The oil price looks optimistic. What are the reasons?
Gold demonstrates muted trade
On Tuesday, gold futures showed muted trade because a soar in global stocks compensated a moderately weaker greenback that capped the traditional safe-haven commodity’s moves.
August delivery gold futures soared up to 0.2% being worth $1,227.40 an ounce. September delivery silver futures managed to ascend 0.6% hitting $15.510 an ounce.
Evaluating the US dollar’s purchasing potential against its main rivals, the USD index slumped 0.2% trading at 94.49.
Aside from that SPDR Gold Shares GLD lost about 0.5%, the iShares Silver TrustSLV declined nearly 0.8%.
Both silver and gold have been sliding for the last weeks due to the fact the evergreen buck managed to gain traction.
This year silver has lost 9.5%, while gold has slumped 6.3% in 2018. At the same time, the USD index has managed to rally 2.5% for the first seven months of 2018.
A stronger greenback is capable of making commodities priced in the USD less affordable against those utilizing other monetary units.
Delivering a further headwind for the number one precious commodity on Monday was a leap in the rates of government bonds, in particular in America, with the 10-year Treasury noteTMUBMUSD10Y ascending to 2.963%, thus demonstrating a six-week rate maximum —a move, which is able to reduce some appetite for precious commodities, which don’t offer profits.
As for other metals, they generally ascended. As a matter of fact, September delivery palladium futures rallied about 1.6% coming up with an outcome of $917.60 an ounce. Additionally, October delivery platinum futures tacked on up to 1.5% ending up with $843.30 an ounce. As for September delivery copper futures, they headed north approximately 0.8% trading at $2.768 a pound.
Meanwhile, market participants are waiting for reports on house prices, economic activity, in particular the Markit service purchasing managers and manufacturing indexes.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.