Gold holds above $1,800 level as virus casts long shadow

09/07/2020 Local markets made good gains with the JSE All Share closing up 1.1% at 55 870, the ZAR had a good day against the US$ gaining 1.2% and remains firm at 16.93/$. Platinum miners led the gains with the index now having erased all of its 2020 losses, while the gold price remains at an eight year high and above the psychologically important $1,800/oz as the resurgence in Covid-19 cases continues to drive skittish markets. After a good session in the US, Dow + 177, S&P + 25 and Nasdaq + 148 (at yet another record high), Asia trades higher after Chinese June inflation numbers and Tencent hits another all-time HIGH. IG Futures have the local market up 245 points.
Factory output probably contracted by 43.3% in April from year earlier, according to the median estimate of six economists surveyed by Bloomberg. Statistics South Africa is scheduled to publish the data at 1pm.
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The pan-European Stoxx 600 closed down by 0.7%, with autos shedding 2% to lead losses as almost all sectors and major bourses slid into negative territory. On the major bourses the FTSE was down 0.55%, DAX – 0.97% and the CAC -1.24%, U.K. Finance Minister Rishi Sunak announced a back-to-work bonus scheme for businesses bringing furloughed employees back to work, and a 50% restaurant discount for all citizens through the month of August. In corporate news, Deutsche Bank has been hit with a $150 million fine by the New York financial regulator over its relationship with notorious sex offender Jeffrey Epstein.
The Nasdaq rose 1.44% to yet another record high at 10 492 50, pushed by a 2.3% rally in Apple, a 2.7% rise in Amazon and a 3.49% climb in Nvidia. The S&P 500 notched a more modest 0.78% gain while Microsoft and Goldman Sachs helped push the Dow up 177 points, or 0.68%. Since last week’s close, the S&P 500, Dow and Nasdaq Composite are up 1.28%, 0.93% and 2.79%, respectively. The Nasdaq is up 29.68% over the last three months.
Weekly jobless claims will be released later today, another 1.39 million workers are expected to have filed first-time claims for state unemployment benefits during the week ended July 4. That would mark a deceleration from the prior week of 1.427 million.

Asian markets are mostly higher following the release of China’s June inflation data. The producer price index slipped 3% year-on-year, according to data from China’s National Bureau of Statistics. That compared against expectations of a 3.2% decline in a Reuters poll of analysts. Meanwhile, the consumer price index rose 2.5% as compared with a year ago, in line with expectations from a Reuters poll. The Shanghai composite gained 1.03% by the afternoon while the Shenzhen component surged 2.23%. Hong Kong’s Hang Seng index added 0.47%. as Tencent trades at an all- time high. Overall, the MSCI Asia ex-Japan index gained 0.83%.
Gold held steady above the key $1,800/oz level this morning at $1812 as worries over mounting COVID-19 cases offset hopes of a swift global economic recovery. Platinum up 0.52% at $854, Palladium + 0.92% at $ 1943.
Oil prices are slightly softer after yesterday’s rise, after data showed U.S. gasoline stockpiles fell by 4.8 million barrels last week, much more than analysts had expected, as demand climbed to 8.8 million barrels per day, highest since March 20. Brent $ 43.28, WTI $40.84.