Gold reaches 10-month highs while stocks remain supported

Summary:

• Gold hits highest level since last April

• Stocks remain near recent highs on presidents day

• DE30: German automakers in retreat under tariff threat

• European post offices start to sell cryptos

There’s been a marked push higher in the price of Gold this afternoon, with the market moving above the high of 1326 seen at the end of January to trade at its highest level of the year. In fact, you have to go back to April 2018 to find a higher level for the precious metal. What is notable is the growing divergence between Gold and both the USD index and also the US stock market with the inverse correlation between both of these and Gold that was prominent in the last quarter of 2018, weakening significantly.

US stocks remain well supported and near recent highs around the mid-point of what could be a quiet session as the US observe a bank holiday. The US500 trades close to its highest level since the beginning of December after another day of solid gains on Friday as ther market builds o the recovery seen throughout the year. For this afternoon’s trade, volumes will likely be subdued due to both the NYSE and NASDAQ being closed for Presidents day although all US markets on xStation will continue to operate with the usual trading hours.

European stock markets have begun the new week with mixed results despite a rally in Asia where the gains were spurred by hopes ahead of another round of trade talks in Washington between the world’s two largest economies. Meanwhile, a report sent on Sunday to the White House by the US Commerce Department is weighing on European automakers. While we have yet to get any details concerning this report, this has already affected auto producers in Europe. Let us remind that the falls seen in the morning (Volkswagen, Daimler, Continental and BMW) are a result of a threat that the US could impose tariffs on imported vehicles and auto parts from Europe.

It is worth mentioning a speech delivered by Angela Merkel on Saturday where she said that “if these cars [imported from Europe to the US], which are no less a threat than those built in Bavaria, are suddenly a national security threat to the US, then that’s a shock to us,”. According to the IFO estimations Germany would be hurt by sanctions with a net negative effect on exports of 11.6 billion EUR. While we have a holiday in the US on Monday there is a possibility that some details pertaining to the above-mentioned report could be released. Some rumours suggest that the report submitted to the White House include tariffs on vehicles imported from Europe as an option to protect the US national security.

Over the weekend major cryptocurrencies managed to produce noticeable rises. This information is especially true when we take a look at the Ethereum price D1 chart. The second largest cryptocurrency experienced three consecutive bullish candlesticks, and it has begun the new week also in upbeat moods. According to CoinMarketCap, the market cap of cryptos stands around the $126 billion handle whereas the capitalization of Ethereum accounts for roughly 11.5% of this value.  Liechtensteinische Post, the government-owned post office in Liechtenstein, announced on Friday that it would offer cryptocurrencies through its post offices. The Post will provide such services in a partnership with Värdex Suisse which is the largest cryptocurrency ATMs provider in Switzerland. Initially, crypto services will include only Bitcoin, but the Post plans to expand its cryptocurrency offer in the future, as the Post’s release reports. Let us recall that Liechtenstein is one of the most crypto-friendly countries in the world.