Gold is crashing
The S&P 500 neared its Feb. 19 peak and levels last seen before the onset of the crisis, when investors started dumping shares in anticipation of what proved to be the biggest U.S. economic slump since the Great Depression.
The dollar slid from one-week highs and the euro topped $1.18 as investors flocked to currencies that benefit from an improving global market outlook, while gold prices dived as expectations of a U.S. stimulus deal boosted risk appetite.Article content continued U.S. producer prices increased by the most in more than 1-1/2 years in July, and the Labor Department’s producer price index for final demand rose 0.6 per cent, driven by a surge in portfolio management fees and rising costs for gasoline. The market believes the economy will grow and that the pandemic will be overcome, said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “Short term, we’re going to get stimulus,” Ghriskey said. “Longer term is that we’re going to get through this virus. We’re going to have a vaccine eventually.” MSCI’s benchmark for global equity markets rose 0.73 per cent to 568.17, off less than 3 per cent from its record, while Europe’s broad FTSEurofirst 300 index closed up 1.64 per cent at 1,436.83. On Wall Street, the Dow Jones Industrial Average rose 0.94 per cent, the S&P 500 gained 0.35 per cent and the Nasdaq Composite dropped 0.16 per cent. The S&P was less than half a percentage point from a fresh record. Russian President Vladimir Putin’s announcement that Russia had become the first country to grant regulatory approval to a COVID-19 vaccine after less than two months of human testing aided sentiment, some analysts said. “I’m not sure people put a lot of credence in the Russian vaccine, which hasn’t been tested,” Ghriskey said. “But who knows? Treatments are getting better and the economy is slowly improving.”tap here to see other videos from our teamYields on the benchmark 10-year U.S. Treasury note jumped six basis points to 0.638 per cent, a sign investors anticipate growth. Yields dipped as low as 0.504 per cent last Thursday, the lowest since March.Article content continued Sterling and commodity-linked currencies such as the Australian and Canadian dollars, as well as the Norwegian crown, gained against a broadly weakening dollar. The euro rose 0.23 per cent, to US$1.1763. The dollar index fell 0.129 per cent, and the Japanese yen weakened 0.56 per cent versus the greenback at 106.54 per dollar. Gold sank as much as 4.3 per cent, facing its worst one-day rout in seven years. Other precious metals also took a beating, with silver plunging as much as 8 per cent – its biggest daily decline since mid-March.
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