There is no doubt that 2020 will be written about in history books as a year that billions of individuals will want to forget. For those individuals lucky enough to not contract the virus, the global pandemic overwhelmingly affected every component of their daily life creating a “new normal”.
Sadly, the world has lost almost 1.8 million souls, as the coronavirus left no part of the globe unscathed. With only one day left in 2020, the total number of infections from the virus this year is 82,456,204, according to John Hopkins University of Medicine.
Luckily the end of this year brought forth real hope as Pharma companies created multiple vaccines that are now being safely administered to billions of individuals worldwide. Concurrently as countries rush to vaccinate their citizens many of the top infectious experts predict that the pandemic will get worse before it gets better.
U.S. Equities and Gold trade to a new record all-time high
The pandemic also had a huge impact on the financial markets. All three major US indices are currently at all-time highs. The Dow will most certainly close above 30,000, and at the close of trading, today is at 30,409.56. The NASDAQ Composite and the S&P 500 are also at record highs. Partially responsible for the historical rise in U.S. equities is actions by the Federal Reserve as they initiated quantitative easing in conjunction with interest rates near zero.
However, these gains occurred simultaneously as the United States saw the highest unemployment rate since the great recession in the 1920s. The number of unemployed in the United States swelled to 23.1 million individuals or 14.7% in April. Currently, the unemployment rate has fallen to 6.7% according to the U.S. Bureau of Labor Statistics jobs report on December 4.
On the first trading day of this year, gold pricing was at $1521. Gold traded to a high of $1750 in March before dropping to its lowest value this year of $1450 in the middle of March. This was followed by a multi-month rally that took gold from $1450 to $2088 during the first week of August. From August until November gold prices declined each month trading to a low of $1780 in November. The correction ended this month with gold opening at approximately $1780, and with only one-half trading day left in the year is currently fixed at $1899, just one-dollar shy of $1900 per ounce.
While it is highly likely that the global pandemic will conclude at some point next year, the economic fallout will linger long after the pandemic is only visible in our rearview mirror. The massive expenditures by the U.S. Treasury Department of approximately $4 trillion in two rounds of fiscal stimulus will have a dramatic impact on the economy in the United States which could certainly take the U.S. dollar lower and gold to a new all-time record high next year.
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Wishing you as always, good trading and good health,
Gary S. Wagner
This article was originally posted on FX Empire