Menu

Daily market commentary: The demonstrations in Washington had little impact on the oil price



GOLD

The decline of gold seen in the last few days is linked with the clear risk on scenario which is dominating markets. Moreover, the Democrats’ success in Georgia should make it easier for Joe Biden to put his agenda in place and initiate more fiscal stimulus. Investors reacted by betting on more riskier assets than gold and the price declined to $1,900 before the riots in Washington generated a recovery to $1,930. The situation seems to be calming down, but of course if this is seen as a major risk for the dollar, the consequences on markets would be much bigger and gold could find further fuel to continue its recovery.

Carlo Alberto De Casa – Chief analyst, ActivTrades

daily market analysis

OIL 

The demonstrations seen in Washington had little impact on the oil price, generating a quick fall to $49.50 for the WTI benchmark, which was easily absorbed by the markets. The price has since jumped strongly back above $50 and in the first few hours this morning continued the recovery, reaching $51 while Brent is approaching the $55 threshold. This sharp spike for oil is supported by the strong risk on scenario which has dominated markets in the last few days. Investors are betting on further price gains thanks to both a recovery of global oil demand in Q1 and Q2 2021 and to the production cuts decided by Saudi Arabia after the meeting of OPEC+. Moreover, news of the victory of Joe Biden in Georgia – which will give him the control of the Senate – strengthens expectations for further fiscal stimulus.

Carlo Alberto De Casa – Chief analyst, ActivTrades


Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.

Related News

Daily market commentary: The demonstrations in Washington had little impact on the oil price

0
Send this to a friend