- Global equity markets traded lower on Virus anxiety
- OPEC decides to cut Oil production
- Gold prices are rising due to coronavirus concerns
On Thursday main stock indexes generate losses, erasing yesterday's upward accents. There were no significant macroeconomic publications apart from Australian trade balance, which showed concentrated falls for both imports and exports. Unsupportive data combined with ongoing concerns associated with the outbreak of the coronavirus caused Aussie to weaken. The data from the US were mixed and did not cause any major movement in the markets. The World Bank announced that is willing to provide help in the sum of $ 12 billion for countries struggling with the virus outbreak, the IMF will allocate $50 billion, China stated that will spend $16 billion and the US Congress agreed on an $8.3 billion plan. So far, the steps taken by central banks, governments and various financial institutions failed to calm financial markets on which pessimism still prevails. The Dow Jones went down 2.89%, the S&P fell 2.69% and the Nasdaq dropped 2.1% lower. European indices also traded in red. FTSE 100 declined 1,24%, DAX lost 1,47% and CAC 40 fell 1,54%.
Gold and silver prices were higher in today’s trading session as the current situation supports safe haven assets. Gold rose 1.26% and silver gained 0.60%. If the situation on the markets does not improve in the near future, precious metal prices may rise further.
Representatives of the OPEC cartel gathered in Vienna today for its 178th meeting as global demand experienced a rapid decline recently due to the concerns associated with the virus. As expected by many market participants, OPEC decided to reduce oil production by 1.5 million barrels per day. However the decision is not certain, as it has not yet been approved by Russia. As a result oil prices dropped by 0.60%. Russia's decision should be known tomorrow. Therefore traders should expect increased volatility in the oil market.
Tomorrow afternoon data from the US and Canadian labor market will be released, which may trigger some movement on USD/CAD pair. Of course coronavirus still remains the main topic which investors must watch out for. Any new information related to the epidemic may trigger a sharp market reaction.
Gold is testing local highs at $1660.00 level. If the price manages to break through this level of resistance, then market might move towards this year's highs at $1689.46. Source:xStation5
