Oil
Oil is mustering up a nice rally as energy traders try to price in a China recovery that will unfold over the next few months. WTI crude has strong support in the mid-$80s as the oil market still remains tight and now that a short-term peak with the dollar is in place.
Crude prices extended gains after the EIA crude oil inventory report showed exports surged to a record high and gasoline demand bounced back. Crude production is anchored and that probably will remain the case unless the oil giants signal major investments in CAPEX.
The next big move in oil might come from oil earnings later this week that will tell us if we are going to see any investments in new wells.
Gold
Gold is ready to form its pre-Fed trading range. A weaker dollar has been good news for bullion investors, but gains should be capped well ahead of the $1700 level. Treasury yields have been steadily declining and that has helped make non-interest-bearing gold look more attractive.
The Bank of Canada’s dovish surprise was good news for gold as it shows a major economy is already downshifting its tightening pace. Expectations are growing for the Fed to shift to a half-point pace in December and if that seems more likely after next week, gold could have a nice breakout above the $1700 level.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
