Nasdaq Hits Record High Again in 2 Weeks... Gold Price Sees Biggest Rise in 4 Months (Comprehensive)

Nasdaq Index Hits All-Time High Since August 6
'Gold Rush' Driven by US Treasury Yield Decline and Weak Dollar

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Investment sentiment was stronger than market concerns over the delay in the announcement of the economic stimulus package. The Nasdaq index on the New York Stock Exchange hit another all-time high on the 17th (local time). On the same day, international gold prices also rose by the largest margin in four months, reaching $1,998.70.

On the New York Stock Exchange (NYSE) that day, the tech-heavy Nasdaq index closed at 11,129.73, up 1% (110.42 points), setting another all-time high. This was about two weeks after August 6, when it was at 11,108.07.

CNN analyzed, "This shows that the market is not shaken at all despite the stalled U.S. economic stimulus negotiations, escalating U.S.-China tensions, and the ongoing COVID-19 pandemic," adding, "The buying frenzy is intensifying due to the strength of tech stocks."

While the New York stock market showed mixed trends, Tesla was undoubtedly the driver behind Nasdaq's record high. Tesla surged 11.2% to close at $1,835.64, surpassing the $1,800 mark for the first time ever. Tesla has surged nearly 338% this year alone, and after announcing a 5-for-1 stock split on the 11th, it soared more than 33% in just one week.

Following that, semiconductor company Nvidia's stock price jumped 6.7%, and Amazon also rose 1.1%, leading the Nasdaq rally.

On the same day, the S&P 500 index closed up 0.27% (9.14 points) at 3,381.99. Meanwhile, the Dow Jones Industrial Average closed down 0.31% (86.11 points) at 27,844.91.

International gold prices also rose by the largest margin in four months. On the New York Mercantile Exchange, December delivery gold closed at $1,998.70 per ounce, up 2.5% ($48.90). According to financial information provider FactSet, this was the largest increase since April 22.

Along with gold, U.S. Treasury bonds and the dollar, which are also considered representative safe-haven assets, weakened, causing previously dispersed investment demand to flow back into gold. The yield on the 10-year U.S. Treasury note fell noticeably to 0.676% from 0.708% the previous trading day. The dollar index, which measures the value of the dollar against major currencies, also dropped 0.1%.

There is also an interpretation that the so-called "gold rush" was reignited after it was revealed that Berkshire Hathaway, led by investment genius Warren Buffett, purchased a large amount of shares in Barrick Gold, the world's second-largest gold mining company, in the second quarter. Bloomberg reported that Berkshire's Q2 investment portfolio (as of June 30), disclosed on the 14th, included an additional 1.2% stake (20.9 million shares) in the Canadian major gold mining company Barrick Gold. This amounts to about $565 million (approximately 670 billion KRW) at current value. Buffett had previously avoided investing in gold, citing its inability to generate cash flow, but his break from his investment principles to invest in gold has fueled the rise in gold prices.

On the same day, shares of gold mining company Newmont Mining also jumped 7.05%.