Financial markets continue to be volatile amid widespread concern among investors over the state of the world economy, and in particular the debt problems in the US and Europe.
The fear is that government spending cutbacks and declining manufacturing will prolong an economic slowdown and make Europe’s debt crisis worse. Recent figures show factory output stagnating in the US, Europe and China.
Shares in Europe’s major markets are sharply lower, following steep falls in Asia in the wake of the spread of the euro debt crisis to Italy, and a spate of bad news on the US economy on growth and consumption. Technical reasons did caused a bit of a rebound in some European bourses.
Better-than-expected jobs numbers failed to boost Wall Street when it opened. Private employers in the United States hired an additional 114,000 people in July, according to figures compiled by payrolls processor ADP.
There was more bad news as the growth for the US services sector unexpectedly fell in July to its lowest level since February 2010.
Even though the US has approved the debt deal, it has not erased the risk of a ratings downgrade and China criticised Congress saying it had not gone far enough in dealing with debt.
Demand for gold as a safe haven – by individual investors and various countries central banks – mean the precious metal continued to hit new record highs.