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GLOBAL MARKETS-Gold strides further above $2,000, dollar weakens

Published 08/05/2020, 11:23 PM
Updated 08/05/2020, 11:30 PM
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* Gold pushes further past $2,000 an ounce mark
* Wall Street, European shares rise
* Euro gains on upbeat data
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Herbert Lash
NEW YORK, Aug 5 (Reuters) - Gold pushed further past $2,000
on Wednesday in the face of a weak dollar and expectations of
more stimulus measures for the pandemic-ravaged global economy,
while stocks in Europe and on Wall Street rallied on encouraging
corporate earnings.
Oil prices rose to their highest since early March on a big
drop in U.S. crude inventories and on the weak dollar, which was
pushed lower by data showing euro zone business activity
returned to modest growth in July. The final Composite Purchasing Managers' Index (PMI) from
IHS Markit climbed to 54.9 from June's 48.5, better than a 54.8
flash estimate, indicating significant improvement consistent
with the continued easing of lockdowns, analysts said.
Gold set a new record after scaling $2,000 for the first
time on Tuesday, as investors seek a store of value on fears
government stimulus in response to the pandemic will trigger
inflation, devalue other assets and keep bond yields low.
Spot gold prices XAU= rose 1.53% to $2,049.00 an ounce,
after earlier reaching a record $2,055.1006.
The dollar standard of the past 50 years is under open
question because of the enormous amount of increased money
supply by the Federal Reserve, said Ryan Giannotto, director of
research at alternative ETF provider GraniteShares.
"The dollar is collapsing under the weight of $3 trillion in
printed dollars, this all comes out in the wash with higher gold
prices," Giannotto said.
Gold has gained nearly 35% so far in 2020 and is one of the
year's best-performing assets.

A surprise quarterly profit from Walt Disney Co DIS.N and
a slate of upbeat results from healthcare companies lifted
sentiment on Wall Street, while European shares rose on a slate
of positive results. Disney shares jumped 10.4%.
In Europe, the broad FTSEurofirst 300 index .FTEU3 added
0.38% at 1,417.72.
The Dow Jones Industrial Average .DJI rose 1.25%, the S&P
500 .SPX gained 0.72% and the Nasdaq Composite .IXIC added
0.45%. MSCI's benchmark for global equity markets .MIWD00000PUS
rose 0.93% to 564.47. Emerging markets stocks .MSCIEF rose
1.26%.
The dollar extended losses after U.S. private payrolls
growth slowed sharply in July, pointing to a loss of momentum in
the labor market and overall economic recovery as new COVID-19
infections spread across the United States. The ADP National Employment Report showed private payrolls
increased by 167,000, far less than an increase of 1.5 million
economists polled by Reuters had forecast. U.S. Treasury yields
rose after the report, halting their recent trend lower.
"Clearly, we have seen risk appetite rebound on global
markets and sort of a return of the theme of a U.S.
underperformance relative to world counterparts," said Karl
Schamotta, chief market strategist at Cambridge Global Payments
in Toronto.
The dollar index =USD fell 0.557%, with the euro EUR= up
0.79% to $1.1893.
The Japanese yen JPY= strengthened 0.21% versus the
greenback at 105.49 per dollar.
The U.S. government bond yield curve steepened as the
prospect of increased supply in longer-dated debt dampened
prices following the Treasury Department's announcement that it
would borrow more this quarter than previously anticipated.
The 10-year U.S. Treasury US10YT=RR note rose 4 basis
points to yield 0.5526%.
Oil prices rose. Brent crude futures LCOc1 rose $1.54 to
$45.97 a barrel. U.S. crude futures CLc1 gained $1.55, to
$43.25 a barrel.



<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Emerging markets http://tmsnrt.rs/2ihRugV
Coronavirus and financial markets https://tmsnrt.rs/33sUXR5
GRAPHIC-World FX rates http://tmsnrt.rs/2egbfVh
GRAPHIC-MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
GRAPHIC-Global assets in 2020 http://tmsnrt.rs/2jvdmXl
Gold versus U.S. yields and dollar https://tmsnrt.rs/31fEMns
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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