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Gold tops $1800 to 9-year high

Chart of the Day: Silver (Daily candlesticks)
Source: GKFX / MT4 (July 8, 2020)

Good morning!
•    Gold reaches above $1800 per oz. for first time since 2011
•    British people get half-price restaurant dinners in August!
•    United States hits 3 million coronavirus cases
•    CHART: Silver hits 10-month resistance
•    DAY AHEAD: China CPI & PPI, Germany trade, US jobless claims
 

MARKETS

The price of gold finally broke $1800 per oz on Wednesday, closing at $1808 for its best finish since 2011. Silver tracked the gains in gold to make a 4-month high. Oil also nudged higher on signs of improving American gasoline demand before the summer driving season.

The dollar fell to a 2-week low with investors turning to precious metals as a preferred haven over the US currency. Benefitting from the USD weakness - GBP/USD reached a 3-week high and EUR/USD is again testing overhead resistance at 1.135.

Thursday begins with spirits high after another push higher in Chinese shares and a tech rally that ushered in gains on Wall Street. Both the Shanghai Composite and Shenzhen rose nearly 2%. Things in the rest of Asia and Europe were less clear cut amid concern over rising coronavirus cases.
 

GURU WISDOM


“Value will always work out in the course of time.” – Charles Dow
 

Gold: 9-year high


In a fresh burst of activity, spot gold prices (XAU/USD) broke above $1800 per ounce– catching up to futures which had reached the milestone already. Note: We highlighted the chance of a gold breakout above $1750 in our June 22 newsletter.
Weakness in the dollar, demand for a haven during the pandemic and simultaneous demand for hard assets as central banks print money have all contributed to a steady rise for gold since the shakeout in March. US cases of coronavirus topping 3 million helped spark the move higher on Wednesday.
 

COVID: 3 million

Airline shares fell on Wednesday after the United States topped 3 million virus cases. Investors have so far held their nerve because the global death rate from the coronavirus has been falling, meaning the rising cases could be more attributable to testing than the severity of the pandemic. 
 

GBP: Dinner on Sunak


The British pound gained over the dollar but was little changed versus the euro after an unusual but likely popular government policy was announced. The UK government is offering to subsidise a 50% discount at all restaurants on meals up to the value of £10. It was part of a broad set of government stimulus measures including a VAT cut on the hospitality industry and no stamp duty for homes under £500,000. 

The price of silver has surged two-thirds since its March 16 low and has run into resistance that has held since September last year.

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