2020-07-20 • Updated
Since July 8, the gold price has been in a clear sideways channel best visible at the hourly chart. $1 813 serves as the channels’ resistance, and $1 795 - as the support. In broader terms, it will be enough to specify that gold price fluctuates between “roughly below $1 800” and “slightly above $1 810”.
Currently, it is at the upper border of the channel and gives initial signs of a bearish reversal. Nevertheless, we don’t have enough signs so far to be more confident in this reversal, therefore more time is required to verify this assumption. That’s why the suggested strategy is to wait and watch closely how the price behaves in the coming hours/tomorrow around the resistance of $1 813. In any case, keep in mind – this sideways movement will not take long to convert into another bullish advance.
Last week, we noted how tangled the world economic recovery is now, and how that pushes the price of gold higher. Today, even with the European leaders discussing the financial aid measures and brings more hopes to the market, we still have the strategic layout unchanged.
Fundamentally, we have a very bumpy global economic recovery, clouded by resurging virus infections, still on fire in the US. In addition to that, international relations do not make it any better: US-China, US-EU, Australia-China, UK-EU – all of these are importing more tension into the market, and gold rises.
It took approximately one month for the gold price to leave $1 700 below and come to $1 800. With the cloudy economic future of the world, we should see $1 900 by the end of August. That means, in 4-5 weeks we will behold the nine-year-old all-time high beaten and surpassed.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
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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