The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
Gold keeps rallying amid weak dollar
2020-10-05 • Updated
The yellow metal is boosted by the poor performance of the USD. What is the forecast?
On Friday, US President Donald Trump announced that he had been positively tested on Covid-19. As a result, the market sentiment deteriorated immediately. Then, the downbeat NFP came out, driving safe-haven currencies to the upside, especially the Japanese yen and the US dollar.
However, today investors have been encouraged by optimistic comments on Trump’s recovery, their confidence strengthened. Consequently, the greenback waned and gold rose. Indeed, the main driver of XAU/USD is the dollar, which is quite volatile amid upcoming presidential elections, which are scheduled for November 3. Besides, continuing fiscal stimulus talks weigh on the market sentiment. Republicans argue for $1.5 trillion, while Democrats insist on $2.2 trillion.
“There is need for new stimulus measures to rally (gold) prices. Without this mojo, there are signs of fatigue creeping into precious metals,” according to Phillip Futures.
Gold has approached a key resistance of $ 1910. This level was acting as strong support since August, but now it plays a role of resistance. If it manages to break it, the doors towards the upper trendline at $1 920 will be open. The way above $1 920 will confirm further bullish momentum and drive the yellow metal upwards to a high of early August at $1 940. On the flip side, if it falls below the key psychological mark of $1 900, the way to September’s dips of $1 850 will be clear.
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
What is going on with this energy asset these days, and should we prepare for further falls?
In the middle of September 2022, the Canadian dollar has fallen to a 2-year low against the USD
The US dollar index has all chances of reaching the 2000s high of 120.00.
The Consumer Price Index announcement by Statistics Canada is set for release in a few hours will reveal the state of inflation in the Canadian economy