Gold Traders go Long, Over Global Debt and Excessive U.S Dollar Liquidity

Gold traders took off some of their long positions after uploading stacks of stop losses between $ 2045-57. Gold futures price pulled back from its all-time high at $2,057.5 as real yields eventually went upward in a parallel fashion to actual yields; however, the yellow metal’s pullback was temporary.

Gold traders are having a long day, keeping their long bets, as the world’s largest economy is expected soon, in unveiling $1 trillion stimulus packages to help stimulate growth in its fragile economy, amid the resurgence of the COVID-19 pandemic.

The precious metal trade presently looks pretty immune to just about everything, including the potential development of a COVID-19 vaccine, and bullish gains recorded in risky assets like global stocks, even though global investors have no opportunity cost owning the precious metal, except for higher real yields.

Gold bulls are charging at a steady pace, triggered by two vital economic macros that include over-bloated global debt and excessive U.S dollar liquidity finding its way in the world’s financial system.

The global economic damage by the ravaging and deadly COVID-19 virus seems not to be all over, and even with a COVID-19 vaccine, the global economic loss, particularly in the last two quarters of 2020 can’t be replaced.

So it seems reasonable for Gold traders to maintain their bullish bets even as Gold’s bullish rally seems to be suffering from exhaustion above the $2,000 price level.

In addition, Gold bulls are having their best upward run in the precious metal market as favorable fundamentals such as global interest rates remain low with leading global central banks pumping more money to an already bloated financial system via more stimulus packages.

Global bulls are definitely enjoying gold’s record rally, but they might meet some roadblocks ahead, like an impressive U.S job report scheduled for tomorrow.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Traders remain Cautious Despite a Plunge in U.S Crude Oil Stockpiles

The API inventory survey against all odds came in better than most oil traders and energy analysts had anticipated.

The API reported a drop in 8.587 million barrels of crude oil for the period ending July 31. That was far better than the 3.3 million barrel draw forecasted by selected energy analysts.

The size of the recent plunge in U.S oil stockpiles shows there could be enough energy demand to absorb the new increase in crude oil production starting this August by OPEC+.

In addition, Brent crude prices have continued to converge around the $44 per barrel supported by recent positive macros, coming from emerging markets, that showed signs of upward gains in manufacturing and business sentiments across these economies coupled with the recent bullish run at America’s equities market, assuring most oil traders that the worse is definitely over.

These as kept the price of crude ranging between the $40-$45 as oil traders are looking for clear macros about the world’s economic stability.

At one stage, crude oil prices surged to the highest level in nearly two weeks. However geopolitical risks such as the recent massive explosion near Lebanese capital increased fears among oil traders on concerns about Middle east oil supply routes.

Oil traders are indeed in a precarious situation, partly because there is no clear direction on where energy demand will go in the short term, and there are concerns for the medium and long-horizon too.

Although geopolitical uncertainty has now become the new norm, the price of Brent crude is expected to remain above the $40 support level in the next few weeks in spite of the resurgence of the COVID-19 pandemic.

For a look at all of today’s economic events, check out our economic calendar.

Why Gold’s Upward run Is Unlikely to Last Long

Gold traders of late have been keeping some of their bullish bets on, as interest rates continue to be on the lower side and the greenback staying close to its two-year lows.

However, the sudden surge in gold futures prices in these few weeks seems to have suffered exhaustion lately, especially around the $1980 -$1999 levels.

In addition, the precious metal could face strong short-term resistance at $2000 price level, given the growing view that the worst might be over and it’s unlikely for the U.S Federal reserve to want consider negative rates in the mid-term.

Gold bulls might start considering closing some of their long positions especially if the pullback reaches below the $1975 levels.

Making case for the gold bears is the recent upward rally in the greenback tracker, U.S dollar index staying above a critical support level of 93.5, as Dallas Federal Reserve Bank President Robert Kaplan said he would not be in favour of explicitly tying forward guidance inflation.

The yellow metal futures price presently remains around the price bandwidth of $1975-1985.

If the world is able to find a lasting solution before the end of Q3 2020, gold’s futures rally in the mid-term could fade, and drop below the $1,800 price levels. It will also be under downward pressure as global central banks can’t keep printing money, in solving some of the present global economic challenges.

Gold traders from a hedging perspective are more concerned about the level of inflation, not the changes in inflation.

However, from a level perspective, gold traders and global investors are of the opinion that inflation hedges like gold are probably a whole lot cheaper today.

The return of inflation is why the yellow metal is rallying at record levels, after years of sluggish movement in the precious metal market.

For a look at all of today’s economic events, check out our economic calendar.

USD Bears Increase their Bets, on Fragile Economic Macros and Potential Biden Presidency

The US Dollar Index bears increased their stakes the third straight week.

In the short term currency traders are concerned about the latest U.S Federal Reserve statement on the pace of the world’s largest economy and the dirty politics coming to play in the corridors of power at Washington, triggered with heightened geopolitical risks by President Trump’s alleged statement in the form of an election delay.

Such macros give the U.S dollar index little hope to stay above its critical support level of 93.5 where more global investors and currency traders in and accelerating fashion, throw aside the previously established assumption that the US will lead the global economic recovery.

The recent sell-off observed in the U.S dollar Index has reached levels last seen in mid-2018. On the present horizon, currency traders will watch the 93.00 zone cautiously, as any breach could result the greenback tracker to fall around the 91.80 support zone, leaving the negative stance on the dollar intact in the mid-term.

With the US dollar outlook extremely sour, foreign investors seems to move their attention to other safe haven asset options like gold.

Still, currency traders are betting that a continual outburst between the two leading economies, China and the United States, would trigger investors move into the recent forgotten safe haven currency.

Although the market appears to be desensitizing again, one never really feels sure of which US-China political powder keg is about to explode, especially with the US administration considering still naming China a currency manipulator. This macro is expected to reduce the bearish bias of currency traders in the mid-term.

Ultimately, currency traders will take a more strategic tack and soon begin to factor the probability of a return to globalization and a non-tariff approach to trade under a potential Biden Presidency.

Gold Surges pass $1,875, Growing Concerns on Global Geopolitical Risks

Gold futures gained about 0.15% to trade at $1,877.85, 01.01 pm GMT, hitting as high as $1,888 in its intraday trading session

For gold it’s the same old story: Interest rates in emerged market are close to zero and still grinding lower the levels it was during 2008 global financial crisis.

Ultra low-interest rates amid quantitative easing policies boosted the appeal of non-interest-bearing assets like precious metals because they can be used to hedge against inflation. The recent surge in gold has also helped the yellow metal’s holdings in exchange-traded funds to all-time highs.

Gold traders’ latest gas is coming on the basis that the relationship between the world’s biggest economies has worsened, as the U.S State department ordered the closure of China’s consulate in Texas, growing concerns that tension between the U.S and China could escalate further. Global investors dumped a significant amount of shares at Asia’s trading session and flocked to precious metals.

Normally the yellow metal performs well with US-China tension take center stage.

While the precious metal continues to fly higher after recent headlines on global Covid-19 caseloads reached 15 million, gold could hit the $2,000 price level within few weeks, as more stimulus hits global financial markets.

Looking at the price of gold in a cautionary perspective, positive macros coming from COVID-19 vaccines development will most like weaken the rally of gold, driving the price back to 1825 level in the short term. However, with gold presently trading at nine-year highs above $1,875, the bulls seem to have the upper hand.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Traders Go Long, on Weak U.S Dollar, Massive Global Stimulus Packages

This was further strengthened by the continual weakening of the greenback, massive global stimulus packages, amidst rising crude oil inventories.

Brent crude gained 0.45% about to trade at $44.49 a barrel by 8.07 am; also, the West Texas Intermediate gained 0.14%, to $42.11 a barrel.

Usually, when the greenback falls, traders usually go long on global stock markets and commodities in principle.

Noting how quick the crude oil market bounced from its record lows when priced at $16, in April 2020, crude oil traders relatively have been bullish on oil in recent weeks as major oil producers, led by the Saudis and Russians, doing all they can to keep the price of crude stable.

However, the latest data revealed U.S crude stockpiles gained about 4.9 million barrels in the week to July 17 to 536.6 million barrels, compared with expectations in a Reuter’s poll for a 2.1 million-barrel drop. Production increased to 11.1 million bpd, up by 100,000 bpd.

This data above show all is not well yet. It’s wise not to put much importance on a single week’s inventory report as crude oil traders look into the long term horizon.

The high prospect of a solution to curb the pandemic mid-term will keep oil ranging from the $40-$45 levels for Brent crude, as recent economic macros show the worse might be over

With massive stimulus packages and good signs from various Covid-19 vaccines early trial result, crude oil traders, could breach the strong support level of Brent at $45, regardless of OPEC+ easing some curbs on its crude oil output by 2 million barrels per day.

Unprecedented stimulus measures to boost battered economies would continue to provide structural support for riskier assets, said Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore.

For a look at all of today’s economic events, check out our economic calendar.

Gold Traders set their Eyes on $2,000, More Stimulus Packages, U.S Debts, And Inflation Boost Gold

Gold futures were up by 0.80% to $1,859.60 by 12.01pm GMT .Gold is at a nine-year high, rising to points it has not touched since September 2011.

The macros boosting gold traders, in keeping their long positions include the massive stimulus packages coming from emerged markets, a resurgence of the ravaging COVID-19 virus onslaught, and the weakening US dollar.

The bullish run recorded in the gold market is firmly entrenched so its expected, the rally might push gold to hit $2,000 before the end of 2020.

“The fact that governments, central banks and pretty much everyone else are looking to more fiscal and monetary policy inputs is helping drive the yellow metal,” said Michael Hewson, chief market analyst at CMC Markets UK.

Looking into gold’s price levels, gold traders have kept gold’s price above a vital resistance level of $1,850. Although gold bulls appear out of gas when it approached the $1865 level, update on COVID-19 vaccines is likely to make gold traders pull back some of their long positions, and increase their profit taking to the $1,825 support levels.

However, world’s largest economy on Tuesday recorded its highest death toll in 24 hours period since June, thereby giving gold bulls enough gas to push the price beyond the $1,865 levels.

In addition with U.S interest rate at an all-time low, nothing seems to stop the gold bulls, except for the macros in recent days that COVID-19 vaccines are showing promising signs from their early clinical results.

Consequently, as U.S fiscal officials keep negotiations ongoing on quantitative easing. Whatever the result from the meeting will be positive for the yellow metal, as more stimulus packages, will increase government spending, U.S debts, and inflation.(natural catalyst for gold bulls)

It critical to understand that, the correlation between gold and the equities market, have not been following its past historical patterns lately as the yellows metal typically moves in opposite direction from global equity markets, especially the American stock market.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Bulls Pull Back, Build in U.S Crude Oil Inventories

Brent crude dropped about 0.61% to $44.05 by 8.39 am GMT and the West Texas Intermediate also lost about 0.72% to trade at $41.62.

The growing concern among crude oil traders that the energy market seems saturated in the short term got strengthened when American Petroleum Institute disclosed the U.S crude oil inventories increased by 7.544 million barrels for the week.

These surges in U.S crude oil inventories usually keep the pressure on crude oil to fall downward, on the basis that the world’s largest economy might reduce its demand for crude.

Also dampening crude oil bulls was the resurgence of the rampagingCOVID-19 virus in many leading economies, the United States just yesterday recorded over 1,000 deaths for the first time since June within a 24-hour period, and the present amount of fatalities recorded on COVID-19 cases is closing in on 142,000.

In his first COVID-19 update in several weeks, U.S leader Donald Trump disclosed that the pandemic would most likely get worse before it gets better.

The bearish bias on crude oil strengthens on the narrative that stimulus packages by global fiscal authorities cannot soften the present negative macros in the short term as the downside shift in oil demand, with vital economic hubs already in lockdown mode, nor can stimulus packages be used to weaken the virus fear among humans.

While major oil producers have recorded successes in stabilizing the price of crude in the mid-term, the pace of crude oil price improvement in the face of the resurging virus onslaught strengthens demand risks, thereby making crude oil bulls to maintain a wait and see attitude.

Gold Price Hits Nine-Year High, Despite Macros on COVID-19 Vaccine

The debate over a further round of economic stimulus measures is currently underway in the U.S. legislative chambers with some earlier measures expiring at the end of this month.

This is coming on the sentiments that, European Fiscal officials have tentatively reached an agreement on a EUR750 billion stimulus package recently.

The yellow metal gained about 0.12% to trade $1,828.55 by 12:51 PM GMT, staying above the strong support level of the $, 1800 mark. Gold bulls kept it upward momentum on, from the previous trading session, reaching price levels not seen since September 2011.

Gold prices recorded a nine-year with the dollar weakening on reports of further stimulus from the U.S Fiscal officials thereby triggering the gold bulls to keep soaring high.

However, Leading British drug-maker AstraZeneca and Oxford University disclosed yesterday that its COVID-19 vaccine induced an immune response in a test study conducted during the early stages of its clinical trials.

Two other potential COVID-19 vaccines, developed by Cansino Biologics alongside China’s military establishment and German drug-maker Biotech alongside U.S. drug-maker Pfizer also revealed positive results in its early stages of the test.

In spite of these positive macros, global investors continue to pile into the yellow metal with growing concerns on massive stimulus packages ,particularly in the emerged market, continual weakening of the greenback and a prolonged period of very interest rates.

In addition, the ravaging COVID-19 virus resurgence hitting records high, with over 14.6 million caseloads worldwide as of July 21, as help gold traders to take long positions.

With all these fundamental parameters stated above, the yellow metal bulls seem to have enough gas within,in taking the price beyond the $1,850 level in the coming days.

Crude Oil Stays Above Key Support Level, Crude Oil Traders take Long Positions

Just recently an experimental COVID-19 vaccine developed by a leading drug maker AstraZeneca and Oxford University showed results of being safe, producing an immune response to the deadly viral disease in the first phase of its clinical trials.

The hopes that such COVID-19 vaccines could be ready before the end of Q4, 2020 triggered crude oil traders in placing bullish bets on crude oil.

Brent crude futures were gained 1.46%, at trade at $43.91 by 9.45 am GMT, while West Texas Intermediate rose 0.91% to trade at $41.81.

However crude traders remained overlying cautious as the caseloads on COVID-19 reached record highs, with the fact that some fiscal officials placed restrictions in certain global economic hubs, witnessed in regions like Los Angeles, Chicago coupled with OPEC+ plans to go ahead with next month plan to lift some curbs placed on crude oil output.

Consequently, crude oil prices are trading relatively high as bullish market aspirations seem to be capped by growing concerns about COVID-19 impact on the world’s economy and energy demand in particular.

The world’s energy markets do not have the luxury to watch the rampaging virus resurgence disrupt global economic systems, based on the bias that the world’s economy seems to be on a fragile standing, however, positive news coming from the development of COVID-19 vaccines or any soft landing measures by fiscal authorities would keep the price of Brent crude above its strong support price level around $40 in the short term.

Greenback Bulls await Clear Signals from America’s Congress

The American Congress is expected this week, to debate on current economic stimulus due to expire at the end of this month. But with strong opposition from America’s major political parties over the amount of stimulus needed to savage America’s economy resulting the greenback losing all it gains recorded on Asia’s trading session.

The U.S dollar index that gauges the greenback against a basket of major currencies initially gained 0.23% to trade at 96.112 5.01 AM GMT, before losing 0.12% to trade at 95.778 10.03 AM GMT.

The continuous resurgence in of COVID-19 pandemic globally, particularly in emerged markets with recent news of a potential vaccine that has already gotten passed its first trial phase plus the gradual reopening of global economies as kept many currency traders on looking for clear signals thereby keeping the safe-haven currency under intense pressure.

Taking a bullish look at the U.S dollar, it’s highly anticipated that many currency traders preference for the U.S dollar as a safe haven asset will keep the U.S dollar index above critical support levels at around 95.50-95.75 taking note of global currency traders’ sentiment surrounding its global status of being the world’s safe-haven asset and store of value.

“There are technical indications that the U.S. dollar could strengthen and that might be why we are seeing traders in the gold market taking the lid off the price at the moment,” said Michael McCarthy, chief strategist at CMC Markets.

On the bias side of global investors, a high level of caution prevail on the U.S dollar as many investors flock into a riskier financial assets with much global stock’s valuations reaching record highs, coupled with the high turnout of stimulus anticipated by the U.S Federal Reserve will keep the dollar ranging around the 95.25 to 97.80 in the mid-term.

Crude Oil Traders Look to China

The Saudis led a strong compliance effort in making the OPEC+ agreement successful, especially in the month of May and June helping the price of crude to more than double, since its historical lows of about $16 in early April.

The bullish bias among a significant amount of crude oil traders got thwarted recently by the upsurge in Covid-19 cases, as concerns strengthened that economic restrictions might resume, and air travel a strong proponent of crude oil consumption might be curbed to restrict human activities.

Some crude oil traders are still having a strong bullish bias view on oil as energy demand picks up again globally.

Recent data from the world’s second-largest economy, showed its imports on crude oil recorded lower figures in the month of June, coupled with the fact that crude oil traders in major energy hubs around the world reported recently on China’s downward appetite for crude oil weakening in recent weeks.

Customs data from 27 oil major producers revealed, that the crude oil exporters loaded ~2.55 million barrels a day, or 22%, less of crude headed to China during the month of May.

However positive macros coming from the world’s second-largest economy came from its recent released Q2, 2020 GDP, which was far more impressive than anticipated, showing a favorable global economic outlook remained intact despite the recent growing concerns of the rampaging virus

This positive news will help in the mid-term alleviate growing concerns among global energy traders, on the basis that despite increased virus fears the worst seems over and energy demand won’t fall to such levels as recorded in the month of March and April.

For a look at all of today’s economic events, check out our economic calendar.

Gold Looks Set To Keep Its Shine, Rampaging Virus Shows No Retreat

Just yesterday the world’s largest economy death toll from COVID-19 related cases exceeded 140,000 as caseloads continued to climb in 43 out of 50 states over the past several days.

Since the beginning of June, Americans have witnessed a resurgence in new COVID-19 cases and now, about six weeks later, the death toll has been on record highs.

Americans are losing about five thousand individuals to the deadly virus every week. While its neighbor Canada has reported a total death toll of about nine thousand since the rampaging virus began its onslaught on global economies.

The yellow metal’s bullish momentum has been fueled recently by gold traders and global investors expecting monetary and fiscal stakeholders to start a new round of stimulus packages around major emerging and emerging markets.

The real-time barometer for bullion prices Spot gold, gained 0.8%, to close the week at $1,812.

The breakout for the spot yellow metal is around the strong resistance level of $1,812 as gold traders set their eyes on the $1825 levels on the mid-term with the rampaging virus distorting economic activities, if the caseloads, especially in the world’s largest economy, do not recede, Gold bulls may extend the price to $1,850 level.

However if macros, especially the potential COVID-19 vaccine produce more exciting news in the coming days, gold could witness a breakdown of its support level around the $1,785-$1790 range, which could push the price as low at $1,735 price level.

New stimulus packages around the world from global central banks in protecting global economies from the fallout of the COVID-19 pandemic, will continue to keep the safe-haven asset above the $1,800 levels.

 

Gold Stays Above the $1800 Level amid a Potential COVID-19 Vaccine

The world’s most popular precious metal soared higher at London’s trading session on Friday after an earlier pulled back the below the $1,800/oz levels as uncertainty over the world’s economy strengthened with COVID-19 cases soaring higher.

Gold traders’ earlier bearish sentiments, particularly at Asia’s trading session on Friday, came from European central banks recent calls, signaling that it may leave interest rates and stimulus unchanged in the short term.

European Central Bank President, Christine Lagarde, said at the ECB Governing Council meeting earlier this week that the European Central Bank sees monetary stimulus in Europe to be necessary for the short term fueling investor risk appetite in lieu of gold traders pulling back some of their long positions in the precious metal.

The short term threats to gold bulls remain the potential development of the COVID-19 vaccine, after it passed its first phase, triggering investors to limit their rush for safe-haven assets.

However recent statements from U.S Fed officials will certainly imply ongoing accommodative policies are on the table. Even though it seems inflation could likely rise, with global central banks printing money at a record high, the Feds will continue to be dovish in its approach, as calls for more stimulus packages certainly remain supportive for goldin the long term, going forward from am investors perspective.

In addition the, geopolitical tensions in the world’s largest economy continue to weigh on sentiment, as gold traders begin to factor a Biden presidency.

Gold prices are steadily rising as investors start to raise their stimulus expectations on coronavirus second wave fears,” said Edward Moya, senior market analyst at Oanda, in a note. “Gold is also starting to benefit from election risk, as Wall Street can’t ignore the polls anymore and is starting to price in the risk of a Biden presidency,

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Traders await Clearer Signals, amid Ravaging Virus

Crude oil prices dropped on Friday, in London’s trading session as oil traders’ uncertainty strengthened on global recovery in energy demand as new COVID-19 cases rise in major global economies coupled with major producers getting set to ease oil production curbs from the month of August.

“Although oil prices have stalled, the buffet is gentle and not a prelude to an incipient spin lower,” said Jeffrey Halley, market analyst at OANDA, adding that both contracts are ranging at the upper end of their recent price levels.

Heightening concerns about the rampaging COVID-19 virus on the world’s economic productivity and an improved rebound in America’s oil production limits the bullish momentum among oil traders.

In the short term at the global energy market, some oil traders are still on the sidelines, waiting for clearer signals, especially on the macros surrounding the COVID-19 pandemic but oil traders remain optimistic in the mid and long term as demand recovers relatively.

The rampaging COVID-19 virus on America’s economic hubs is causing slower rebalancing in specific oil product segments, notably aviation fuel, meaning the second stage of the energy market rebalancing will take time.

Brent crude market has been on a tight trading range for several days, despite many strong fundamental factors that have historically influenced energy markets, meaning Brent crude could continue to pull back from the $45 strong resistance level.

While the near-term pricing on volatility on crude oil remains, the overwhelming proof in the energy markets suggests crude oil is past the record price plunge that occurred in late March, coupled with the sentiments that supply and demand are rebalancing.

OPEC’s Ease on Oil Production Cuts Reflects Improving Global Demand

Many oil traders believed that the previous OPEC+ agreement would be extended because crude oil prices more than doubled its prices since April when crude oil traded around $16 through historical output cuts.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies had agreed yesterday in increasing crude oil supply starting from August, as demand continues to rise to pre-pandemic levels.

The present narrative by OPEC to ease oil production cuts reflects improving global demand and should be fundamentally bullish for oil on the margins.

Things are getting back to normal on the oil market,” said Norbert Rücker, head of economics research at Julius Baer.

“The petro-nations announced the partial lifting of their production restrictions as oil demand rebounds and signs of an easing supply glut emerge… The economic recovery puts demand above supply.”

OPEC+ agreed to reduce their daily production cut from 9.6 million barrels a day to 7.7 million barrels a day from the month of August. The reduction in cuts was backed by both Saudi Arabia and Russia, including other participating oil ministers in the virtual conference.

It should also be noted that full compliance with the present agreement is more critical than ever given the resurgence of COVID -19 cases and the constant monitoring of crude oil inventories by oil traders for future guidance.

In addition, given the production taper was far from a tantrum, it gives energy markets some breathing room to catch up with other risk assets that have been reveling in the China reflation trade.

However, despite the surge in COVID-19 cases in the world’s largest economy and upward restrictions recorded in some in of its regions US energy demand recovery continues to gain momentum.

Greenback Drops Lower, Investors Pullback amid Surging COVID-19 Cases

Optimism concerning the COVID-19 vaccine progress has helped many currency traders and global investors dump safe-haven assets amid US-China tensions and rising virus cases seem to have little effect on dampening the mood for now.

The U.S dollar index that monitors the greenback against a bouquet of other currencies lost about 0.42% to 95.805 by 01.39 GMT.

The U.S dollar fall could also be attributed to investors continuing the previous session’s pullback from the U.S dollar as data recently released showed an increased U.S. inflation.

On the flip side, the Euro has been gaining grounds despite not seeing a sharp a jump in business confidence survey. However, the surge in the Euro could be contributed to the fact that the Europeans have controlled the virus spread better than the Americans,

“Germany, France, and Italy have all taken severe lockdown steps and as a result, the coronavirus now appears to be under control. The economy could be gradually recovering,” said Bart Wakabayashi, Tokyo Branch Manager of State Street Bank and Trust.

A U.S Federal Reserve Official went further endorsing yield-curve control, which would set the greenback up for a broad-based weakness and while boosting the price of gold upward.

The market is pricing low rates for longer in US rates front end. In addition to QE, the Fed could use yield curve control, focusing on 3y tenor, which is holding nominal and real returns down in any case.

However, the U.S dollar could reverse the downward momentum if positive macros such as a much better-than-expected high-frequency US leading businesses but given the recent upside in COVID-19 cases, many currency traders would remain on d sideline, based on strengthened geopolitical uncertainty.

For a look at all of today’s economic events, check out our economic calendar.

Gold Keeps Shining, Growing Concerns for Financial Asset Bubble

Economic macros that include The US CPI index used to gauge inflation rise, was good for gold, and the recent weakening of the greenback amid calls by a U.S Fed Reserve official on more stimulus triggered the gold bulls.

“Sideways price move for the last few days has resulted in day traders booking profit on [a] rise,” said Chintan Karnani, chief market analyst at Insignia Consultants.

The precious metal’s market had relatively been bullish as the rampaging virus, as the pandemic halted economic activities in many leading economies.

However the recent news on a positive vaccine trial by a leading U.S drug maker took some of the shine off the precious metal.

Still, as cheap money abound globally, triggered by the global central banks enormous stimulus packages it’s most likely that the world will face a wave of asset bubble on some financial assets coupled with price inflation on leading fiat currencies.

Even if the global economy returns to pre- COVID-19 pandemic levels, and all economic systems normalize, with the help of a COVID-19 vaccine, it would be very difficult for economic stake holders to deflate the massive global stimulus finding its way into every liquid financial assets.

In addition the outlook for gold on the mid and long term seems bullish for gold ,on top of the big sized stimulus already injected into the global economy coupled with U.S Federal Reserve Bank leaving interest rate at zero for the short and mid-term, it becomes very difficult not to view a tsunami of asset price inflation on many global financial assets.

For a look at all of today’s economic events, check out our economic calendar.

China’s Record Oil Import, OPEC’s Plan to Boost Crude Oil Production

Data from the General Administration of Customs showed China’s June imports reached about 12.9 million barrels per day the surpassing a previous record of 11.3 million barrels per day for the month of May

However, OPEC+ a group comprising of major oil producers around the world, recently felt the need to raise crude oil production after successfully doubling the price of crude prices over the last several weeks, through historical output cuts.

The OPEC+ alliance led by the Saudis and Russians plan to normalize their crude oil production, based on the bias that fuel demand is recovering with the ease of COVID-19 lockdowns globally, especially in major global economies, coupled with the resumption of air travels around major global airports.

According to private sources within the oil cartel group, OPEC and its allies are scheduled to meet online on Wednesday, to deliberate on the group’s present and future production, which include plans to resume about 2 million barrels per day in crude oil production following the historical cuts that occurred in the month of April that saw the Saudis rallying other oil major powers in pushing for a 9.7 million barrels per day oil production cut as the rampaging virus led to a collapse of energy demand.

In addition, The IMF in a statement yesterday disclosed about the Middle East crude oil exporters, which form the heartbeat of OPEC, are in for more strains on their economic growth for 2020, revising downward its estimate of economic growth to -7.3%. It said its forecast reflects the “‘double whammy’ from oil price fluctuations (and supply cuts) and the pandemic-linked lockdowns.”

Gold Prices Could hit $1900, Solid Macros from China Help’s Yellow Metal’s Upside

Gold attracted the attention of most global investors lately because it acts as a safe investment in times of geopolitical uncertainty. Physical gold at the time this report was drafted was trading at $1,808 per ounce, as the safe-haven bullion tracker gained 0.52%.

The world’s largest consumer for spot gold (China) lately have been outperforming the world’s largest economy (U.S) at the macro level, thereby boosting the purchasing power of many Chinese gold consumers into buying more physical gold, and such bullish run could see gold hitting above the $1,900 per ounce level before the end of Q3, 2020.

“The uncertainty related to the continued increase in the virus count is adding some underlying support to the market…There’s absolutely no reason not to hold on to long positions for at least as long as we stay above the $1,765 area,” said Saxo Bank analyst Ole Hansen.

In addition, gold traders have been piling into safe assets as they observe COVID-19 pandemic resurgence accelerating in major global economies.

US-China rising tensions had supported the price of gold staying above the $1800 level helping the yellow metal rise significantly.

Just recently President Donald Trump stated that he was not thinking of negotiating with the Sino leadership on a “Phase 2” trade.

The U.S President also added that the relations between the U.S and China had deteriorated due to the COVID-19 pandemic and many other economic issues such as trade.

Meanwhile, the Gold spot price is presently trading above the $1,800 support levels despite the rally in global stocks lately. This affirms gold traders and investors’ huge appetite for the precious metal as the market remains in a parabolic phase.

For a look at all of today’s economic events, check out our economic calendar.