Market Analysis

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.

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

 

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.

Pierre Veyret– Technical analyst, ActivTrades

 

The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.