Despite US-China tensions and surging COVID cases, the gold price has dropped below $1,800 to test a support level that proved reliable on Friday. It seems that investors have booked profits after an impressive rally that accelerated in June. This might be a temporary correction, as the depressing news can help the safe-haven consolidate above the $1,800 level.
In the forex market, the US dollar has recovered from yesterday losses as investors have realized that a quick economic recovery is not possible, while the talks about prolonged lockdowns boosted interest in safe-haven currencies. The USD Index is currently up 0.11% as of 5:30 AM UTC.
The sterling is in wait-and-see mode, moving sideways against the US dollar. The UK will report on its GDP performance and manufacturing production in a few minutes from now, probably bringing some volatility.
The euro is also quite boring, currently showing a 0.04% gain versus the greenback, to 1.1343.
Finally, oil prices have dropped about 2% on Tuesday on back of fears that new shutdowns of businesses amid surging COVID cases could hurt recovery in fuel demand. Also, investors expect that the OPEC+ would decide to ease production cuts starting from next month.
American WTI brand has lost 2% to $39.35 while Brent crude futures have declined by 1.73% to $41.98.
The market will monitor the next decision from OPEC and its allies, whose Joint Ministerial Monitoring Committee will meet tomorrow. OPEC+ is about to reduce its record production cut of 9.7 million barrels per day to 7.7 million bpd from August until the end of the year.
