Stock market volatility continues as America enters recession

Stock market volatility continues as America enters recession by Michael Pinson, for Bullion by Post

Fears of a second wave of Covid-19 have caused four days of successive falls in UK stock markets, followed by a slight rebound today. Oil prices have also tumbled again as the demand slump continues due to the ongoing lockdowns and restrictions.

For the three major Wall Street stock indexes Wednesday and Thursday saw the worst performance since mid-March. This was when leading economies first went into lockdown to prevent the virus spread and caused stock markets around the world to crash.

Despite this, Eli Lee, head of investment strategy at the Bank of Singapore, told Reuters ‘It seems unlikely in our view that the equity market could revisit the levels of the March bottom, which were reflecting far greater levels of uncertainties.

Other commentators believe that the earlier stock market rallies may have been fuelled by premature hopes in seeing an end to this financial crisis.

Gold bullion, having dropped slightly on the back of the rallying markets, has gained £60 per ounce this week (+3.4%) as institutions like the World Bank warn of the severity of the recession expected for the global economy.
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Gold Price Chart 12-06-20

The price of gold in GBP this week.

The National Bureau of Economic Research in America officially designated the country in recession on Tuesday (9th), something which seemed unthinkable for the powerhouse economy just one year ago. This marked the end of 10 years of economic expansion for the US and was followed by further warnings from Chairman of the Federal Reserve, Jerome Powell, on Wednesday (10th) sparking the sell off.

Powell stated that he expects the US economy to shrink 6.5% in 2020, with unemployment reaching 9.3% this year. Unemployment has been one of the stark examples of the economic impact of the pandemic in the US; over 44 million people, a quarter of the nation’s workforce, have so far applied for jobless benefits since the pandemic hit the US.

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Rory Hall, The Daily Coin and Gospel News Network. Beginning in 1987 Rory has written over 1,400 articles and produced more than 500 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Gold Seek, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Dr. Warren Coates and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Gospel News Network to enjoy some of the best economic, precious metals, geopolitical and preparedness news from around the world.