The number of infected people in the world is increasing with the loosening of restrictions on the opening of economies. The total number is approaching 16.5 million, of which nearly 4.5 million have COVID-19 in the United States. It is also the epicenter of the epidemic with over 55 thousand infections per day.
In Brazil, 23.2 thousand new cases were reported, and in India 46.4 thousand. Meanwhile, the total number of COVID-19 cases in Russia exceeded 820 thousand, and in South Africa almost half a million. The epidemic is also reviving in China and Western Europe. Belgium has already decided to reinstate some previously lifted restrictions. Therefore, another lockdown is not excluded, even before the autumn. In this case, investors must count on further stimulus from governments and central banks. Therefore, attention could be drawn to the two-day meeting of the US Federal Reserve, which begins today, and to the findings of politicians in the US who are trying to push through another USD 1 trillion aid package.
On the financial markets gold and silver, as well as the US dollar and cryptocurrencies, attract attention. This is where the volatility seems to be the highest. On the gold market, there has been a correction after an earlier rally towards 2000 USD per ounce. The data which could have affected this market showed that the consumption of gold in China fell in the first half of 2020 on an annual basis by over 38%, while Chinese gold production fell by 7.3% in the first half of this year. Nevertheless, in the face of the epidemic and political conflict between the US and China, gold may still be chosen by investors as one of the safer forms of capital investment.
What is very interesting, according to the CEO of one of the global crypto exchanges it was noticed that with the launch of direct transfers of stimulus checks related to the epidemic for U.S. citizens in the U.S., at the same time, the exchanges received accounts funded by the amount of support from the U.S. government. This may mean that some Americans buy cryptocurrencies for received checks instead of spending it on current expenses. Further ideas of the U.S. government for direct transfers may, therefore, be fuel for this market.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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