Last month’s movements of gold prices are startling. After an impersonal rally this year from $1451 per troy ounce in March, the yellow metal in November lost 10% of its maximum price of $1965 per ounce to $1774, the worst monthly loss for the last four years. Did gold lose its function as a safe haven asset in November amid roaring pandemic and global economic turmoil?
Hardly. Gold maintains its safe haven status. Economic “storms” and jeopardies have eased since this spring, when investors sheltered themselves in gold instruments.
This is the end of a rather chaotic November, but still some regularities or patterns could be remarked upon. Vaccine hopes generally got the better of many market worries, including current COVID-19 limitations in many countries as well as protracted uncertainty around the U.S. power transition process, and what seems to be a never-ending Brexit deadline. Despite all odds, stock markets are keeping their standards high.
market sentiment is being of appetite for risk. Stocks stabilize as investors
consider positive factors such as the vaccine, the open path for Joe Biden in
the White House and also Janet Yellen's nomination to the U.S. treasury.
The yen accelerates
on the Asian journey, spurred by the flight from risk related to fears about
the effectiveness of covid-19 candidate vaccines.
yields fell yesterday due to risk aversion, which led to bond rises.
follow mixed ahead of the OPEC+ meeting next week.
Bitcoin, a leading digital currency, lost almost 12.5% on Thursday morning after it almost hit all-time highs of December 2017 at $19,891. In 2020 the digital currency has repeated it’s hype fromthree years ago when it rocketed up by 484% from its lows of $4000 in March to this year’s high of $19,349 which was reached on Tuesday. Bitcoin has performed notably in November this year as it gained 37%.
The rally in the leading cryptocurrency may be partially explained as it is positioned as a risky asset or “digital gold” opposed to the U.S. Dollar.
Stock markets generally continued to grow all over the world while the U.S. Dow Jones Industrial Average (DJIA) index cracked a 30,000 psychologically powerful milestone on Tuesday, for the first time in history. DJIA went through the 20,000 mark in December 2016 when Trump became the elected president four years ago, and now the index is more than 10,000 points higher. The index is being fuelled by sharply rising oil prices, as the North Sea Brent benchmark soared above $48 per barrel, also hydrocarbon-related assets like Exxon Mobil (+6.66% on Tuesday) and Chevron (+5.
The single European currency was steady above 1.1850 against the U.S. Dollar before noon, and then it even jumped to the 1.19 area despite a set of negative signals from the data presented by IHS Markit. However, it was a widely anticipated bad gift during the current epidemic situation, and so it could not really cook or spoil the real Euro goose. Some virtuous American folks may call it their Thanksgiving turkey, if the Greenback would rise instead of the Euro, in the lead-up to family celebrations in the United States. Just as Thanksgiving itself has been plagued by viral spikes, the U.S.
The Chinese Yuan, or Renminbi, is almost unmoved today as People's Bank of China (PBoC) kept its one-year loan prime rate (LPR) steady at 3.85% for the eighth month in a row since April. That is a major lending rate applied for corporate and household loans, when another benchmark, a five-year LPR, which influences the pricing of mortgages, remained at 4.65% per annum. The interest rates in China are now almost 0.
The pandemic of coronavirus pushed global debt levels to new highs of $272 trillion in the third quarter of 2020, rising by 6.7%, an unprecedented level since 2016. The level of the global debt is expected to top $277 trillion by the end of 2020, according to the Institute for International Finance (IFF) Global Debt Monitor. This would represent a debt-to-GDP ratio of 365%.
In 2019, IFF recorded the rise of the global debt by $10 trillion or just 4% to $255 trillion. Global GDP last year, according to the United Nations data, rose by 2.3% only.
This week, the global markets are still forming a contradictory movement but with a rather stable sentiment. October's nationwide retail sales data from the United States, which were released on Tuesday, may hardly be called a determinative factor, but the figures left a negative trail of smoke. Despite the excellent third quarter financial reports of big store chains like Walmart discount hypermarkets and groceries or Home Depot, a large home improvement retailer, their shares were trading lower.
U.S. retail sales rose by 0.
The economic agenda of the week started with generally positive signals from Asia. A weekend trade deal fostered hopes of a fuller recovery from the shocks of this year, at least for the Asia-Pacific region, after 15 Asia-Pacific economies including China and Japan, agreed to reduce future tariffs. Meanwhile in Japan, the gross domestic product (GDP) gained 5.0% in Q3 versus Q2 2020, which was better than 4.4% expected by Bloomberg expert poll, also comparing to the previous quarter, during which the economy dropped 8.2%. A growth in the external demand component was at 2.