Gold Shares Shine As The Yellow Metal Reaches Record High

28/07/2020 On Monday gold spot prices reached a near nine-year high at $1,945/oz, with gold futures touching $2000 as the dollar weakens, before pulling back a little in the early evening. Reasons for betting against the greenback are many: worsening Sino-US tensions, concerns the US is struggling to contain the pandemic, the uncertainty of a November presidential election, and growing expectations that the Federal Reserve will have to slash policy rates further. The JSE/All-share gained 1.22% to 56,326.2 points and the Top-40 1.28%. Gold miners leapt 8.73%, platinums 5.13%, resources 3.09%. The rand is 0.20% better against the dollar this morning at 16.4560, down almost 15% for the year. Yield on 10 year govt rand bonds fell 6.7 bps to 9.148%. We hoping for a positive start at the opening as IG futures indicate 149 points on the upside, with Tencent having advance almost 4% in Hong Kong this morning.

• Non-farm jobs rose 0.2% y/y in the previous quarter.
• South Africa President’s Spokesperson Takes Leave Amid Graft Allegations
• Old Mutual to Move Zimbabwe Listing as Currency War Escalates
• South African Airways Administrators, State in Guarantee Impasse
• AfDB Sees Southern Africa 2020 GDP Contracting As Much As 6.6%
• Steinhoff Class-Action Suit Dropped as VEB Supports Settlement
• Statistics South Africa is scheduled to publish quarterly employment statistics for the three months through March at 11:30am.
• (GLEN LN): Merafe Resources Sees 1H Loss Per Share On Lower Metal Prices
• (PRX NA): Prosus $1b 30Y +280
• EARNINGS: KUMBA INTERIM DIV/SHR 19.60 RAND, KUMBA 1H ADJ EPS 26.13 RAND VS. 31.26 RAND Y/Y, KUMBA’S KAPSTEVEL SOUTH PROJECT AT KOLOMELA APPROVED
• CORPORATE EVENTS:AGM: Brait (BRT SJ)

EU/UK
London’s FTSE100 stocks finished in the red 0.31% on Monday with miners – Polymetal, Fresnillo, Hochschild- helping to offset weakness in the travel sector after Ryanair warned over a second wave of coronavirus infections. The UK government imposed a 14-day quarantine period on travellers from Spain following a rash of outbreaks in the Mediterranean country centred on the Catalonia region. By the end of trading: the Stoxx 600 was lower by 0.31%, alongside CAC-40 slipping 03.4%, while the German Dax was flat at 12,838.66. The IG futures indicate a good start at the opening with the DAX at 30.8 points up and the FTSE 12 points.

US
US stocks opened higher on Monday as Wall Street prepared for a week full of corporate earnings amid continued stimulus talks in Washington. The Dow opened 131.10 points higher on Monday. Lawmakers on Capitol Hill were trying to forge ahead with another coronavirus stimulus package, with Treasury Secretary Steven Mnuchin having said on Sunday that Republicans had finalised a bill for roughly $1trn in Covid-19 relief funds. By the close: the Dow gained 0.43%, the S&P500 up 0.74%, with the tech heavy Nasdaq advancing 1.67%. Policymakers will gather for a meeting of the FOMC on Tuesday and Wednesday that will be dominated by the threat to recovery posed by the spread of Covid-19. Many Fed watchers are betting that a shift will not happen until at least the September meeting of the FOMC. Both the Dow futures are unchanged this morning 2 points and 1.75 points respectively, while the Nasdaq are 22 points in the green.

Here are some key events coming up:
• Earnings include Apple, Amazon.com, Alphabet, Chevron, Rio Tinto, L’Oreal, Caterpillar, Samsung, Barclays and Credit Suisse.
• The Federal Open Market Committee holds its policy meeting on Tuesday, with an announcement due on Wednesday.
• U.S. second-quarter GDP is expected on Thursday.
• China PMI data comes Friday.

ASIA
Markets in Asia mixed on Tuesday after U.S. stocks resumed their upward march on Wall Street, while the price of gold pushed to nearly $1,970 per ounce. Tokyo’s Nikkei 225 index on the backfoot 0.14% and the Hang Seng in Hong Kong adding 0.24%. The Shanghai Composite index advanced 0.26% and the Aussie’s ASX/200 in Sydney slipping 0.28%.

COMMODITIES
Oil prices edged lower on Tuesday morning, Brent crude dipping 0.14% at $43.15 alongside WTI in the 0.41% at $41.44. Still, Brent is on track for a fourth consecutive monthly gain in July and WTI is set to rise for a third month as unprecedented supply cuts from OPEC and its allies including Russia propped up prices. Output has also fallen in the US.