New threats for stock market prices

Published on: 25-Jun-2020
Category: Trading
Last updated: 25-Jun-2020

New threats for stock market prices

It is currently not easy for the stock exchanges to raise the prices or only stable prices. Fear of a second wave of coronavirus infections is spreading worldwide and investors fear renewed restrictions that would also affect the economy. On Wednesday there was the largest increase in new infections in the United States since April and Australia also saw the largest increase in two months.

Wall Street takes note of the new case numbers and the indices show fear of the virus becoming stronger. But Donald Trump's policies also contribute to the fluctuating and falling prices. He is in the campaign for the presidential election in November and tries to convince his electorate. The Trump administration could open a new trade conflict with the EU and Britain, which will result in new punitive tariffs on $ 3.1 billion worth of goods. Most recently, Trump has repeatedly criticized Germany for defensive spending under NATO and for the construction of the Nord Stream 2 pipeline from Russia to Germany. Market analysts say that the US President wants to distract citizens from the health situation in the country and draw attention to Europe. Wall Street's major indices reflect investors' negative perceptions of politics, health, and new restrictions on a possible second wave of corona. The leading Dow Jones index ended trading on Wednesday with a loss of 2.72 percent. The broad-based S&P 500 lost almost as much with a loss of 2.59 percent. And the tech index Nasdaq, which has otherwise escaped the trend of the other indices, has now suffered a loss of 2.19 percent on Wednesday.

But investor uncertainty has always produced a winner in the past: gold. When investing in stocks becomes too risky and prices become more volatile, gold is often considered a safe investment. The gold price surpassed its seven and a half year high on Tuesday. On Wednesday, the price rose to $ 1,779.06 per troy ounce, the highest since October 2012. At the all-time high of 2011 at $ 1921 per troy ounce, the gold price still has a little way to go.


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