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Daily market commentary: Gold hits new record high (yet again)



FOREX

The euro continues to strengthen versus the dollar during early Wednesday trading. The US is seen by many as having fallen behind Europe in its response to the health crisis and in the ability of its lawmakers to commit and deliver a much-needed economic rescue package. American assets are still well represented in many investors’ portfolios but given the current circumstances those investors may now turn to relatively under-priced European instruments in a dynamic that would further weaken the dollar against the single currency.

EURUSD chart

Ricardo Evangelista – Senior Analyst, ActivTrades

GOLD

Gold hits new record high (yet again)

It has been for a long time that we are seeing a structural movement in the bullion price with investors continuing to increase the percentage of yellow metal in their portfolio. The resistance level of $2,000 was disintegrated and the prices gained another $30 with gold achieving new records almost every day.

Technical levels are losing importance in this scenario, which is clearly dominated by a huge hunger for bullion. Investors are not considering technical indicators or the overbought scenario as they are simply buying gold hoping in some cases for quick gains, in others to hedge in case of further corrections of stocks and – particularly – in case of a significant depreciation of the US Dollar.

Carlo Alberto De Casa – Chief analyst, ActivTrades

daily market analysis

EUROPEAN SHARES 

Eurozone share markets from Stockholm to Madrid opened higher on Wednesday as bullish momentum over riskier assets gained a fresh boost from Washington. Investors welcomed the progress made in discussions between US Republicans and Democrats about a new recovery package, especially after the US Treasury Secretary said he wanted a deal reached by the end of the week.

In addition, investors were also pleased to see Washington and Beijing re-thinking their trade deal with each other after a significant rise in tensions over the past few weeks and months.

However, market predictability is becoming more and more difficult for traders and analysts. The appearance of multiple different market drivers pulling stock prices in different directions is now making financial markets much less directional and harder to read on the short-term outlook than was the case a couple of weeks ago. Just like 2019, there is a high chance investors will focus on the outcome of US-Sino discussions over a new trade deal while keeping an eye on macro data with US NFP looming on Friday.

FTSE-MIB chart

Pierre Veyret– Technical analyst, ActivTrades


Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.

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Daily market commentary: Gold hits new record high (yet again)

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