European Strength Dictates Gold Swing
APMEX
9/11/2020 8:16:46 AM
European Strength Influences Gold Swing
The tech stock selloff is the big story of the first half of this short Labor Day week, and markets haven’t completely rebounded from the wind going out of Microsoft, Google, Apple and Facebook’s sails. Tech stocks were leading a bull run that had continued since March, but with that bubble somewhat deflated, traditional hedges like Gold got more attractive.
Gold had a good week, likely ending up for the week as a whole after three days of gains and a slight Friday drop. The European Central Bank decided to stay its low inflation course, which has strengthened the euro against the dollar. Between the eurozone’s low inflation and American high inflation, Gold has stayed mostly stable, hitting $1,953.28 by 9 a.m. EST.
The American economy has had several challenges to work through this week. The tech run was mostly American companies, and though Senate Republicans worked to push through a smaller COVID-19 stimulus package it was blocked in the Senate on Friday. Joe Biden gave a policy speech in his Democratic Presidential candidate run on Wednesday that indicated he would advance protectionist practices for American business if he were elected, the same as current president Donald Trump. Biden pledged to close loopholes Trump had left open. Jobless claims held steady from week to week but overall jobless are increasing.
U.S.-Chinese tensions over the TikTok app have continued. It looks like ByteDance will miss the deadline for letting go of its U.S. operations, and U.S. President Donald Trump does not seem willing to budge. It’s unclear where the company or U.S.-Chinese relations are headed.
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