Gold hits new high; equities struggle on virus fears

Gold chalked up another record peak on Tuesday, July 28, while equity markets struggled with mounting coronavirus fears amid a political fight in Washington over another fiscal package to support the battered United States economy.

With fresh infection spikes in Asia and Europe – on top of the already high number of new cases in the US – and new containment measures, the global economic outlook remains clouded.

Virus uncertainty combined with China-US tensions has sent gold soaring nearly 30% this year – and on Tuesday it struck another record pinnacle at $1,981.27 per ounce in Asian trade before pulling back somewhat.

Some observers still predict $2,000 could be broken as early as this week.

The euro pulled back from its recent nearly two-year peak ahead of the Federal Reserve meeting on Wednesday, July 29, part of a jam-packed US economic calendar playing out over the next couple of days.

Investors are also looking ahead to the first estimate of 2nd quarter US gross domestic product and a congressional hearing with the chief executive officers of Amazon, Apple, Google, and Facebook.

Wall Street stocks finished decisively lower as legislators in Washington appeared far apart on another round of fiscal support for the coronavirus-battered economy.

Republican congressional leaders on Monday, July 27, released details of their long-awaited spending plan to boost the economy. 

However, the proposal contains many differences from the one backed by congressional Democrats.

Supplemental unemployment benefits are scheduled to expire this week, putting pressure on Washington to come up with a replacement for funds that have helped blunt the economic carnage from the shutdowns so far.

“The spread between the Democratic and Republican proposals hasn’t closed any,” said Art Hogan, chief market strategist at National Securities.

“The market is frustrated at how we have to watch Washington grind things out.”

Key figures around 9:10 pm GMT

• Gold: UP 0.9% at $1,959.77 per ounce
• New York – Dow: DOWN 0.8% at 26,379.28 (close)
• New York – S&P 500: DOWN 0.7% at 3,218.44 (close)
• New York – Nasdaq: DOWN 1.3% at 10,402.09 (close)
• London – FTSE 100: UP 0.4% at 6,129.26 (close) 
• Frankfurt – DAX 30: FLAT at 12,835.28 (close)
• Paris – CAC 40: DOWN 0.2% at 4,928.94 (close)
• EURO STOXX 50: FLAT at 3,303.56 (close)
• Tokyo – Nikkei 225: DOWN 0.3% at 22,657.38 (close)
• Hong Kong – Hang Seng: UP 0.7% at 24,772.76 (close)
• Shanghai – Composite: UP 0.7% at 3,227.96 (close)
• Euro/dollar: DOWN at $1.1721 from $1.1752 at 9 pm GMT
• Dollar/yen: DOWN at 105.09 yen from 105.37 yen 
• Pound/dollar: UP at $1.2932 from $1.2882 
• Euro/pound: DOWN at 90.61 pence from 91.23 
• West Texas Intermediate: DOWN 1.3% at $41.04 per barrel 
• Brent North Sea crude: DOWN 0.4% at $43.22 per barrel

– Rappler.com