Gold hits bull market - where next for the price?

IGTV’s Jeremy Naylor says it’s happened because of the geopolitical back-drop, the hedge against inflation, and the drop in the US dollar. The big question is where does it go from here?

While a great part of the APAC region observes Lunar Year holidays, Japan et Australia equity markets rose overnight, following the lead of US indices. Yesterday the Nasdaq Composite continued to outperform the DJIA and S&P500, with a gain of 2.01%. In Australia, NAB business confidence rose for a second straight month to -1 in December, from -4 the previous month. Economists expected the index to increase to 3.

In Europe, FTSE 100, Dax and CAC40 open today’s session higher, building on the gains recorded yesterday. Germany Gfk consumer confidence rose to -33.9 for the month of February, after -37.6 the previous month. Later this morning, Eurozone headline manufacturing PMI is expected at 48.5 vs. 47.8 in December, services PMI is expected at 50.2 vs. 49.8 in December, and the composite is expected at 49.8 vs. 49.3 in December. Later in the day, in the US, none of the PMI readings is expected to have reached the 50-level meaning that the services, manufacturing remain in contraction territory.

Elsewhere on the equity markets, Associated British foods postesd a group revenue increase of 20% to £6.7Bln in 16 weeks to January 7. Primark like-for-like sales rose by 11%, total sales by 15%, ahead of group expectations. Adjusted operating profit is forecast to be better than previously expected but lower than previous year.

Over in the US Johnson & Johnson is due to report Q4 earnings before market open. Earnings are expected at $2.24 per share. revenue is expected to decline by 2.5% to $23.90Bln. The group's pharma business is expected to grow, as some J&J best-selling drugs are gaining market share, but this should be more than offset by forex headwinds.

Microsoft is scheduled to report its quarterly earnings tonight after the US closing bell. The market forecasts earnings of $2.30 per share, which would be a 6.7% contraction from the previous year, the weakest earnings growth since 2016. Q2 revenue to come just above $53Bln, an increase of around 2.4% year-on-year, which would be the slowest top-line growth since June 2017. In details, Refinitiv estimates suggest that revenue for its 'More Personal Computing' segment may fall over 15.6% compared to the same quarter a year ago. The traditional PC market still faces headwinds, with global shipments still down 28% in Q4 YoY, according to an international Data Corporation survey. This will have a direct impact on Microsoft's Windows operating system businesses and productivity software. Likewise, its 'Productivity and Business Processes' segment is also expected to moderate further to 5.4% growth from previous 9.5%. Both segments account for a combined 59% of Microsoft's overall revenue. Investors will focus on the group's Intelligent Cloud segment, now accounting for 41% of overall revenue, and its fastest-growing business.