Friday’s dominant tone will once again be of greater risk appetite
After a Thursday dominated by the resurgence of risk avoidance, following Federal Reserve Chairman Jerome Powell’s highlighting of the long path to recovery, it appears that Friday’s dominant tone will once again be of greater risk appetite. This dynamic is illustrated by the euro and its gains of more than 0.30% versus the dollar during early Friday trading. Despite the words of caution from the Fed, economic numbers that point at the greatest recession since the second world war and, worryingly, a resurgence of coronavirus cases in regions where the lockdown has been lifted, investors still see the glass half-full and continue to offer support to riskier assets..
Ricardo Evangelista – Senior Analyst, ActivTrades
Gold’s spot price was stopped by the resistance area placed at $1,745, despite the crash of US stocks seen yesterday. As at the start of the crisis in March, the turmoil in stock markets did not generate any immediate rally in gold, as such a violent correction also meant some investors needed quick liquidity for margin calls, and had to close their (profitable) positions on gold in order to keep alive some other less fortunate trades. The main trend remains supportive for bullion, which is recovering strength this morning, in a favourable environment for other gains.
Carlo Alberto De Casa – Chief analyst, ActivTrades
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