Continuing U.S. Economic Growth Pushing Oil, Gold Prices Up

In the run-up to the election results, investors are focused on corporate earnings far exceeding forecasts for the third quarter, as well as on macroeconomic indicators reflecting the ongoing economic recovery across the Atlantic, amid resurgence in the number of new Covid-19 cases.

Investors heard on Tuesday that manufacturing orders in the United States jumped 1.1 percent in September, compared to a market forecast of 0.9 percent and -0.6 percent in August. The October ISM manufacturing index was driven by a sharp rise in the production of automobiles.

Oil prices, which grew sharply for the second session in a row after a rise of about 3 percent on Monday, benefited from the return of risk appetite on Tuesday. The price is supported by the expectation that the OPEC+, led by Saudi Arabia and Russia, will postpone the 1.9 million barrels per day rise in supply, scheduled for 1 January.

Oil and gold are rising and the dollar is rising.

On Tuesday, the December contract for U.S. light crude (WTI) gained 2.3% to $37.66 on Nymex, while the January delivery contract for Brent advanced 1.9% to $39.71. Last week, the two oil varieties dropped by 11% in the case of WTI and 8.5% in the case of Brent, in the face of the possibility of recession in the European economy arising out of the second wave of Covid-19.

For the third day, Gold reported its recovery, climbing 1 percent on Tuesday, and reaching the $1,900 per ounce mark.For the December futures contract on the Comex, the price was at $1,910.40. The yellow metal is also benefiting from the dollar’s sharp decline, which in recent days has served as a safe haven.

The dollar index (measuring its evolution against a basket of six currencies) fell by 0.60 percent to 93.55 points, while the euro recovered by 0.5 percent to $1.1702, following a decrease of more than 2 percent in six sessions. Government bonds decreased, driving up interest rates, with Tuesday’s 10-year T-Bond yield recovering 5 basis points, rising to 0.89%, the highest since last June.


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