The oil price looks optimistic. What are the reasons?
Gold extends revenues on weaker greenback
On Tuesday, gold managed to extend revenues because the US currency slumped in the face of soaring uncertainty over potential American duties on aluminum and steel imports.
Gold futures soared 0.81% on the Comex exchange being worth $1,333.6 a troy ounce.
Market participants were still shy because Donald Trump found himself under soaring pressure to cancel his newly-imposed steel as well as aluminum tariffs.
The US President reacted by simply ramping up pressure on Canada and Mexico. Donald Trump stressed that he would have duties on steel imports removed if they agreed to sign a new variant of the North American Free Trade Agreement.
Disclosed the previous week, the duties had generated worries as for a potential trade clash, which would have a downbeat impact on the American economy.
Appreciating the greenback’s value versus a group of crucial currencies, the US dollar index headed 0.41% being worth 89.58, which is the lowest outcome since February 26.
Gold’s sensitivity to shifts in both American rates and the US currency has long been known. A weaker US currency makes gold more affordable for keepers of foreign currency. On the contrary a jump in American rates steps up the opportunity cost of holding non-yielding stuff such as bullion.
Financial markets were jittery too amid worries over Sunday’s quite uncertain Italian election outcomes.
With no party grasping an outright majority, Italy will most probably jump with both feet into a period of political uncertainty that could affect progress on economic reforms in the euro zone’s number three economy.
In addition to this, on Tuesday, North Korea told that it was open to negotiations with the United States as for denuclearization and improving ties.
As for other precious commodities, silver futures rallied 1.33% on the Comex reaching $16.64 a troy ounce.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!