Gold added to its recent gains, rallying past its $2,000 milestone, as crude oil and global stocks pushed higher on upbeat data from Europe counterbalanced a less optimistic report on America’s labour market.
Oil prices advanced for a fourth day, with Brent crude adding nearly 4 per cent to $46.06 a barrel.
That put the price of the global benchmark back to March levels, a time when Saudi Arabia initiated a price war with Russia forcing prices to drop to as low as $15.98 on April 28, the darkest days of the global pandemic lockdown.
But Brent crude is still 31 per cent lower this year.
Equities have maintained their ascent even in a year when gold has added a third of its value, a counterintuitive scenario that highlights worries among some that the trillions of dollars in stimulus deployed by governments and central banks could at once stoke an economic rebound and a bout of high inflation.
US stocks followed Europe higher on Wednesday with the S&P 500 gaining 0.5 per cent at Wall Street’s open, even after a report revealed that the private sector created fewer jobs than expected last month.
Non-farm private employers added 167,000 jobs in July, said payroll processor ADP, indicating the recovery in the labour market has slowed as coronavirus cases have risen in the south and west of the US.
June’s figures were revised upwards. Europe’s shares pulled back slightly in early afternoon Wednesday trade: the region’s Stoxx 600 trimmed an above 1 per cent gain to 0.4 per cent.
Frankfurt’s Dax did the same while London’s FTSE 100 climbed 0.8 per cent. A batch of positive data helped buoy market sentiment in the region.
Eurozone retail sales returned to pre-crisis levels while Spanish and Italian services sector activity picked up as government lockdowns eased in July and people returned to bars and restaurants.
Resurgent coronavirus cases and localised lockdowns, however, have kept markets and economies on tenterhooks.
Many analysts see haven assets, such as gold and sovereign debt, set to maintain the momentum as the global economic outlook sours.
Gold has risen for 13 days in the past 14. It struck a peak of $2,039.3 a troy ounce on Wednesday, and was recently up 1.6 per cent in European trading. Silver followed in gold’s slipstream with a fourth day of records, rising 3.8 per cent on Wednesday to bring its 2020 increase to 52 per cent.
In fixed income, the German 10-year Bund yield was up 0.041 percentage point to minus 0.51 per cent. The yield on the 10-year US Treasury note rose 0.003 percentage point to 0.54 per cent. Rising yields suggest the price of the debt has fallen.
In Asia-Pacific, stocks were mixed. Australia’s S&P/ASX 200 dropped 0.5 per cent while Japan’s Topix index and China’s CSI 300 of Shanghai and Shenzhen-listed stocks finished the session flat. Hong Kong’s Hang Seng added 0.6 percent.
