The oil price looks optimistic. What are the reasons?
Gold reaches 2-week maximum as hawkish Fed worries recede
On Thursday, gold approached their highest values for two weeks in midday trade right after a less hawkish than anticipated expected Fed stance and soaring worries over trade duties.
April delivery gold futures rallied 0.49% being worth $1,328.00 a troy ounce.
On Thursday, the number one precious commodity traded higher right after the key US financial institution had interest rates lifted the day before, although stuck to its projection for two more lifts in 2018.
Some market participants had expected the US major financial intuition to project up to three more rate lifts in 2018, therefore the decision to stick with its prediction for two extra lifts was considered to be less hawkish than anticipated.
Hopes for a slower tempo of rate lifts tend to purchase the number one commodity that struggles to compete with so-called yield bearing assets each time interest rates go up.
Prices of the most popular precious metal obtained an extra boost from ramped up safe haven demand in the face of ascending worries over the prospect of a US-led trade conflict.
The US President Donald Trump was supposed to uncover about $60 billion in fresh outrageous duties on Chinese imports. The current presidential administration unexpectedly imposed duties on American steel as well as aluminum imports a bit earlier in March.
Market participants really worry that key American trade partners could try to repel Trump’s outrageous protectionist attack by means of similar moves. Unfortunately, such a tough situation threatens the outlook for the overall global surge.
In addition to this, silver headed south 0.21% coming up with $16.385 a troy ounce. Besides this platinum sank 1.01% getting to $948.10 a troy ounce. As for palladium, this commodity dived 1.32% ending up with $971.75 a troy ounce, copper decreased 2.14% hitting $3.014 a pound.
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.