The oil price looks optimistic. What are the reasons?
Gold rebounds from 5-week maximums as trade tensions relieve
On Monday, gold headed south, drifting away from five-week maximums after news that China and America had started talks over soaring trade tensions relieved worries over a probable all-out trade conflict.
April delivery gold futures dived 0.33% on the Comex exchange in New York being worth $1,345.4 a troy ounce.
On Friday, gold prices tacked on to a five-week maximum of $1350.40 because a weaker evergreen buck along with growing trade tensions spurred demand for the number one precious commodity.
On Monday, the Wall Street Journal informed that Beijing and Washington were discussing a possibility to improve American access to China’s markets following a week of threats to make use of trade duties.
Recent concerns that protectionist trade policies from China and the United States would result in a trade conflict have underpinned gold in the face of worries over the impact on global economic surge.
The report also revealed that the safe haven yen rebounded from 16-month maximums versus the evergreen buck and American stock futures rebounded too because investor sentiment revived.
The US dollar index, rating the greenback’s actual strength versus a basket of six leading currencies, headed south 0.15% hitting a near one-month minimum of 88.97.
Market participants cling to gold as a good store of value in times of market turmoil or geopolitical uncertainty, while a weaker greenback makes the US dollar-denominated metal more affordable for buyers of other currencies.
As for other precious metals, silver futures inched down 0.16% showing a result of $16.555 per troy ounce, while platinum futures were intact, sticking to $954.9.
As for base commodities, copper futures slumped 1.44 % hitting $2.950 a pound. As a matter of fact, recent trade fears have put pressure on prices to their weakest value since December after they reached an almost four-year maximum in 2017.
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!