Global markets surge, gold price nears US$1800 per ounce
After spending the best part of Monday in positive territory, the S&P/ASX 200 index (XJO) plunged 60 points in the last two hours of trading to close at 6015 points, down 43 points or 0.7%.
The big four banks paved the way for the index to be up as much as 20 points around 2 PM, but after hitting that high it plunged from 6078 points to its lowest level for the day at 6014 points.
The ASX SPI200 Futures index is up 31 points to 6019 points this morning, arguably reflecting the strength in overseas markets last night.
The other positive factor that may work in our favour today is commodity price strength across gold, copper and nickel with the latter two experiencing the strongest one-day gains for some time.
The Australian market failed to respond to an extremely positive day in the broader Asia-Pacific region on Monday which saw the Shanghai Composite soar 5.7% or 180 points to close at 3332 points.
China appears to be taking a glass half full approach with improving economic conditions reflected in recent data offsetting continued negative sentiment related to the impact of coronavirus.
Positive sentiment also prevailed in Hong Kong as the Hang Seng spiked nearly 1000 points or 3.8% to close at 26,339 points, its best close since early March.
The Nikkei 225 also performed strongly, gaining 408 points to close at 22,714 points.
Positive news for the residential construction sector underpinned a strong rally in the UK with the FTSE 100 gaining 128 points or 2.1% to close at 6286 points.
Mainland European markets also made good gains with the DAX up 1.6% to close at 12,733 points and the CAC 40 up 1.5% to 5081 points.
Gold came within a whisker of broaching the US$1800 per ounce mark before closing at US$1794 per ounce.
The Brent Crude Oil Continuous Contract is hovering just above US$43 per barrel.
The iron ore price edged up a little higher to US$101 per tonne.
Copper was the good news story on the base metals front as it surged from US$2.71 per pound to US$2.78 per pound, leaving it just shy of the US$2.85 per pound mark which would be close to a two-year high.
Strong manufacturing data out of China also had a positive impact on the nickel price as it gained nearly 4% to close at US$6.02 per pound, a level it hasn’t traded at since January.
Zinc also fired up, increasing 1.5% to US$0.92 per pound.
Lead was up slightly but failed to attract the same support that other base metals received.
The Australian dollar strengthened overnight, pushing up towards US$0.70.
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