The oil price looks optimistic. What are the reasons?
Gold stands still as greenback is still backed
On Tuesday, gold didn’t change due to the fact demand for the evergreen buck was mildly underpinned reacting to the previous week's positive employment data. Another reason was that investors waited for the publication of highly-anticipated American inflation data.
Gold futures were nearly intact on the Comex exchange, keeping to $1,320.0 a troy ounce.
As for the major American currency, it initially edged up after on Friday the Labor Department informed that the American economy managed to generate up to 313,000 jobs in February, thus beating experts’ estimates of 200,000. It turned to be the greatest monthly jump in one-and-a-half years.
Aside from that the report also drew attention to the fact that average hourly earnings tacked on by approximately 0.1% the previous month for an annual rate of about 2.6%, heading south from 2.8% in January.
Apparently, the slowdown in wage surge managed to soften worries as for inflationary pressures. Besides this, it suppressed hopes for four rate lifts by the Federal Reserve in 2018.
Traders were eagerly looking forward to viewing the American consumer price inflation report to be unveiled a later in the day. It’s because they’re willing to know whether it confirms the hopes generated by Friday's jobs data or not.
As for the US dollar index, traditionally rating the greenback’s strength versus a trade-weighted basket of six leading currencies, it headed north 0.09% being worth 89.98.
Gold has always demonstrated ultra-sensitivity to any fluctuations in the American dollar as well as US interest rates. A stronger evergreen buck makes the number one precious commodity more expensive for keepers of foreign currency. However, a jump in American rates jumps increased the opportunity cost of keeping non-yielding assets, including bullion.
Silver futures went down 0.19% on the Comex exchange reaching $16.50 a troy ounce.
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.