- Stocks bouncing on turn around Tuesday, gold rallies.
- Gold correcting higher as volatility shows signs of slowing.
The VIX has dropped on Tuesday and Gold is higher, currently at $1525.73 and trading between $1,465.93 and $1,554.00. Global panic sets in and gold remains as the go-to precious metal of choice in a flight to safety.
Regrouping from the sell-off, induced by a flight to cash to cover margin calls and losses, gold has spiked by over 1% on turnaround Tuesday, with stocks making valiant efforts on Wall Street to recapture some higher grounds within the freefalling market.
US President Trump and the White House are doing very they can to calm the panic, lifting stocks on Tuesday with various announcements of stimulus. The lastest, Trump said, “hopefully, the US will not need a national lockdown,” while speaking to reporters in the White House briefing room. Trump further added the support for bellwethers such as Boeing and the GE in the face of the coronavirus outbreak which the stock market has cheered.
Investors will continue to look to the performance of risky assets, the spread of the coronavirus, and liquidity in the front-end of the curve for direction for gold prices and with risky assets likely to continue falling, rates should continue to move lower, supporting gold when the volatility settles, as we are starting to see for a day, a least, today.
Watch for lower vol, higher gold
“While the uncertainty surrounding the virus is likely to keep volatility and liquidation risks high, the pending historic low real/nominal interest rates, liquidity injections, quantitative easing, income support programs and potential relief in the commercial paper market should reduce volatility and drive capital into gold once again when the dust settles,”
– analysts at TD Securities argued.
Gold levels
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