Gold Rallies on Yellen's Testimony; Equity Markets Bounce Back
Janet Yellen became the new head of the Federal Reserve and gave testimony this week surrounding the continuation of the pre-existing monetary policy. Broad equity markets bounced back to levels last seen three weeks ago, with returns of over 1.5% since the opening on Monday. In addition, gold and gold miners also rallied as Yellen’s testimony alluded to softness in the labor market and overall economy.
“While the U.S. equity market has recovered a bit this week, we are also seeing a significant jump in precious metals which shows some skepticism about the broader economic recovery,” said David Krein, Managing Director of NASDAQ OMX Global Indexes.
INDEX MOVES THIS WEEK
- NASDAQ BIOTECHNOLOGY INDEX (NBI) has rebounded this week on strong earnings, returning 3.94% since Friday’s close. Year-to-date performance for the index is up 13%.
- NASDAQ OMX GLOBAL GOLD & PRECIOUS METALS INDEX (QGLD) was up 5.91% as of noon on Wednesday from the most recent Friday close. The price of gold is currently $1,293.00 per ounce, up around $30 from the end of last week and over $90 year-to-date.
- NASDAQ 100 INDEX (NDX) is up 2% since Friday. Look for earnings over the next two days on 9 of the 100 securities in the index today including Cisco, Mondelez, Kraft and Whole Foods, among others.
INDEX TO WATCH
- The European Central Bank is toying with the notion of dropping rates into negative territory. Look for activity in the region by tracking the NASDAQ EUROPE INDEX (NQEU) and the NASDAQ EUROZONE INDEX (NQEURO), which are up 15% and 21%, respectively, year-over-year.
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