US stocks higher as gold and silver prices rise

By Simon Herrmann. Published at Jul 23, 2020, in Market Wrap

US stocks traded in the black overnight after a somewhat choppy session, despite over 1000 COVID-19 deaths recorded for the day and mixed earnings results.

As Washington discusses additional stimulus measures, investors remain upbeat about the prospect of high-risk assets despite the ongoing economic challenges and severe outbreak of the pandemic in the US and other parts of the world.

The latest figures showed more than 1,000 deaths in the United States from COVID-19 on Tuesday, bringing the total death toll to nearly 142,000. Experts warned that number will rise further due to a surge in new infections.

Gold prices staged another rally overnight adding about 1.4% to close at U$1,869.3 per ounce. The precious metal is now not far below 2011's record high of U$1,920.70.

Gold’s little brother silver is also in favour as prices soared over 8% on Wednesday.

In Australia, investors took profit on Wednesday after a 2%+ jump on Tuesday leaving the ASX in the red. The benchmark index ASX 200 dipped 81.2 points or 1.32% to close at 6,075.1 points. The All Ordinaries fell 76.2 points or 1.22% to 6,192.6 points.

ASX futures contracts have settled 4 points higher after a volatile night.

Europe and Asia lower, metals trade higher

In New York, major stock indices oscillated for most of the day but ended higher. This was despite the Nasdaq posting just a small gain, highlighted by a drop in Amazon shares.

The S&P 500 added 0.57% to finish at 3,276.02 points, while the Dow Jones Industrial Average rose 0.62% to 27,005.84. The Nasdaq Composite added 25.76 points, or 0.24%, to finish at 10,706.13.

According to Refinitiv data, 75 companies of the S&P 500 have posted quarterly earnings results so far, of which 77.3% have beaten consensus. The average consensus, however, forecast a drop of 40% or more.

Earlier in the session, Asia Pacific traded mostly lower with the exception of the Shanghai Composite which bucked the trend to finish marginally higher.

Australian stocks declined and so did markets in Japan and Hong Kong. The Hang Seng fell a hefty 2.25% and the Nikkei declined 0.58%. The Shanghai Composite managed to rise 0.37%, but gave up most gains in afternoon trade.

European markets fared similar as key indices drifted lower, dragging the STOXX Europe 600 index south. The pan-continental benchmark index ended the day 0.87% lower.

UK shares led the decline as the FTSE continued its underperformance of global equities. The FTSE 100 dipped 1% to 6,207.1 points. The German Dax performed only slightly better, down 0.51%.

It was once again, precious metals that stole the action as silver spot prices jumped a staggering 8% to approximately US$23.05 an ounce. Gold prices joined the rally pushing swiftly towards all-time highs, while most other metals including platinum or palladium rose as well.

Crude oil prices traded largely unchanged as the commodity consolidated overnight. While the oil and gas industry certainly does not have a bright future – as emerging and more efficient energy resources are being developed – investors value a barrel of crude oil at approximately U$41.85.

Overall the ASX looks poised for a mixed day with futures up a mere 4 points while commodity prices fared relatively well overnight.

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