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Gold breaks out as virus fears rise - CMC Markets

Contributor:
Fuseworks Media
Fuseworks Media

Gold prices broke to new seven-year highs as new cases of coronavirus infections outside China raised concerns. Corporate earnings announcements around the globe highlighted second order effects of the virus, with airlines and shipping companies reporting damage to their bottom lines. Bonds rallied, shares sank and the US dollar climbed yet again as investor sentiment declined.

The US dollar index stands at 99.9. A break up through the 100 level could spur technical buying, adding to the pressure on other major currencies. The Australian dollar is at eleven-year lows, and threatening to drop through US 66 cents. After a slip overnight cryptocurrency markets are well bid this morning, supporting the argument that the alternative currencies are taking on haven status.

Crude oil markets defied the risk-off flavour of overnight trading. US crude exports accounted for more than 25% of production last week, depleting stockpiles and extending the recent rally.

Australian investors get a breather today as local company reporting approaches the three-quarters mark. Orocobre, Link Market Services, Mayne Pharma and Inghams are the only major reports. With one week to go both sales and profits are running around 1% below forecasts, calling into question the rationale behind yesterday’s all-time high for the Australia 200 index.

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