The euro continues to lose ground to other major currencies during early Wednesday trading in Europe. As investors process the full implications of yesterday’s ruling by the German Supreme Court, which effectively blocks the Bundesbank from participating in the ECB’s public sector purchase program, the single currency hit its lowest level in more than 3 years versus the safe haven Japanese yen. The German court’s decision is like a bucket of cold water thrown over those that expected greater cohesion and solidarity between the various member countries of the single currency to try and overcome the tough challenges ahead.
Ricardo Evangelista – Senior Analyst, ActivTrades
In the last few days, we have seen stocks going up, then declining and later recovering again. Despite all these movements, the price of gold has remained relatively stable. The correction seen on Thursday and Friday morning was followed by a strong recovery to the key level of $1,700. Volatility seems to have disappeared this week with bullion waiting for a fresh stimulus and the spot price continuing to trade either side of the threshold of $1,700. Technically the trend remains bullish, as investors are still buying gold as insurance in case of a second wave of coronavirus, while central banks are forced to print large quantities of money to mitigate the crisis generated by the pandemic and the consequent lockdown.
Carlo Alberto De Casa – Chief analyst, ActivTrades