Danger of second COVID-19 wave could ‘kick’ gold prices to new record highs – The Perth Mint CEO
“Gold’s price outlook is to the upside as the world is faced with a slate of bad economic data, possible second wave of coronavirus, and unlimited stimulus, which has triggered massive gold investor demand, this according to The Perth Mint CEO Richard Hayes.
“As we see a gradual easing of all the restrictions and businesses start to reopen, that will certainly have an impact on precious metals prices. What I would say listening to the CDS and the WHO is that there is a significant danger of a second COVID-19 wave,” Hayes pointed out. “If you see a second COVID-19 wave, that will give the gold price a reasonable kick along.”
Hayes said he wouldn’t be surprised to see gold reaching new record highs in U.S. dollar terms in the near future, adding that the levels are not that far off in percentage terms from 2011-2012 all-time highs.”
British economy on track for biggest contraction ‘in living memory’
“LONDON (Reuters) – Britain’s economy is on course for an unprecedented 7% quarterly contraction after measures to slow the spread of the coronavirus forced company closures across the country last month, a business survey showed on Tuesday.
Adding to the bleak mood, figures earlier on Tuesday showed monthly car sales had dropped to their lowest since 1946 due to the closure of showrooms, while around a quarter of workers are now on a government-funded furlough.
IHS Markit said its Purchasing Managers’ Index (PMI) for the services sector fell to its lowest since the survey started in 1996, dropping to 13.4 in April from 34.5 in March, only a fraction better than an initial flash estimate of 12.3.
Last week’s manufacturing PMI was similarly dire and IHS Markit said that, taken together, they pointed to the deepest economic downturn “in living memory”.
A composite PMI of the two sectors dropped to a record-low 13.8 in April from 36.0 in March, far below the 50 mark that divides growth from contraction, indicating a 7% quarterly fall in gross domestic product, IHS Markit said.
“We expect the actual decline in GDP could be even greater,” IHS Markit economist Tim Moore said.”
US services sector posts biggest contraction since 2009 as coronavirus halts economic activity
“The U.S. services sector contracted for the first time in about a decade last month as the coronavirus pandemic brought economic activity in the country to a near-screeching halt, according to the Institute for Supply Management.
The ISM nonmanufacturing index dropped to 41.8 in April from 52.5 in March, showing the first contraction in services since December 2009. It was also the biggest contraction for the sector since March 2009, when the index hit 40. To be sure, the April print was above a Dow Jones estimate of 40.