2021-05-06 • Updated
The outlook for the oil market is relatively upbeat at the moment. A month ago, OPEC+ decided to raise the oil supply in view of the recovering demand. A week ago, the cartel reaffirmed that decision keeping the same upbeat projection for the oil market for the rest of the year. As a result, WTI oil rose to challenge the March highs of $68 and looks set to reach $70. If that happens, the zone of six-year highs of $70-76 will be open for bulls.
In the meantime, traders need to be ready to see the oil price bounce downwards from those highs or go sideways. Trading below $70, the WTI oil price is already considerably high against the previously announced observers’ expectations for 2021. The resistance above $70 may prove to be stronger than before as the markets are stabilizing, and the recovery, as dynamic as it is in the US, may not push the oil market forever. Therefore, keep an eye on the key resistance of $70 and watch how the oil price behaves around it. Prepare for all scenarios from sudden plunges to prolonged periods of flat horizontal patterns.
A weekly chart gives a very clear view of the gold price performance. So that, the nine-month downtrend that started at the highs of August above $2,000 hasn’t seen any change. However, the current resistance of $1,800 may be a turning point. If the gold price crosses it, breaks the resistance of the 50-MA, and manages to stay above these marks, it’ll be a trend change. In this case, bulls will claim the right to go for $2,000.
However, is there a fundamental base for such a move? The gold price reached $2,000 because of the devastating effects of the virus and the pessimism that’s been ruling the markets in the first part of 2020. Now, we’re in recovery mode. Although there are many states where the infection rates are rising, the virus is no longer a novelty. Gold needs a more solid reason to set a new record. May it be another global geopolitical crisis? Given the current trends in the relations between the US, Europe, and China, there is a possibility. If things go bad between those countries, gold will definitely reach $2,000.
Earnings season is a crucial time for investors and analysts, as it provides insights into how well companies have performed over the past quarter and gives indications of their future earnings. In 2023, expectations for US Q1 earnings were low due to economic challenges and rising interest rates. Surprisingly, many companies beat these low expectations, with 75% of S&P 500 companies surpassing forecasts.
When I started trading stocks a few years ago, I often needed to pay more attention to my technical analysis skills and trust that the market would play fair according to my analysis. I have since discovered that the safer approach to trading stocks is to, more often than not, seek out investing opportunities - that is, catching stock commodities with a potential to rise.
The S&P 500 had a good week due to the impressive start of Q1 earnings and favorable inflation data. In March, the consumer price index rose 5%, lower than the previous month's 6%, and met economists' expectations.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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