【TOP1 Morning】Gold fell below 1780, Nasdaq, S&P hit record close, Oil prices surged 7% this week

Yesterday Market Review

Gold

Gold slumped 2%, breaking below the key $1780 to a near five-month trough on Friday, as growing optimism about a quick vaccine-fuelled economic recovery and a smooth White House transition powered the share market to fresh records.

The spot gold closed at $1787.80 per ounce; the volatility within the day is $1774.19-$1788.58.

“As soon as prices touched below the key $1,800 level, it triggered a sell-off. It is probable that prices might test the $1,750 level given we have a strong fundamental reason like the vaccine,” said OANDA analyst Craig Erlam.

The silver closed at $22.605, the volatility within the day is $22.347-$22.745.

Analysts see the white metal rising to $30 an ounce in the next year from the current $23.36, and even higher given the large-scale stimulus needed to revive economies. It would be a continuation of the trend this year, which has led to the surge in gold and silver prices as investors hunt for havens.

Forex

The dollar held steady in thin trade on Friday but was on track for weekly losses against a basket of major currencies as it remained under pressure on improving risk appetite.

The U.S. dollar index closed at 91.79; the volatility within the day is  91.74 - 91.91.

The dollar has been under pressure this week, as riskier currencies benefited from increased optimism over a string of Covid-19 vaccines news reports and hopes for a more stable period in U.S. politics.

While the greenback will remain under pressure in the near term due to prolonged “risk-on” sentiment led by vaccine hopes, Barclay’s Kadota said the market expects the currency to the firm in mid-term.

The ECB’s chief economist Philip Lane had also warned that tolerating “a longer phase of even lower inflation” would hurt consumption and investment and cement expectations for low price growth in the future.

The euro was little changed against the greenback at $1.1905, away from a more than two months-high of $1.1941 it marked on Thursday.

Sterling fetched $1.3349, trading near a three-month high of $1.3399 it touched on Thursday, as market participants look for progress on Brexit talks.

The European Union chief negotiator Michel Barnier will talk on Friday with some of the bloc’s ministers responsible for fisheries to discuss the state of play in the trade discussions with Britain, EU official said.

The Australian dollar firmed at 0.73605, having climbed to a near three-month high of 0.7374 on Thursday.

Stock Market

Stocks rose on Friday as traders wrapped up a strong week amid decreasing political uncertainty and positive vaccine news.

The Dow Jones Industrial Average rose 37.90 points, or 0.13%, to close at 29,910.37. The S&P 500 rose 10.23 points, or 0.28%, to end at 3,639.88 while the Nasdaq Composite rose 111.44 points or  0.92% at 12,205.85.

Retailers led the early gains as investors bet on a strong holiday shopping season. The SPDR S&P Retail ETF (XRT) rose 0.9% and hit an all-time high. Etsy shares popped 10.7%, and Gamestop advanced 9%. Amazon shares gained 0.3%, and Shopify climbed 1.5% after Adobe Analytics said Thanksgiving Day online sales rose to a record $5.1 billion.

Tesla shares are up 600% year-to-date and over 50% this month.

Zoom is poised to show another monster quarter when it reports results on Monday, with sales growth expected to top 300% for a second straight period.

For the third quarter, which ended in October, Zoom is expected to show a revenue growth of 317% to $694 million, according to analysts polled by Refinitiv. That follows the growth of 355% in the fiscal second quarter and 169% in the period ended in April.

Crude Oil

Oil prices were mixed on Friday but remained on course for a fourth straight week of gains ahead of an OPEC+ meeting early next week.

West Texas Intermediate crude settled at $45.715, volatility within the day is $45.275-$45.731. International benchmark Brent crude closed at $48.396, volatility within the day is $47.903-$48.417.

“While a successful vaccine rollout should break the link between infection and mobility, even then global oil demand will likely only reach its pre-pandemic run rate by mid-2022,” JP Morgan said.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia are leaning towards delaying next year’s planned increase in oil output, said three sources close to the OPEC+ group.

The assassination of Mohsen Fakhrizadeh, a top Iranian nuclear scientist and a brigadier general in the elite Islamic Revolutionary Guard Corps (IRGC), on the outskirts of Tehran on Friday has triggered a new crisis in West Asia.

It is the most high profile killing of an Iranian regime figure since the assassination of General Qassem Soleimani, who commanded the Quds Force of the IRGC, in January this year by the U.S. in Baghdad.

The killing comes at a crucial time for Iran. There are hopes that Joe Biden, the next American President, would return to talks, ending months of “maximum pressure”, a policy adopted by the outgoing President Donald Trump, which took both countries to the brink of war after the killing of Soleimani.

Focus Today

16:00(GMT+8): Eurogroup Video Conference;

21:00(GMT+8):Germany Inflation Rate YoY Prel (NOV), Forecast:-0.1%; Previous: -0.2%;