TORONTO — Major North American indexes dipped into the red Tuesday while gold continued its streak of record highs, inching closer to breaking the $2,000-an-ounce barrier.
“In my opinion, the setup for gold still looks quite attractive here,” said Craig Jerusalim, CIBC senior portfolio manager.
“It’s got so many factors working for it,” he said, pointing to a weak U.S. dollar, ongoing China-U.S. tensions and uncertainty around the COVID-19 pandemic, among other factors.
The August gold contract advanced US$13.60 to US$1,944.60 an ounce.
“Not only do you have the technical momentum allowing it to move higher, but I think it comes down to the fundamentals that … It definitely could move higher than $2,000 in the medium term,” he said.
Given the strong momentum and fundamentals, that could be a matter of days to weeks, said Jerusalim, cautioning that any forecast on the price of the precious metal is a guess.
Major North American indexes were negative but relatively flat, with only the Nasdax composite losing more than one per cent of its worth on the day.
The S&P/TSX composite index shed 40.01 points to 16,121.32.
Over the next days and weeks, many of the companies on the Toronto Stock Exchange will report their latest quarterly earnings.
“We’re on the cusp of the heavy earnings season starting,” said Jerusalim of the performance of the Canadian index.
“Second-quarter earnings are going to be a disaster for most companies, but investors may be willing to look through some of that if the forward-looking guidance and the forward-looking outlook by management is somewhat better than expected,” he said.
That left investors in a bit of a holding pattern Tuesday.
“I think that there is some wait-and-see, calm before the storm, before the real bulk of the TSX index components being to report starting tonight.”
Investors Wednesday will watch as some of the bellwether stocks that start to report, he said, including Shopify Inc.
The tech company’s shares rose $3.70, or 0.28 per cent, to $1,308.95 on the Toronto Stock Exchange Tuesday ahead of its next quarterly report.
South of the border, where earnings season is already underway, the Dow Jones industrial average fell 205.49 points to 26,379.28. The S&P 500 index slipped by 20.97 points to 3,218.44, while the Nasdaq composite retreated 134.18 points to 10,402.09.
“Earnings are going to dictate the direction of the market over the next couple of weeks.”
The Canadian dollar traded for 74.78 cents US compared with 74.75 cents on Monday.
Elsewhere in commodities, the September crude contract fell 56 cents to US$41.04 per barrel and the September natural gas contract rose nearly eight cents to US$1.86 per mmBTU. The September copper contract gained two cents to roughly US$2.92 a pound.
This report by The Canadian Press was first published July 28, 2020.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press