bullion.“Short-term price risks remain skewed to the upside as long as the virus does not come under control,” said Carsten Menke, head of Next Generation Research at Julius Baer Group Ltd.“The near unprecedented fiscal and monetary peacetime response to Covid-19 supplies gold with two substantial bullish inputs: liquidity and debt,” HSBC’s Steel said. “Low interest rates, monetary accommodation including balance-sheet expansion and heavy fiscal spending globally for the foreseeable future will cement and extend gold’s rally.”More Fed support may be on the way. Vice Chairman Richard Clarida said that policy makers would likely turn to additional forward guidance and asset purchases if the economy needs more aid. “There is more that we can do,” he told CNN International.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Asian stocks dithered on Wednesday as an increase in coronavirus cases in some parts of the world undermined prospects for a quick economic recovery while oil prices eased on oversupply fears. MSCI's broadest index of Asia-Pacific shares outside Japan inched up but was still lower than a 4-1/2-month high reached just on Tuesday. Australian shares ended 1.5% lower on renewed fears about the coronavirus pandemic after a rise in cases in the country's second biggest city.
Asian stocks dithered on Wednesday as an increase in new coronavirus cases in some parts of the world cast doubts over the economic recovery while oil prices eased on oversupply fears. MSCI's broadest index of Asia-Pacific shares outside Japan were a tad lower after hitting a 4-1/2 month high just on Tuesday. Japan's Nikkei was off 0.1% and Hong Kong's Hang Seng index was slightly firmer.
Canadian miner Lundin Gold Inc expects to produce between 200,000 and 220,000 ounces of gold this year at its Fruta del Norte gold mine in the Ecuadorean Amazon, its head told Reuters, after restarting operations last weekend. Lundin halted production in March when Ecuador's government declared a health emergency due to the coronavirus pandemic and the firm cut staffing at the site to the mininum required. Ron Hochstein, Lundin's chairman and director, said in an interview on Monday that despite the pandemic's impact this year, the company expects average annual production of 325,000 ounces of gold over the mine's 14-year life span.
S&P; 500 initially fell during the Globex session, but we have found buyers underneath. This is a continual pattern with this market, buyers looking for value.
Silver markets fell on Tuesday but then turned around at the $18.25 level. Because of this and gold trying to break out, silver looks very bullish.
Gold rallied a bit on Tuesday, breaking to a new high. We did not blast through the level so we will probably get an opportunity to buy another pullback.
Gold clocked a gain of 13% in the second quarter of 2020, which is likely to get reflected in gold miners' upcoming second-quarter earnings releases.
The Australian dollar went back and forth on Tuesday, reaching towards the crucial 0.70 level. That is an area that against massive resistance.
Silver continues its attempts to get above the nearest resistance level at $18.50.
The Commitments of Traders report covering positions held and changes made by money managers in the week to June 30. A week that despite mixed price performances saw funds buying 18 out of the 24 major commodity futures tracked in this. The top five included corn, natural gas, soybeans, Brent crude oil and copper.
The Fed could strengthen its forward guidance later this year. Given its dovish bias and the fresh viral outbreaks, it could be positive for gold prices.
The direction of the EUR/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the short-term pivot at 1.1295.
Data from the American Petroleum Institute industry group at 20:30 GMT on Tuesday is expected to show a 100,000 barrel rise in gasoline stockpiles.
G10 currencies may bully the Japanese Yen this week as growing optimism over a swift economic recovery from the pandemic boost appetite for riskier assets at the expense of safe-havens.
Over the short-run, it may be a good idea to keep your powder dry. After all, the long-term trend is still bullish and isn’t even being threatened.
Stock markets are set to finish firmly higher today as the bullish sentiment from China spilled over to the west.
The Aussie Dollar has yet to take a hit, in spite of the latest COVID-19 spikes. Failure to contain the spread, however, will test the Aussie’s resilience.
European stock markets are set to open lower Tuesday, consolidating after Monday’s sharp gains, as investors try to balance signs of a global economic recovery with concerns over the increasing number of new coronavirus cases in the U.S. At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.7% lower. CAC 40 futures in France were down 0.7%, while the FTSE 100 futures contract in the U.K.fell 0.7%.
Investor caution over renewed coronavirus-related lockdowns buoyed the dollar and snapped a five-day rally in most world equity markets on Tuesday, but was not enough to halt a hot streak in Chinese stocks. The dollar edged higher as risk currencies such as the Australian dollar took a breather from recent gains and gold dipped as investors booked profits after bullion rallied to a near eight-year peak, trading around $1,780 an ounce. Bourses in London, Paris and Frankfurt fell about 1% for most of the session before paring some losses, while losses were greater on Wall Street even as the Nasdaq posted a fresh intraday high before closing down.