The oil price looks optimistic. What are the reasons?
Gold inches down against the backdrop of soaring futures on the American stock market
On Monday, gold headed south against the backdrop of strengthening futures on the American stock markets as well as a soaring greenback, which led to a decrease in demand for the number one precious commodity. Apparently, gold dived notwithstanding the ascending tension in the trade dispute between China and the United States.
June delivery gold futures slumped 0.24% on the Comex coming up with $1,330.0 per troy ounce.
Judging by the dynamics of futures, on Monday the American stock market will start higher after a large-scale sale on Friday, when the prospect of a possible trade war frightened investors.
Soaring chances that protectionist policies can provoke a fierce trade war have increased fears about the surge of the global economy as well as the American economy. However, market participants hope that the negotiations between the countries will eventually end up with reaching a compromise.
On Friday, China announced its firm readiness for a decisive response if the Trump administration proceeds with its threat of imposing duties worth $100 billion on imports of Chinese goods.
Investor sentiment improved after reports that North Korea first reported to the United States that it was ready to discuss nuclear disarmament if the leaders of the two countries meet.
The US dollar index, displaying the purchasing power of the American currency to the group of six main counterparts, tacked on 0.1% coming up with 89.92.
With the surge of the US currency, gold, which is traded in it, becomes more costly for keepers of other assets.
The US dollar exchange rate generally neglected reports of a probable American attack on the main Syrian air base. The US authorities denied any air strikes against Syria.
Copper futures climbed up 0.28% being worth $3.077 a pound.
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.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.