Out of the blue and despite the mounting COVID-19 infection toll in the US and around the world major commodities had their best day of 2020 so far on Wednesday.
Gold, silver, iron ore, and oil hit a series of highs as traders ignored the rising toll of coronavirus infections which have reached 12 million globally with more than 3 million in the US, meaning it is affecting around one in every 100 Americans.
California, Hawaii, Idaho, Missouri, Montana, Oklahoma, and Texas broke their previous daily record highs for new infections.
In contrast, Wall Street rose fitfully thanks to continuing strength in tech stocks, while the rest of the market was tepid.
Gold futures climbed for a fourth straight session on Wednesday to score another settlement at their highest since September 2011, supported by the prospect of a lengthy period of government and central bank stimulus to support economies harmed by the COVID-19 pandemic.
August gold rose $US10.70, or 0.6%, to settle at $US1,820.60 an ounce.
Prices based on the most-active contract settled at their highest since September 14, 2011. Prices had gained 0.9% Tuesday, to also mark their highest in nearly nine years.
Meanwhile, September silver settled 46 cents, or 2.5%, higher at $US19.161 an ounce, after it gained 0.6% in the previous session. The settlement was the highest for a most-active contract since September last year.
Comex September copper added 1% to $US2.824 a pound. That’s the highest in six months.
Oil futures rose on Wednesday, lifting prices to their highest finish since March, as a rise in US crude imports and a weekly fall in petrol supplies suggested an improvement in demand, even as domestic crude inventories posted a surprise climb and the number of COVID-19 cases rose.
The Energy Information Administration reported Wednesday that US crude stocks rose 5.7 million barrels for the week ended July 3. That followed a fall of 7.2 million barrels the week before.
That rise was due to a jump in oil imports. The EIA said total net petroleum imports almost doubled to 5.01 million barrels a day, up from 2.88 million a week earlier.
Imports of commercial crude oil totaled 7.39 million barrels a day, up from 5.97 million.
West Texas Intermediate crude for August climbed by 28 cents, or 0.7%, to settle at $US40.90 a barrel in New York, after ending virtually unchanged on Tuesday.
In Europe Brent oil for September added on 21 cents, or 0.5%, to settle at $US43.29 a barrel, following a decline of less than 0.1% in the previous session.
Meanwhile, iron ore prices hit their highest levels in a year on Wednesday.
Prices strengthened amid the recovery in Chinese domestic demand for rebar (used as reinforcing in concrete) and the price for 62% Fe fines rose more than 3% to $US106.50, up $US3.49 a tonne.
That was the highest iron ore prices have been since last July when they peaked at $US125 a tonne for 62% Fe fines in the wake of the January 25 (2019) mine dam wall disaster in Brazil which slashed global supplies by around 90 million tonnes.
Global prices are up around $US13 a tonne, or 14% since the end of 2019.
The ASX will start with a solid gain this morning after the overnight futures market rose by around 48 points (at 7 am).
That rise will go some way to offsetting yesterday’s nasty 93 point, 1.5% slump off the back of the deepening of the COVID-19 crisis in Melbourne.
A reasonable session on Wall Street saw the Dow rose 177.10 points, or 0.7%, to end at 26,067.28, after trading up to 26,109.49 at the start of the session. The S&P 500 climbed 24.62 points, or 0.8%, to finish at 3,169.94.
The Nasdaq added 148.61 points, or 1.4%, closing at a fresh 10,492.50 record, it’s 25th of the year.
Year-to-date the Dow is down 8.66%, the S&P 500 down 1.88% but the Nasdaq Composite is up 16.94%.
The MSCI world equity index, a measure of sharemarkets in 49 nations, rose 0.39%, and its emerging markets index jumped 1.72% as investors continue to pour into Chinese equities.
In China, shares rose for a 7th session in a row with the blue-chip CSI 300 index up 1.6% to its highest close since June 2015. Hong Kong’s Hang Seng Index rose 0.6%.
In Europe, the Stoxx 600 index fell 0.7% and the Footsie in London dropped 0.6%.