Gold Prices Under Pressure, On U.S Dollar Bouncing Up

Gold bears couldn’t breach the $1,932 price support level, at the time this report was written, but odds on the yellow metal further weakening towards the $1,900 critical support level is relatively high as the U.S dollar of late has been bouncing up strongly from its two year low.

In addition, Gold traders are aware that the bull’s strength past the $1,993 seems to be out of gas. It’s most unlikely that gold prices would breach its record high again around $2,075 in the mid-term.

A stronger greenback usually put pressure on the yellow metal. That said, the U.S dollar index, which tracks the dollar’s performance against a basket of major currencies, rose to close to 93, making the yellow metal more expensive for holders of other major currencies.

Also, a vital macro curbing the yellow metal prices of late is the persistent surge in the US and global equity markets amid hopes of economic recovery is negative for the precious metal.

Traders are now fixing their attention on today’s initial US jobless claims report and Friday’s non-farm payroll data. These will help traders gauge the economic strength of the world’s largest economy, meaning a strong positive data report could send the price of gold tanking below the $1,900 price support level.

Gold traders and global Investors have piled into the safe-haven asset, pushing the price up by 30% this year, triggered on growing concerns that massive stimulus packages released globally would curb the negative disruption of the COVID-19 pandemic and push inflation relatively higher.

However the relatively bearish seasonality for the yellow metal in the month of September also seems to be in play as gold prices drift lower, which is now getting compounded by reduced buying interest over in recent days.

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

Crude Oil Prices Likely to Remain Positive in the Long Term on Supply/Demand Dynamics

In addition, another impressive data report pushing Brent crude prices above $45 a barrel is the recent better-than-expected American manufacturing activity data released on Tuesday.

August’s Manufacturing Purchasing Managers Index (PMI) spiked to 56, beating July’s reading of 54.2 and the 54.5 forecasts. An increase in new orders boosted the index surge to its highest point in more than a year.

However, the odds for a pullback in oil prices are relatively high as for obvious reasons crude oil bulls seem to be out of steam coupled with the US dollar bouncing up from its two years low.

Crude oil traders see a short-term pullback, as a buying opportunity on the bias that crude oil prices are likely to print higher, and in the case for Brent crude, it may ultimately surge towards the $49 per barrel price level.

However, traders are aware that for such to happen, the COVID-19 caseloads must reduce and the rising tension between the U.S and China subdue.

On the supply/demand dynamics Brent crude is likely to remain positive in the mid-term and long-term supply and demand trends suggesting that Brent crude is most likely to remain above the $43.50 price level in the near term.

But with the COVID-19 vaccine at least months away from hitting the market coupled with low volatility conditions in the present fragile energy market, bulls are out of gas carving out a new higher range above the $46.50 per barrel price level.

Also, oil traders are not in a hurry in taking more bullish bets on the basis that crude oil volatility in recent times has been squeezed and the market is very tight range.

Crude Oil Prices in a Range-Bound Market

The world’s second-largest economy had in recent times been the most critical pillars in the ongoing recovery in the present fragile energy markets, especially as the largest consumer of oil (United States) is still battling it out on stopping the negative demand status quo induced from the rising COVID-19 caseloads.

Despite a recent impressive data report coming from China’s manufacturing sector, the second-largest economy imports for this month are expected to drop for the first time in five months as Chinese oil buyers struggle to keep their stockpiles.

This macro stated above, gave Brent Crude bulls little or no gas in breaching the important resistance at $46.50 as risks now move to the downside this week (although we are still in a range-bound market).

A break below $45 price level would likely give crude oil bears enough strength, to increase pressure on the downside targeting the $40-$42.50 support area. Brent Crude oil pulling back recently from the $46 price level is obviously negative for crude oil this week, thereby increasing the odds that crude oil prices might finish this week lower, as the prevailing macros seem not to support the black liquid hydrocarbon.

Although China seems eager to buy crude oil at present price levels, the second-largest economy have no place to store them. As a result of these most crude oil traders expect Saudi Aramco to curb its oil production on the Asian grade type.

As always, the focus for many crude oil traders and major energy stakeholders remain on the near-term growth of the global economy and the supply/demand re-balancing of crude oil prices.

Risks in the short term remain skewed to the downward trend; as rising supply from major oil producers and the recent rise in COVID-19 caseloads, continue to cap the bullish run on crude oil prices.

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

Crude Oil Prices Rally Up in Spite of Low Volatility

Crude oil traders have been able to keep its bullish run. However it seems to be out of gas when approaching the $46 price levels as its price peaked at $46.23 a barrel on Aug. 5, the highest level since March 2020.

Crude oil prices continue to be range-bound making Crude oil traders more cautious in taking more bullish positions, as the major headlines which include the resurgence of COVID-19 and high geopolitical uncertainty draw down the present fragile energy demand in play.

Crude oil traders remain snared between the often shifting short-term health risk triggered oscillations and more bullish longer-term dynamics.

Although a weaker greenback in prospect, keep the outlook for oil prices increasingly positive, supported by a procession of improving economic data coming from emerged markets line U.S and China.

Crude oil volatility is still likely to remain in the near time, as crude oil bulls don’t have enough gas to breach the present critical resistance level in the short term.

As always, the focus remains on the short term rebalancing of energy demand as the supply/demand dynamic remains a critical concern among major energy players.

This concern puts the price of crude oil skewed to the downside, given that rising supply and demand uncertainty seems to keep crude oil prices capped.

However renewed hopes on COVID-19 vaccine, an impressive economic data from major financial markets, and the “back to school” scheduled to start next month, gives a strong case for crude oil bulls in the medium and longer-term outlook pointing to a tightening market and higher oil prices.

Crude Oil Bulls Out of Gas, In Spite of Present Prevailing Macros

Crude oil prices remained relatively unchanged at Asia’s trading session.

This calm volatility in the energy market was triggered as hurricane Laura raced past major oil installations in Louisiana and Texas without causing any serious damage, making crude oil prices unable to breakout from its present price range.

Crude oil bulls in the past few weeks have been roaring hard to push the price of the black hydrocarbon upward following yet another upside rejection from the $46 price resistance level.

Taking a deeper look at Brent crude price pattern reveals that despite the lack of the present upside momentum, crude oil bulls still remain in control as the energy derivative trades above the $44 level in the near term.

Brent crude Bulls remains resilient towards the $43.50-$44.5 support price level, however, price action remains weak above the $45 price level.

In addition, Hurricane storm surprisingly couldn’t damage America’s offshore oil production infrastructure, which said, it’s not shocking to see crude oil recent bullish run tamed even after the hurricane storm damage assessment continues.

Also, it should also be noted that while the Energy Information Administration recently reported an upsurge in both oil and gasoline stockpiles at the world’s largest economy, the recent weakness in the greenback, and the likely resumption of educational activities, next month is expected to keep crude oil price above its present levels in the mid-term.

Crude Traders, however continue to be wary whenever the energy derivative tries to breakout higher, on the bearish bias that, the northern hemisphere is moving closer to winter, which could trigger an upsurge in viral infections and slow down energy demand rebalancing.

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

Crude Oil Traders Await Clearer Signals, in Spite of Hurricane Laura

Brent crude prices are presently trading above $46 after it recently touched a new five-month high.

The black liquid hydrocarbon has not been able to fully breakout from its present resistance level, showing that it’s most likely that Brent crude could pull back to the $45 price support level if the impact of the hurricane storm is less damaging than anticipated.

The present price level will prove to be critical as a strong breakout above this price level could potentially push the hydrocarbon within the $50 mark.

The recent storm threat has affected the energy market less than expected as crude oil stockpiles remain on the upside due to the COVID-19 pandemic’s hit on energy demand, and growing uncertainty over the pace of the global economic growth.

However, crude oil bulls have been to keep the price of Brent crude up by almost $2/barrel this week, breaching the $46 price level helped by suspension in oil production around the Gulf of Mexico as Hurricane Laura passes through and now threatens oil refineries at that area.

Crude oil prices continue to trade around the $44-$46 range, as crude oil traders remain relatively cautious over growing concerns on energy demand rebalancing as the COVID-19 pandemic continue to disrupt the global economy negatively.

In addition, it should be noted that this abiotic factor has been bullish for the energy derivative. The recent crude oil prices seem to be choppy above the $46 price level as crude oil traders await stronger macros suggesting traders remain nervous.

Possibly profit-taking could also keep the price of Brent crude around the $44-$45 range in the near time as traders anticipate the gradual return of offshore production in the Gulf of Mexico meaning a bearish bias for crude oil prices in the near term.

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

Gold Traders Bet Long Despite Record Highs in Global Stocks

Gold prices reached as high as $1,950 an ounce, at London’s trading session on Wednesday as gold traders created fresh positions on the precious metal.

At previous trading session, Gold prices drifted lower on higher U.S yields amid COVID- 19 vaccine optimism, and positive macros coming from the US-China trade front however that changed when gold bulls triggered the upward movement of the yellow metal prices on growing geopolitical concerns

Gold traders are presently looking toward the U.S Federal Reserve chairman’s speech at Jackson Hole scheduled to hold tomorrow, thereby keeping gold prices above the $1925 support levels today.

The precious metal however remains fragile to the prevailing macros that include a recent uptick in US interest rates, especially the 10-year yield, putting more pressure on the yellow metal.

Gold traders have noticed a significant liquidation of long positions whenever gold touches the $1,950 price level in recent days, showing a sign of price rejection and exhaustion by gold bulls prior to the recent high hopes on the two major economies negotiating a trade deal.

In addition, record highs in risker assets such as global equities and higher hopes on the COVID-19 vaccine being readily available could most likely push the precious metal below the $1800 price support levels and further if risker assets continue printing impressive highs.

The greenback’s recent weakness is not having much a price effect on the yellow metal as it should ,adding more pressure on gold bulls that the yellow metal seem to be in an overbought position partially due to the “risk-on” nature of the soft greenback sell-off as it’s not as damaging as anticipated.

Gold traders are presently positioning their bets for a limited upside impact from an announcement of a soft average inflation target. It has been well-telegraphed by the recent U.S Federal Reserve public statements.

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

 

Why Crude Oil Bears are Clawing Down Crude Oil Breakouts

A close correlation with investors’ sentiment seems to suggest a supportive near-term backdrop as global equities ticked higher flagging risk appetite upsurge by investors.

Although crude oil bears have been able to cap crude oil prices breakout from these resistance levels on last week surge in the US rig counts and rising COVIDD-19 caseloads around major global economies thereby dampening crude oil traders resolve in taking more long bets.

The U.S crude oil benchmark dropped lower from the hurricane spike high this morning as the storm effect looks less of a major concern than initially feared.

WTI prices remain attached to the price range around the $42.20-43.90 area. A breach above this range could pave the way for the liquid black gold to test the $50 resistance level. On the flip side, a move below the critical support level around the $38.75 price level may set the stage for Crude oil bears taking WTI prices to the $34.40-75.

While Brent crude prices have presently breached its last week’s highs above the $45 price level, the bulls seem to be out of gas to push further. Brent is holding on to its Hurricane priced gains due to possible storm affecting crude oil supplies, that American refineries could use to satisfy fuel demand coming from Europe’s major economic hubs.

Crude oil bulls are roaring on growing concern that there could be gasoline shortfalls in the world’s largest economy if American refineries remain closed due to the Hurricane’s pending onslaught.

The key to near term crude oil price movements will be if there are any refinery damage caused by the storms and the news on the COVID-19 vaccines already in the pipeline.

While major oil producers plan on keeping crude oil output relatively tight, the potential for America’s production in ticking upward remains a risk to the near-term view.

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

Gold Prices Remain Under Pressure, as Traders await U.S Federal Reserve for Direction

The recent fall in the bullion’s value was triggered by the U.S dollar standing relatively stable at more than one-week high, while gold traders wait for Jerome Powell’s speech at Jackson Hole scheduled to hold later this week for vital insights on the direction of America’s monetary policy.

The precious metal printed its second consecutive weekly decline. As the greenback’s recent rebound from its two year low is considered as the major macro for the yellow metal latest weakness.

In addition, global investors flocked into risker assets, like stocks, currencies thereby pulling back gold’s bullish run as recent bias coming from Wall Street seems to portray that the worse is definitely over, making gold bulls to retreat from gold’s record high.

Although gold bulls have been able to keep the price of gold above $1,925 a critical support level, competition from multiple financial assets, especially global equities will ensure higher price volatility in the yellow metal.

Gold bulls will need macros that include higher inflation break-evens or renewed greenback downward pressure to take the price beyond $1,975.

It’s expected that if there are no major headlines this week, the U.S dollar and precious metal could consolidate within current ranges in the short term, as COVID-19 caseloads surge still remain a growing concern among traders.

Despite the current volatility in the yellow metal, gold is up over 25% so far this year. Global Central banks have pumped a significant amount of money into an already bloated financial system coupled with the fact that interest rates remain close to zero in emerged markets, in order to curb the negative impact of the COVID-19 onslaught on the world’s global economy.

Gold bulls have a strong case keeping the price above $1,800, except the registered Russian COVID-19 vaccine or other leading vaccines in the pipeline start to make the needed impact.

Gold Prices Struggle as U.S Dollar Surged Higher

The yellow metal pulled back below the $1950 support level on Friday as the U.S dollar surged higher. This dented the precious metal appeal and now looks on track for a second weekly drop, in spite of the lingering concerns over the path to global economic recovery.

Gold’s recent plunge came despite data showed the euro zone’s economic recovery from its deepest downturn on record paused in August.

In addition, a recent report on Europe’s biggest economy showed that economic activity, notably in its service sector, was sluggish in the month of August.

Adding to doubts over a swift economic recovery in the United States after the Federal Reserve officials on Wednesday warned its economic recovery had a blurred outlook.

That said, Gold traders have been able to maintain an important support level around $1,925 which is within the old record highs recorded in 2011.

Many stop-loss orders are most likely to be below that zone, meaning it’s very vital that Gold bulls keep this support area or a continual break in that support area could send the precious metal to the $1,875 area

The recent weakness in the US dollar’s relatively had attracted gold buyers, but as tempo for recovery rise coupled with soaring global equities and optimism on t the US-China trade deal, Gold bears would continue to exert pressure on the precious metal.

Also hopes of a renewed stimulus package deal, by the Democrats, seem to have awakened the Gold bears.

In the mid-term, the precious metal has been struggling to regain its $2000 form, especially when the U.S dollar softens but has not been able to keep the bullish run of late because of the U.S dollar bounce from its two year low.

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

Crude Oil Traders in a déjà vu Pattern, on Market Direction

Brent crude price remained below $45, a key resistance level, as crude oil traders remained relatively on the sidelines during this trading session.

Major Crude oil producers’ status quo seems to be maintaining their current crude oil production despite the resurgence of the COVID-19 pandemic around the globe.

Although the Saudi’s recently had discussions with Africa’s largest oil producer Nigeria’s at the highest level on Nigeria’s commitment in complying with its quota, in order to keep the price of oil relatively stable.

It’s been a challenging period for crude oil traders trying to predict the direction of the energy derivative, other than to conclude that demand concerns remain tethered to the hip of the COVID-19 fears as OPEC returns 1.5 million barrels per day this month.

However Crude Oil bulls remained upbeat after the US Energy Information Administration (EIA) report showed signs of recovery on energy demand.

The EIA reported d gasoline inventories s had dropped by 3.3 million barrels in the previous week versus a modest fall of about 700,000 barrels.

Gasoline output last week dropped by 9.4 million barrels per day from 9.6 million barrels per day a week earlier.

Distillate fuel stockpiles gained 200,000 barrels in the week to August 14, after a 2.3-million-barrel drop estimated for the previous week.

Distillate fuel production averaged 4.7 million barrels per day versus 4.8 million barrels per day for the previous week.

Indeed, that should alleviate some market concerns around the pace of product demand rise, especially around the critical gasoline metrics where a “surprise draw” is always most welcome.

However, the predominant theme in oil markets is the dramatically falling level of crude oil volatility.

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

Precious Metal Prices Falter, but Odds are on Gold Bulls

In the past few weeks, the precious metal fortunes have been aligned to the direction of the falling US dollar as both assets reflect the prevailing narrative that the global financial system might soon be in a bubble.

Currency traders had momentarily gone long on the greenback on Wednesday morning, possibly due to better than expected US economic data released recently.

Gold Bulls had pushed the yellow metal price from $1,976 to $2,002/03 and held its ground at the price range amid the S&P 500 index gaining grounds on Tuesday. The precious metal regained its one-week high on Tuesday following the greenback’s plunge to May 2018 low.

Though the precious metal remained around the $2,000 area for most part of the Asian trading session, it slumped arbitrarily at the start of London’s trading session on Wednesday.

Gold traders had earlier been on the bullish wagon, when Berkshire Hathaway bought stakes a stake in significant gold miner Barrick Gold, buttressing sentiments that investors are moving their funds to deflationary assets

Warren Buffett’s entrance into the precious metal market may attract a new type of investor, who had previously been wary of the bullion metal.

Gold bulls are aware of the present world we live in that contain prevailing macros such as high geopolitical uncertainty, resurgence of COVID-19 and most of all, an already over-bloated financial system.

These fundamentals are expected to trigger gold traders in keeping price relatively above the $1,800 area in the mid-term assuming macros such delay Russia’s registered COVID-19 vaccine approval comes to play and the global economic recovery goes to the wind.

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

Crude Oil Price Volatility is Reverting Slowly to Pre- COVID-19 Levels

A robust way to start the week after progress on oil’s demand recovery was aggregate positive last week with across the board falls in the US inventory reports.

For crude oil traders, it’s been a bumpy trading session for oil, as crude oil prices kept swinging up and down, concerns about global energy demand resurfaced on the face of new lockdowns restrictions around major economic hubs.

However crude oil prices eventually started to move upward jumping to a five-month high, as crude oil traders kept their long positions relatively.

In addition, it seems crude oil price volatility is reverting to pre- COVID-19 levels. Energy traders have been tracking global equities especially the America and Asia equity markets, which revealed optimism about the global economic recovery in general.

So this crucial macro stated above is playing out favorably at the energy market as traders remain bullish in the mid-term, speculating that strong demand for crude oil is coming pretty soon.

Also, Crude oil Bulls were bolstered by liquidity injections from the second-largest economy (China), helping to boost demand for energy, especially in the construction sector, which required a high amount of fuel to power their heavy equipment.

On the supply side, OPEC+ scheduled meeting for tomorrow is expected to be tabled on the metrics around compliance after crude output cuts were eased at the start of this month.

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

Crude Oil Traders Focus More on Energy Supply and Demand Re-Balancing

Crude oil traders appear to focus more on the supply and demand rebalancing than prevailing narratives, such as COVID-19 resurgence, global economic growth, and Crude oil stockpiles.

Still, Brent crude remains above a strong resistance level around $45 at London’s trading session on Monday, buoyed on hopes that a sustained recovery in energy demand is picking up coupled with recent macro coming from the world’s largest economy showing gasoline, crude oil, and distillate inventories all dropped the week-ending August 7.

The world’s second-largest economy is also feeding crude oil bulls, with impressive macros.

China’s economy is showing signs of economic recovery with stimulus support on infrastructure activities set to boost demand for heavy equipment and fuel to power them, energy experts say.

However crude oil traders remain wary on the surge in COID-19 caseloads globally, strengthening fears that a second wave could cause more damage on the world’s fragile economy coupled with new restrictive policies around major economic hubs that could slow global demand for energy, similar to what happened in February and March.

The world’s largest economy latest reading on COVID-19 caseloads showed the death toll has now surpassed 170,000, according to Johns Hopkins University data.

Russia’s Energy Minister Alexander Novak recently disclosed that the global energy market is stabilizing slowly, so no need to ease OPEC+ output cuts ahead of schedule.

Crude oil traders will place their bets, in the mid-term on the outcome of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) meeting that was rescheduled to August 19.

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

Gold Prices will Continue to Struggle Below $2,000 after Gold’s Roller-Coaster Move

Over the past few days, the yellow metal’s value dropped about 4.5% WoW to close at $1,953.90 .Still the precious metal is 24% up this year outperforming most global stock market indexes.

This previous trading week at the precious metal market could best be described as a roller coaster on the basis that it reached above $2,000 an ounce and dropped all of a sudden below $1,900 before stabilizing around the $1,950 price support levels.

Profit-taking and improved economic sentiments from the world’s largest economy made it challenging for gold to shine coupled with the U.S dollar surging from its near two years low.

Also gold’s price upward move in the last few days has been capped by the fact that higher U.S yields increase the opportunity cost of holding non-yielding assets such as gold and the pending U.S stimulus deal dented the bullion metal’s upward move.

Gold bulls have been raging relatively up in the mid-term as the yellow metal rebounded over $2,000 an ounce during the first week of August.

The bulls’ energy is coming from inflationary macros that include the U.S Federal Reserve pumping so much cash that will most likely boost inflation upward and keep the greenback’s value on the downside.

It should be noted that the precious metal had been on the rise since the era of COVID-19 began disrupting the world’s financial system at an unprecedented level.

In the coming week, it’s expected that gold traders will place their focus on the yellow metal’s critical psychological level ($2,000) any breach upward could push gold prices again to target record highs it set at $2,075 a few weeks ago.

However, unless there is a fundamental macro change, the most likely scenario is that the yellow metal will continue to struggle below $2,000, as market indicators show its already tilting towards an overbought position.

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

Crude Oil Bulls Raging Upward on Impressive Economic Data

Crude Oil prices rallied upward on Friday amid growing optimism among crude oil traders that demand for fossils are picking up despite the resurgence of the COVID-19 pandemic.

Brent crude prices at the time these report was drafted was heading for gains of about 1.6% WoW, also the West Texas Intermediate crude prices moved toward gains of nearly 3% WoW.

Crude bulls have been raging upward after data from the world’s largest economy revealed gasoline, crude oil, and distillate stockpiles all plunged last week as U.S oil refiners increased their production capacity and demand for fossil products improved.

Brent Crude prices have been trading around a tight range of $45, as Crude oil bulls showed signs of exhaustion breaking through the resistance level.

The vital macro coming from U.S inventory data has supported the price of crude but the vital catalyst needed by crude oil bulls enough to break the critical resistance level will be the US stimulus package, on the basis that the deal will broaden economic recovery and, by extension, boost fuel demand.

However in spite of these impressive economic data coming from emerged markets, the rapid surge in Covid-19 case counts around the world remain a growing concern among crude oil traders

COVID-19 caseloads around the world have breached 20 million making crude oil traders wary on when new lockdown directives might be necessary in curbing the resurgence of COVID-19 pandemic.

In addition, crude oil traders are also aware about the high geopolitical uncertainty playing out presently. On Thursday the U.S government announced it’s seized the cargo of four tankers transporting Iranian fuel to Venezuela, as it stepped up its campaign on putting more pressure against the two heavily sanctioned countries.

The short-term technical picture for Brent Crude remains bullish. Crude oil traders will watch if prices could break pass $47 (200-DMA) and in the mid-term reach $54 area, especially if Russia’s registered COVID-19 vaccine gets World Health Organization approval.

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

 

Gold Traders Bet on More Stimulus Packages, Lower Yields

Although the yellow metal is still far from its major support level around $1800, which presently is a long way down, however a breach below the $1900 support level again could encourage Gold bears to keep the price of the yellow metal south.

The precious metal continues to struggle with liquidity issues that seem to be getting magnified by summer trading situations.

However it is expected that Gold traders will keep their bullish bets around the $1875-1925 price level as the global economy still faces a host of problems suggesting more stimulus packages, relatively lower yields, and lower interest rates will continue to be the norm in the mid-term.

Although a COVID-19 vaccine cure would certainly send gold price plunging below the $1800 level.

The high sell-offs recorded on Tuesday at the precious metal market because of Russia’s registered COVID-19 vaccine revealed how such macro could be a game-changer as yields went higher and possibly triggering global central banks to pull back on their quantitative easing programs.

In addition, as gold bulls try to rebound from their record losses after Tuesday’s free fall, there is still chance inflation could go upside before the U.S Federal Reserve explicitly target inflation. These could provide the yellow metal some stability over the long term.

Whether or not the yellow metal can regain its bullish momentum will most likely depend on whether there is more room for downside in real yields or more quantitative easing programs by the US Federal Reserve. Still, the possibility of a tightened price action remains in play after the U.S Bond market sent out the most explicit warning last week.

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

Crude Oil Traders Remain Wary over High Geopolitical Uncertainty

American Petroleum Institute (API) revealed a larger than expected drop in U.S crude oil stockpiles for the week to August 7, with an actual drop of 4.4 million barrel versus a 3.2-million-barrel predicted earlier.

Crude oil traders in recent days continue to monitor the global financial markets, on-demand concerns, as COVID-19 resurgence, continues to make energy traders a bit neutral on taking more bullish positions.

Although the recent API report seems to have temporarily stopped the recent downward trend in crude oil prices, Crude oil traders remain wary on the medium-term horizon because of high geopolitical uncertainty around the world; even as the number of new COVID-19 caseloads in the world’s largest economy plunge.

But what seems to be a major concern among major energy players are fears of prolonged unemployment and its consequences, which might continue to pull back the price of crude oil in the medium term.

Crude oil Bulls will face obstacles pushing crude oil prices higher if global employment data do not return closer to pre-COVID-19 levels.

But for now, Crude oil traders are going bullish on the recent announcement made by Russia that it has registered a Covid-19 vaccine, even though some medical experts have their reservations on the Russian COVID-19 vaccine.

Brent crude contract is most likely to remain around the $43-$45 price level in the coming days. Recent changes in sentiment among crude oil traders could push the price higher despite the fact traders remain wary in the mid-term.

In addition, as the calendar turns through to the middle of August, it expected that the ongoing improvement in global economic data especially, from China and the United States will help support Brent crude price above $40 coupled with OPEC + production compliance.

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

Gold Prices Supported on High Geopolitical Risks, Negative Real Yields

In the precious metal market, Gold has been pulling back from its recent record high because of the strong rebound of the dollar lately. Gold traders now seem to be closing some of the bullish bets, showing gold prices could drift lower to the $2,000 support level.

The greenback now looks to be the favored safe-haven asset amid rising tensions between America and China, triggering the U.S dollar Index, to surge near-one week in yesterday’s trading session.

Gold’s relative bullish run could be more challenging if the greenback shows signs of more strength coupled with US bonds yields surging higher on better than expected US economic data.

Traders are also focusing on stimulus talks ongoing at the U.S congress.

However, the yellow metal remains supported on the present high geopolitical risks around the world and potentially US fiscal package delays.

The yellow metal loves uncertainty, and there is plenty of that around the world while gold remains unquestionably supported by a high influx of geopolitical risks, monetary liquidity, and the recent deadlock in the U.S stimulus package.

In addition, negative real yields from emerged markets coupled with inflation, low-interest rates and most importantly the resurgence of COVID-19 have triggered the appetite for more stakes in the bullion asset.

Gold traders are aware that geopolitical uncertainty remains high, knowing the fact that President Trump is growing desperate as elections are just few months away, in the face of rising COVID-19 caseloads and a relatively fragile economy.

Gold prices could stabilized above the $2,000 level in the mid-term, if President Trump continues to lash out at China more aggressively by rolling the Phase 1 trade deal back and even adding more tariffs or economic sanctions like in the case of TikTok and WeChat.

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

Saudis, Iraqis Keeping Crude Oil Prices Relatively High

Crude oil traders traded cautiously into the weekend on the back of rising tensions between the worlds’ leading economies.

Although crude prices recovered, on impressive U.S Jobs report data, crude oil traders were unable to keep their gains because of growing global geopolitical uncertainty.

Brent Crude still remains below the $45 resistance level with an upward move being capped by concerns about the pace of the post-COVID-19 economic recovery.

However, Crude oil bulls are ramping up their long bets because the Saudis (OPEC’s largest producer of crude oil), for the second time in three years, are curbing the amount of crude it sends to the world’s largest economy in an attempt to stabilize crude oil prices and hasten the rebalancing of supply and demand in the present fragile energy market.

Still, crude oil traders remain relatively bullish in the short term, on OPEC unwavering compliance commitment, reaffirmed when the Saudis and Iraqi energy ministers made a joint statement, stating that they are fully committed in complying with OPEC+ present agreement.

Crude oil traders in the mid-term will be focused on August 15 trade talks, which surround primarily on China’s energy imports. Any signs of conflicts in the lead up to this discussion could make a strong case for crude oil bears, pushing Brent crude price around the $40 support level or lower.

Outside the rising tensions between US-China, which is expected to be a norm between now and November the primary concern for crude oil traders still remains the rising COVID-19 caseloads ,the main macro affecting energy demand.

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