Gold Races Higher on Virus Woes/Stimulus Prospects

Metals

Precious metals extended their upside rally supported by increasing prospects of further stimulus. The fiscal and monetary stimulus in top economies are the world, are supporting the flow towards precious metals. The price of a gold ounce ascended to $1824, the highest since late 2011, the price of a silver ounce shot higher to $20.46, the highest since 2016, and palladium futures rallied to $2124.

Equities

Major US stock-index futures rose significantly as hopes of coronavirus vaccine, and the next round of stimulus boosted investors' risk appetite. In addition to the previous positive announcement by Pfizer and BioNtech about their vaccine, AstraZeneca and Oxford University vaccine showed a positive immune response in an early trial. The optimism over a vaccine, crushed woes over the coronavirus spread. On the other hand, market participants are looking forward to the next round of stimulus, which would support the economic recovery. The tech sector was among the top performers with Nasdaq rising almost 4% this week to 11054, 3 points short from a record high, the Dow Jones Industrial Average futures rose to 26792, and S&P500 futures soared to 3266, the highest since late February.

USD

The dollar index, which measures the greenback against a basket of major currencies, declined to 95.62, the lowest since early March. The positive news of a vaccine, and the agreement of the EU leaders on the recovery fund of 750 billion euros, pushed the demand for riskier currencies. The EURUSD hovered near $1.1440, the GBPUSD rose sharply to $1.2716, and the risk-sensitive AUDUSD soared to $0.7053.

Oil

Oil prices inched higher as vaccine news eases investors’ woes. An efficient vaccine would ensure that life can be back to normal, where the economic activity can return to pre-outbreak levels, which would lift oil demand levels. The West Texas Intermediate crude September delivery rose to $41.25, and Brent blend September delivery rallied to $43.70.

Major Economic Events

Disclaimer

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.