U.S. Crosses The 3 Million Confirmed Cases Mark
The coronavirus situation shows no signs of improvement as the U.S. has just crossed the 3 million confirmed cases mark while a number of states reported record daily increases in the number of coronavirus cases.
These states include the populous and economically important California and Texas. Yesterday, virus worries led to a sell-off closer to the end of the trading session.
Today, traders stay reasonably optimistic and bet that serious virus containment measures will not be implemented. The world markets are rather nervous but there is no sell-off.
With no important economic reports scheduled to be released today, S&P 500 futures are swinging back and forth in the premarket trading session and stay mostly unchanged.
Gold Gets Above $1800
The rally in gold continues. Previously, gold futures have tested the $1800 level but spot gold settled below this psychologically important level. Today, spot gold has gained more upside momentum and managed to get above $1800 per ounce.
This is a major development for gold mining stocks, many of which continue to trade below their highs reached back in May. I’d expect to see an influx of new money into the segment which will provide material support to gold-related equities.
The fundamental setup is very favorable for gold, and all-time high levels that were reached back in 2011 are now in sight. In my opinion, gold has decent chances to test the $1900 level due to problems on the virus front and rampant money-printing from the world central banks.
Oil Manages To Stay Above $40 Despite The Increase In Inventories
API Crude Oil Stock Change report showed that crude inventories have increased by 2.05 million barrels in a week. Meanwhile, gasoline inventories declined by 1.83 million barrels while distillate fuel inventories declined by 0.85 million barrels.
This report was not very optimistic for the oil market since we are in the middle of driving season and inventories should decline more aggressively given the implementation of production cuts.
However, oil managed to stay above the $40 level which indicates the strength of the current bullish trend. Today, this trend will be tested by the EIA Weekly Petroleum Status report which will provide estimates of inventories and U.S. domestic oil production.
For a look at all of today’s economic events, check out our economic calendar.