The yellow metal surpassed its 2011 peak of $1921 overnight as the dollar extended its decline. The euro, pound, yen and commodity dollars all pushed higher, causing the Dollar Index to break below its March low. Stocks were off their lows but have remained under a bit of pressure, further boosting the appeal of safe-haven assets. The appeal of haven assets has also been boosted amid escalating US-China tensions and fresh outbreaks of coronavirus.
Covid-19 second wave concerns on the rise
Travellers returning to the UK from Spain will now have to quarantine for 14 days, where new cases have been rising sharply, especially in Catalonia with contagion among young people being a particular worry. China has reported the most Covid-19 cases since mid-March with the virus flaring up in the west and northeast. In Hong Kong, all dine-in restaurants will shut, and masks would be required outdoors from Wednesday.
Travel stocks lag but precious metal miners shine
So, this morning, UK travel stocks found themselves in the bottom end of the FTSE while precious metals miners were the leaders. The markets stopped going higher last week as concerns over a second wave of infections added to worries over the stalling economic recovery in the US and the increasingly deteriorating US-China relationship.
Looking ahead
The economic calendar is quiet today, potentially making for a calmer session in the afternoon. Looking ahead, there will be a handful of key economic numbers to look forward to, including growth figures starting from Wednesday from Germany, the US and Eurozone, as well as Chinese manufacturing PMI on Friday. The FOMC will be making a rate decision on Wednesday. But it will likely be the big tech earnings which will garner most of the attention, with Apple, Google and Amazon all reporting on Thursday. Our week ahead preview is HERE.
How high can gold go?
