Market Highlights – Total gold ETF holdings stood at a 7-year high, keep an eye on Powell’s speech
Business and Finance News:
The dollar index hit 93.78, highest since August 12 due to risk aversion among investors amid falling stock markets that are being dragged down by a surge in new COVID cases and uncertainty over US’ upcoming election in November. Spot gold plunged nearly $70, the biggest drop in nearly five weeks. Meanwhile, oil prices are down by more than 3% as Libya is set to restart its oil production, which exacerbates the concerns over the supply in the market.
U.S. stocks recovered some of their losses from Monday’s sharp decline as the rebound of large technology stocks has allayed the concerns over stimulus measures and a report on suspicious transactions in global banks. Commodity, industrial and financial stocks continued to drag the S&P 500 to near two-month lows, with JPMorgan Chase, Bank of America and Citigroup all down by more than 2%.
The dollar index surged to a near-six-week high on Monday, while U.S. stocks fell sharply, with gold reaching a more-than-one-month low of $1,882.53. Gold ETF holdings increased by more than 10 tons for two consecutive trading days, and by more than 18 tons on September 21, reflecting the strong buying demand in the market that is providing support to the gold prices. However, given the strong short interest, gold prices may decline further.
Federal Reserve Chairman Colin Powell and Treasury Secretary Henry Mnuchin will testify before the House Financial Services Committee at 22:30 tonight. Powell’s speech was released ahead of schedule last night.
In his speech for Tuesday’s hearing before the House Financial Services Committee, Powell said the U.S. economy is improving, but there is still a long way to go to fully recover from the coronavirus outbreak. He said a number of indicators have shown a marked of improvement in the U.S. economy, but employment and overall economic activity remained well below pre-epidemic levels and the road to economic recovery remained highly uncertain. Powell also reiterated that the Fed will support the recovery at all costs.
Key economic and events to watch today (Time zone: UTC+8):
22:00 U.S. Existing Home Sales in August
22:00 U.S Richmond Manufacturing Index
22:00 Speech by U.S. Federal Reserve Bank of Chicago President Charles Evans
22:30 U.S. Fed chairman Jerome Powell and Treasury Secretary Steven Mnuchin’s testimony
02:30 Sept 22 Last trading day of New York crude oil futures for October delivery
04:30 Sept 22 U.S. API Weekly Crude Oil Inventory
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