Gold hits record high and dollar slumps as traders fret over the economic outlook for the US

Gold hit a record high and the dollar slumped to a low against a basket of currencies amid worries over the deteriorating economic outlook for the world’s largest economy. At 6.20am, the yellow metal was changing hands for US$1,956.20, up US$31 in a fairly busy opening session in Asia. On the current trajectory, the price should quickly pierce the US$2,000 mark predicted by Citi earlier this month. Gold, a go-to in times of uncertainty, continued to react to US jobless claims, which rose unexpectedly and for the first time since March, while the American currency dropped to levels not seen for two years. Striking an upbeat note amid a chorus of worries, CMC Markets analyst David Madden pointed to the experience of Europe in recent weeks as it has tackled the worst the coronavirus pandemic. “One thing we did learn last week was that the rebound in economic activity in France, Germany and the UK has continued apace through June and July, with improvements in both manufacturing and services sector activity, which offers hope that these economies could well outperform the US economy, in the weeks and months ahead, second virus spikes notwithstanding,” he pointed out. However, he dampened the mood a little by acknowledging that eyes are all now trained firmly on Spain, where worries are growing over a potential second wave. Against this backdrop, the FTSE 100 looks set for a benign start to the trading week with traders calling the UK blue-chip index six points higher to 6,129.89. Looking ahead, seven of the UK’s 10 biggest blue-chip companies report in the coming week, plus four of the five big banks and, across the Atlantic, tech titans including Apple and Alphabet will provide quarterly updates. The Footsie giants spread across the global pharma, commodities and consumer goods industries, so their updates are is likely to provide a crucial litmus test for the health of the global economy and the direction for equity markets for the coming weeks. And with Wall Street watchers are worrying about a bubble as earnings season rolls round to include two of the world’s largest companies and a Federal Reserve policy statement, it’s undoubtedly a compelling week for finance fans. Around the markets Pound worth US$1.2833 (+0.3%) Gold US$1,956.20, up US$31 an ounce Brent crude flat at US$43.34 a barrel