Gold Extends Push Higher, Dollar Softens


Gold prices shot higher as investors favored the precious metal amid growing economic concerns and massive stimulus measures by Central Banks around the world. To fight Coronavirus's impact on the economy, central banks eased their monetary policies, adding money supply to the market, pushing market participants to seek gold for hedging against future inflation and economic risks. The price of a gold ounce rose to $1725, the highest level since November 2012. Meanwhile, the price of a silver ounce edged higher to a one-month high of $15.61, and palladium futures rose to $2215.


Major US stock-index futures inched higher during the Asian session, recovering yesterday's losses supported by optimistic Chinese data. The Chinese trade balance in March bounced to a surplus of $19.90 billion from a negative $7.09 billion in February, giving investors hope that the economy could recover fast from the impact of Coronavirus. On the other hand, market participants are looking forward to the corporate earnings to weigh the effect of Covid19 on US companies. The Dow Jones Industrial Average futures rose to 23739, the S&P500 futures climbed to a one-month high of 2805, and Nasdaq futures advanced to 8488.


The dollar index, which measures the greenback against a basket of major currencies, eased further to 99.17 as investors continue to weigh the impact of Covid19 on the US economy and the Fed's ability to fight it. The measures that were taken by the Federal Reserve to support the economy weighed on the dollar, especially since the Fed expressed the commitment to buy the needed assets. The buck inched lower against counterparts, where the EURUSD rose to $1.0948, the GBPUSD soared to a one-month high of $1.2576, and the AUDUSD extended positive rally to $0.6432.


Oil prices continued to digest the outcome of the OPEC+ cuts and its effect on the market. Oil benchmarks failed to rally positively despite the taken measures as market participants are not convinced that these cuts are enough to offset the sharp drop in demand. The West Texas Intermediate May contract fell to $22.04, and Brent June futures tumbled to $31.28.

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