LONDON (Reuters) – Gold prices rose to their highest level in nearly eight years on Wednesday, as global stocks cooled as signs of a rally in coronavirus cases kept investors on edge.
FILE PHOTO: Gold bars and granules are displayed at the Austrian Oegussa silver-gold separation plant in Vienna on June 2, 2009. REUTERS / Leonhard Foeger
Concern about sustained weakness in the pace of economic recovery was information showing that several US states. USA They have seen record infections and the death toll in Latin America exceeding 100,000, according to a Reuters count.
The European Union is even prepared to ban American travelers due to the increase in cases in the country, placing it in the same category as Brazil and Russia, the New York Times reported.
All of that and the weak dollar, coupled with endless cheap liquidity from central banks, helped detect a 0.2% gold gain at $ 1,770.92 per ounce after hitting $ 1,773, its highest level since early October 2012. of Asian trade.
Global stocks were 0.3% lower and have been moving laterally in recent weeks after rising more than 40% from March lows in hopes that the worst of the pandemic has passed.
European shares were 1% lower.
There was some good news in the markets, with emerging market stocks rising to a 3-1 / 2 month high. They were up 0.5% on the day, while MSCI’s broader index of Asia-Pacific stocks outside Japan added 0.5% to hit its highest level since pandemic blockades first attacked markets at early March.
E-Mini futures for the S&P 500 reversed early losses to gain 0.1%.
“Global equity market futures are struggling for profit today, probably for no other reason than with the rise in daily Covid-19 cases on the remaining front-page news in the United States, headlines are proving to be a heavy burden to bear this morning, “said Stephen Innes, chief global market strategist at AxiCorp. “The depression in global growth is really behind us, but the recovery path in H2 remains uncertain.”
In a context of concern about a weaker US dollar and that a jump in infections will lead to more stimulus measures, gold should remain on a reasonably constructive path, he said.
The euro, headed for its best month against the dollar since October, rose to $ 1.1303.
The dollar was just a negative touch against a basket of currencies, just above the one-week low reached on Tuesday.
“The dollar and risk sentiment are likely to continue to be negatively correlated across the board, unless the US shows clear and lasting leadership in the global economic recovery, which is difficult to square with the gloomy US news. COVID, “said Ray Attrill, head of FX strategy at COGER.
The New Zealand dollar relaxed after the country’s central bank said it may have to do even more to stimulate the economy, including further cutting rates, expanding bond purchases or even buying foreign assets.
Yields on eurozone bonds remained broadly stable, with a focus on Austria, which is expected to sell a new 100-year bond that will raise 2 billion euros, one of the oldest bond sales since the crisis. of the coronavirus.
Germany will also visit the primary market with the first reopening of a 15-year bond that is expected to raise € 2.5 billion.
Oil futures were mixed as concerns about oversupply in the market, fueled by a surge in US crude inventories. In the US, they were offset by a drop in gasoline stocks.
Brent crude rose 0.3% to $ 42.75 a barrel, while US West Texas Intermediate (WTI) crude futures fell 1 cents to $ 40.34 a barrel, reducing some previous losses.
Additional reporting by Wayne Cole in Sydney; Editing by Raissa Kasolowsky