Markets Still Unstable as New COVID Strain Spreads

The US reported its first case of the new COVID strain, the mutant variant that is 70% more transmissible, in a person who does not have any significant travel history.

Even though global indices opened at record highs yesterday, three main indices printed pullbacks due to mild selling pressure. The Nasdaq Composite recorded a decline of 0.41%, the Dow Jones Industrial Average went down by 0.21% and the S&P 500 by 0.22%. Real estate, industrials, and energy sectors contributed more to the decline.

The GBPUSD continued showing modest gains and consolidated at 1.3500 rising from 1.3450. Though the chances of an economic recovery look grim for the UK, the pace at which vaccination is being done raises hopes in the market. 

Despite a lack of clear direction in the market due to the wait-and-watch approach and stimulus package, silver managed to remain supported above the 26 USD mark and form a bullish flag.

Gold is also playing a waiting game and pondering what may happen in 2021. It has failed to capitalize on the USD’s recent weakness and has shied away from the recent high of 1900 USD.