Gold shines as the dollar falls, yields; Epidemic cost concerns drag on stocks

SYDNEY (Reuters) – Gold rose to a new high on Wednesday as a weaker dollar and falling bond yields ignited its safe-haven appeal, while stocks were mostly lower as investors raised the cost of a coronovirus epidemic balloon Reduced.

FILE PHOTO: On August 14, 2019, there are gold bars in the safe deposit box room of the Pro Aurum Gold House in Munich, Germany. REUTERS / Michael Dalder / File Photo

Equity-like risk assets have risen in recent months on large-scale policy stimulus from central banks and governments, but gold has also risen to a sign of uncertainty around the long-term effects of the global health crisis.

Gold Gold XAU = bounced on Wednesday to a record high of $ 2,030.72 an ounce as bond yields receded. This year, prices have gone up by about 33%. [GOL/]

Even more expenses are being relied upon in the United States by White House negotiators to work out White House negotiators to arrive at a deal by the end of the week.

On the comments of the President of the Federal Reserve Bank of San Francisco, the market also said the US economy would require more support than initially thought, sending long-term treasury yields downward in a downward spiral.

“Failure to agree to a second round of stimulus will hit the US economy hard when high-frequency data suggests it is losing some momentum,” said Tapas Strickland, analyst at Melbourne-based National Australia Bank.

The United States has reported more than 4.7 million coronavirus cases and caused more than 157,000 deaths, the highest globally.

On Wednesday, MSCI’s largest index of Asia Pacific shares outside Japan .MIAPJ0000PUS was flat near the 6-1 / 2 month peak at 560.36 points.

Japan’s Nikkei slipped 0.86% while Australia’s benchmark index slipped 1%. Chinese shares fell 0.8% with the blue-chip CSI300 index .CSI300, although it was not far from the recent five-year peak.

Kospi .KSII of South Korea stepped up the trend to reach its highest level since October 2018.

E-mini futures were down 0.1% for the S&P 500 ESc1.

On Wall Street, Dodi .DJI rose 0.6%, the S&P 500 .SPX 0.4% and the Nasdaq Composite .IXIC rose 0.4%. [.N]

The “significantly increased prospects” of monetary policy stimulus from the US Federal Reserve is a key driver of equity, although the rally has been refined by a drawn valuation, Mizo analysts wrote in a note.

He said more central bank support is also pulling America’s treasury yields lower, led by the long end of the curve and helping “spark the fire-up gold”.


The dollar was under pressure USD = safe-haven Japanese yen with yen = rising to 105.66 as the dim view of the US recovery of the bond market sent real yields to negative territory and modest yields to record lows. [US/]

The risk-sensitive Australian dollar AUD = D3 has risen more than 2% so far this year, while the euro has climbed over 5% against EUR = greenback.

The Australian dollar was last up 0.3% at 0.7184, while the common currency was moving toward a two-year high at $ 1.1812, hardening by the perception that the US rebound was lagging in Europe. [FRX]

FILE PHOTO: Security Guard Bund walks behind Financial Bull Statue wearing face mask, REUTER / Aly Song / File photo, after the outbreak of coronavirus disease (COVID-19) on March 18, 2020, on The Bund, Shanghai.

According to sources, investors are now awaiting an August 15 video conference, where senior US and Chinese officials have reviewed a business deal and possible air mutual complaints.

China’s US envoy said on Tuesday that Beijing does not want tensions to escalate.

Among commodities, oil prices were weaker with Brent crude LCOc1 at 8 cents at $ 44.35 a barrel. US crude CLc1 was down 11 cents at $ 41.59. [O/R]

Additional reporting by Chris Prentice in Washington; Editing by Stephen Coats and Himani Sarkar

Our standard:Thomson Reuters Trust Theory.