3-7 AUG Review: Gold Prevails

The yellow metal was dominant last week, as it recorded a rise of more than 3% or $ 61 to reach $ 2028 an ounce. The rise in gold came after increasing tensions between the United States and China besides the increase in Covid-19 cases, especially in the US. Oil also rose last week, bringing West Texas Intermediate crude for September delivery to $ 41,228 a barrel, up by 2.5%. The Baker Hughes Rig Count the United States have reported an increase of 4 rigs in the past week, bringing the total to 176.

Energy Information Administration (EIA) data showed that oil inventories in the United States fell by 7.4 million barrels in the week ending July 31, to 518.6 million barrels.

In terms of Stocks, US stocks recorded gains, with the Dow Jones rising 0.2% to 27,433.4, posting a weekly gain of 3.8%, the S&P also recorded a gain of 2.4% to reach 3351.1, the Nasdaq Composite rose 2.5% to 11010.9.

European shares recorded gains over the past week as well, with the STOXX Europe 600 Index rising 2% to 363.5. FTSE index rose by 2.3% to record 6032.1, the German DAX index rose 3% to 12674.8, and the French CAC index rose 2.2% to 4889.5.

Last week witnessed a group of important data, on top of which was the US Non-Farm Payrolls (NFP) report, which showed that the US economy added 1.8 million jobs during July, less than the previous reading of 4.7 million jobs in June. Wages rose 0.2%, bringing the hourly wages to $ 29.39, up 7 cents from the previous month.

Data released by the US Labor Department showed that new jobless claims in the United States reached.186 million in the week ending August 1, down 249,000 from the previous week’s levels. The ADP report also showed that the private sector added 167,000 jobs to the US labor market, compared to 4.314 million the previous month.

The trade balance deficit in the United States decreased 7.5% during June, and data released by the US Bureau showed that the US trade balance deficit reached 50.7 billion dollars in June, compared to 54.8 in the previous month.

As for the European bloc, Markit data showed that the services PMI in the Eurozone registered 54.7 in July, compared to 48.3 in the previous month. UK services PMI came in at 56.5 in July, compared to 47.1 in the previous month.

On top of events was the Bank of England’s decision to keep monetary policy unchanged and stated in the statement that the UK might not be able to recover the losses seen during the pandemic period until the end of next year. The statement showed that the Bank of England decided to fix the key interest rate at 0.1%.

The US dollar on the dollar index, which measures the strength of the greenback against a basket of currencies, rose by 0.81% to 92.52.