Gold Holds Gains While US Equities Push Higher

By Glenn Dyer | More Articles by Glenn Dyer

Gold prices ended sharply higher on Wednesday, as its current record run continued for the fourth session in a row.

Oil also rose, as did silver, copper, and iron ore as the US dollar eased. The Aussie dollar topped 72 US cents and was just under that level at 7 am Sydney time.

The Dow jumped 373.05 points, or 1.4%, to end at 27,201.52, while the S&P 500 gained 21.26 points, 0.6%, to end at 3,327.77. The Nasdaq added 57.23 points, 0.5%, closing at 10,998.40, after briefly setting an intraday 11,002.11 record high.

Wednesday’s gains were larger than Tuesday’s when the Dow picked up 164.07 points or 0.6%; the S&P 500 index rose 11.90 points or 0.4% and the Nasdaq finished up 38.37 points or 0.4%.

The ASX should start with a solid 27 point gain this morning, according to overnight futures trading.

Gold stocks should again do well as they did on Wednesday, while oil shares will also enjoy a solid opening after the highest closes since before COVID for the two main marker crudes – West Texas Intermediate and Brent.

Comex December gold rose $US34.70, or 1.4%, to settle at $US2,049.30 an ounce, after a similar surge on Tuesday.

Gold prices have gained already about 3.3% so far this week.

It continued rising in after-hours trading and was around $US2,053 an ounce in early Asian dealings.

The yellow metal has soared over 34% in 2020, topping the year-to-date 22.5% rally in the Nasdaq Composite, which is made up of all those highflying technology stocks that has led to the overall equity market rally.

Gains for gold Wednesday helped it notch its seventh record close in eight sessions, representing the most record closes over such a span since April of 2011, according to Marketwatch.com.

Comex September silver also rose sharply, adding, 86.2 cents, or 3.3%, at $US26.890 an ounce after jumping 6.6% a day earlier.

And Comex September copper rose 2.25 cents, or 0.8%, to settle at $US2.917 a pound, retracing Tuesday’s loss.

Meanwhile, iron ore prices also rose with the index price of 62% Fe fines delivered to northern China adding22 cents to finish at $US118.10, another year high.

Oil futures posted the highest close in five months but ended off session highs after data confirmed a large drop in crude inventories while also showing an unexpected rise in gasoline stocks that undercut notions of a pickup in demand.

In New York, West Texas Intermediate crude for September delivery ended up 49 cents, or 1.2% to settle at $US42.19 a barrel, after rising as high as $US43.52.

In Europe, the global benchmark, October Brent crude closed at $US45.17 a barrel, up 74 cents, or 1.7%.

Wednesday’s settlements were the highest since March 6 for both benchmarks which are before the impact of the pandemic was really felt.

The Energy Information Administration said US crude stocks fell by 7.4 million barrels in the week ended July 31, but petrol inventories rose 419,000 barrels and distillate (diesel) supplies increased by 1.6 million barrels- pointing to weaker than expected demand for both products.

Analysts say the US Gulf Coast accounted for the entire drop, where inventories dropped by 7.4 million barrels thanks to low waterborne imports and continuing strength in exports.”

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →