Financial markets show mixed performance post Covid-19

Overall volatility and trading volumes continue to run high

All market research and content is provided by PrimeXBT. 

As lockdown conditions finally start to wind-down around the world, people are getting back to work, and businesses’ are weighing up the implications the last few months have had.

Major corporations can once again return to serving shareholder interests, and demand will return to commodities that witnessed interest decline but supply continues to rise.

Despite the recovery, overall volatility and trading volumes continue to run high but a glimmer of positivity has given investors and traders something to get excited about.

No risk, no reward

The risk remains the biggest threat hanging over markets. The last time the market panicked was on Black Thursday and those affected are still feeling the effects from the selloff.

But until fear, uncertainty, or doubt spills over again, the market looks poised for further upside and at the very least, continued opportunities. To help traders tread through the shark-infested waters, PrimeXBT has compiled this in-depth financial market research report to provide an at-a-glance look at the most important factors fueling today’s markets.

Safe haven

The United States Dollar and Japanese Yen have fared well compared to other national currencies due to their safe haven like qualities. USD remains the global reserve currency, and its strength often determines the performance of other markets across the globe.

However, US monetary policy has been under the microscope lately, and increasing tensions between the US and China has caused the dollar to weaken as a result.

Consumer spending is at an extreme low, unemployment rates in the country have reached the worst levels since the Great Recession, c

and the Federal Reserve continues to grow its balance sheet by trillions to prevent the superpower from faltering from its leadership position.

GBP had been gaining against USD, but recent comments from Brexit caused a short term pullback. However, there’s already been a recovery and a breakout is expected soon.

EUR also received a major boost on behalf of the debut of a new stimulus plan.

The silver lining

Gold has recently hit highs not seen in almost a decade and given the hyperinflation that is said to inbound, it is expected to continue to climb.

Bank of America raised its forecasts for gold from $2,000 to $3,000 an ounce. Entrepreneur and author of Rich Dad, Poor Dad Richard Kiyosaki expects the asset to reach $3,000 over the next couple of years.

Although, not everyone is convinced. Kitco’s Peter Hug claims that inflation will take time to set in, and there’s currently not enough demand in the gold market to support such high prices on gold bullion.

UBS analysts are expecting a crash in the second half of 2020 as economic stimulus packages begin to kick in and gain traction.

Silver is also starting to pick up momentum as gold trading starts to cool off. Capital may be flowing out of gold and into silver, helping the precious metal safe haven set a record for the largest monthly gain in nearly 7 years.

On the two asset’s ratio, gold has fallen below the 100-day SMA, signaling that silver could outperform gold for an extended stretch

Bitcoin halving impact

For the same reasons investors and traders are experiencing a new age gold rush, they’re also flocking to Bitcoin and other cryptocurrencies due to their hard-coded digital scarcity.

Renewed interest around Bitcoin’s halving – a mechanism designed to further control and reduce the already limited supply of BTC – has caused institutional interest to spike.

Billionaire hedge fund manager Paul Tudor Jones has compared the digital asset to gold in the 70s. Low prices have even got retail investors interested once again.

However, a crash could hit the cryptocurrency market, as the halving also appears to be causing miners to concede and cease operations. The asset’s hash ribbons point to this only just beginning, and previous instances all led to a collapse.

Elsewhere in the crypto market, Ethereum could soon show some growth against BTC, with the advent of ETH 2.0 and the growth of DeFi in the coming months.

Economy reopening effect on indices

It’s not all just hedges against inflation or currencies themselves that are heating up across the financial market. After the Black Thursday crash, most major stock indices have made a sharp recovery. But few indices have grown as strongly from lows as the BEL 20, ASX 200, the DOW, and the IBEX 35.

The DAX, CAC 40, and FTSE struggle compared to others, but are expected to catch up to the current top performers in the weeks ahead.

Oil prices on the rise

Last month, the world witnessed oil trading go into negative territory for the first time in history. The abundance of supply and crippled demand due to travel restrictions caused oil prices to plummet.

A return to a more in keeping supply after cuts reignited interest in crude oil prices and WTI is on track for the best month ever but is still down 46% on the year.

Brent crude oil is up over 130% from lows set last month in April.

All market research and content is provided by PrimeXBT. 

Sources: FRED, Investing, FXEmpire, FXStreet, Yahoo! Finance, Forex Live, CNBC, Bloomberg, Kitco, NASDAQ, OilPrice

PrimeXBT is an award-winning Bitcoin-based trading platform offering long and short positions on all of the markets mentioned above, including major forex currency trading pairs on USD, GBP, EUR, and more; stock indices such as the DAX, FTSE, and the DOW; gold, silver, oil, and gas; and cryptocurrencies like Bitcoin and Ethereum.

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