News

Gold Extends Upside Rally on Growing Safe-Haven Demand

Metals

Gold prices edged higher, adding to prior gains and scoring a fresh 8-year high as the rise in coronavirus cases sparked woes over the economic recovery. Market participants are worried that another serious outbreak could disrupt the economic activity again, and weigh on markets. Moreover, the yellow metal is finding support from the prospects of further monetary and fiscal stimulus. During their testimony before the House Financial Services Committee, Fed's Powell and Treasury Secretary Steven Mnuchin pledged to do more to support the economy. The price of a gold ounce shot higher to $1789, the price of a silver ounce rose to a one-month high of $18.33, and palladium futures rallied to $1977.

Equities

Major US stock-index futures finished the second quarter of 2020 on a very solid note, posting their largest gains in decades. Even though coronavirus cases are rising again in the United States, and the White House Advisor Dr. Anthony Fauci warned of a significant outbreak where new infections could surpass 100,000 per day, the stock market managed to rally supported by the Federal Reserve and White House willingness to do whatever it takes to support the economy. The Dow Jones Industrial Average futures rose to 25771, the S&P500 futures advanced to 3100, and Nasdaq futures rallied to 10170.

Dollar

The dollar index, which measures the greenback against a basket of major currencies, held steady near 97.40 awaiting fresh fundamental drivers. Market participants are looking forward to the ADP Nonfarm Employment Change and the Manufacturing PMI to grasp hints over the economic recovery, and the minutes of the last monetary policy meeting. The EURUSD is hovering around $1.1230, and the GBPUSD edged higher to $1.2390.

Oil

Oil prices raced higher after a private survey revealed a sharp decline in inventories. The American Petroleum Institute reported a drop of 8.156 million barrels in US crude oil stock, suggesting improving demand. Market participants are waiting for the official figures by the US Energy Information later today. The West Texas Intermediate Crude August delivery rose to $40.35, and Brent Blend September delivery advanced to $42.35.

Major Economic Events

GMT Country Event Expectation Previous

12:15

US

 ADP Nonfarm Employment Change (Jun)

3.000

-2.760

14:00

US

 ISM Manufacturing PMI (Jun)

49.4

43.1

14:30

US

 Crude Oil Inventories

-

1.442

18:00

US

 FOMC Meeting Minutes 

-

-

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