US Open – Virus cases continue to surge, Risk-on drives dollar down, gold higher, Oil steadies

US stocks are mixed in early trade but seem poised to struggle to break past some key technical barriers as the reopening of the economy is being met with a surge of new coronavirus cases.  The S&P 500 will need a strong catalyst to break past the 3,1000 level. 

While the number of new COVID-19 cases is noticeably higher in the southeast regions, that is being attributed to reopening before seeing their cases come down to low levels.  Despite the surge in new cases, risk appetite is holding up because confidence is higher with how doctors can treat the virus and now that the virus is working its way through younger individuals.  If the seven states that hit record highs with daily cases continues to grow exponentially, that should start to weigh on risk appetite.  Big-tech is where everyone wants to be and all eyes will be on Apple’s WDC conference today. 


The dollar is declining as risk appetite continues to be immune to fresh record spikes with new Covid-19 cases.   If these record spikes in cases eventually test healthcare capacity in the US, then we might see a greater impact with the risk-on trade.  For now, reopening momentum and the Fed’s efforts should keep the dollar under pressure. 


Energy markets are being weighed down by persistent global virus concerns that are starting to overshadow reopening momentum.  Oil prices however seem destined for a consolidation phase as tankers begin to offload crude geopolitical risks, Beijing appears to be quickly handling their second wave of the virus, and as New York City, once the epicenter of the coronavirus pandemic in the US enters its phase 2 reopening.  Hurricane season and geopolitical tensions in the Middle East could also be a wildcard for oil bulls.  The situation between Libya and Egypt could grow into something bigger and investors should stay on alert for any surprise disruptions in crude production in the Middle East. 

Delta’s news of resuming flights between the US and China on Thursday will be another positive for the crude demand outlook.  The resumption of international air travel will be crucial for the crude demand story, but many travelers will avoid airplanes if stricter restrictions on passengers are imposed. 


Gold prices pared most of its earlier gains after the PBOC kept their loan prime rates unchanged, bursting the hopes of many that were expecting to see some additional targeted easing.  Gold will continue to benefit from the stimulus trade, which will remain intact as an elevated unemployment rate will persist for many quarters, economic activity will not normalize quickly during staggered reopenings, and any breakthrough with a vaccine won’t be discovered for months. Another key driver for gold will negative rates, the 10-year real yield (TIPS) keeps on dropping. 

The break of the $1750 level was critical for gold’s path higher.  If the coronavirus spread continues to see a record increase in global cases, gold prices should be able to target the $1800 an ounce level at some point this week.   

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.