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Commodities

Gold prices up 2% on oversold signal

At about 10.05 am Nigerian time on Tuesday, November 10, Gold futures were up 1.69% at $1885.60.

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Gold Up as U.S. hits Record Number of COVID-19 Cases, Gold stands firm above $1,800 over increasing virus fears and weaker dollar , Gold stands firm above $1,800 over increasing virus fears and weaker dollar, Gold prices surge higher, Traders focus on U.S. Federal Reserve

The yellow metal rallied above 1% at the second trading session of the week after falling more than 5% yesterday. Investors and gold traders are going long amid the fall of the U.S dollar and signs in its recent price action showing it’s in an oversold condition.

  • At about 10.05 am Nigerian time Gold futures were up 1.69% at $1885.60.
  • Sequel to Tuesday trading session, high price swing was prevailing at the yellow metal market on reports that Pfizer’s COVID-19 vaccine had a 90% efficacy, leading investors to quit the safe-haven metal for stocks, sending gold prices down hard.

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What they are saying

Stephen Innes, Chief Global Market Strategist at Axi, in an explanatory note to Nairametrics, spoke on the present fundamentals disrupting the precious metal market,

“Macro liquidation was the unanimous flow in gold’s $100 pullback and it explains the frantic price action. Massive stops in cascading fashion got triggered below $1940, and also the psychological $1900 level.

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As has been the case in prior sell-offs, gold begins to flow into stronger hands at the $1850 level, and it seems like the market could be basing.

“The medium-term macro picture remains supportive, given both fiscal and monetary stimulus will be required to kick start the economy, while emerging from the second wave pandemic.

“But gold will continue to take its cues from the dollar and real rates, while keeping an eye on the equities rally.”

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READ: Gold prices rally high, gains 3% on U.S dollar drop

What this means

Gold volatility spiked with spot collapsing earlier in the day and buyers have emerged across the curve, with particular emphasis on the front dates.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading. Featured Financial Market Analysis for a Fortune Global 500 Company. Member of the Chartered Financial Analyst Society. Follow Olumide on Twitter @tokunboadesina or email [email protected]

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Commodities

Oil prices heading for 5th week of gains, near $50 per barrel

Brent crude futures gained over 1%, as it was within striking distance of hitting the $50/barrel price mark after gaining around 1% on Thursday.

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Crude oil prices slump, as partial lockdowns resume

Crude oil prices are rallying higher at the last trading session of the week, headed for the fifth week of gains.

OPEC+ members agreed to continue limiting crude oil production to cope with the COVID-19-hit demand, but the compromise agreed on wasn’t what oil traders had really hoped for.

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  • At the time of writing this article, Brent crude futures gained over 1%, as it was within striking distance of hitting the $50/barrel price mark after gaining around 1% on Thursday.
  • West Texas Intermediate futures were also surging by over 1% trading around $46/barrel.
  • OPEC+, the popular alliance that includes OPEC members, Russia, and other leading oil producers, agreed yesterday to ease deep oil output cuts from January by half a million barrels per day, but still failed to reach a compromise on a broader policy for the rest of 2021.
  • Oil traders had earlier anticipated that the popularly known oil cartel group would roll over oil cuts of 7.7 million barrels per day or about 8% of global oil production, at least until the end of Q1 2021.

READ: Saudi Arabia is OPEC’s bull, as oil price tops $70 for first time in 5 months

What they are saying

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave vital insights on the outcome of the all-important meeting, and the high expectations of significant price volatility at the crude oil market:

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“All eyes were on the OPEC+ meeting overnight, where oil ministers ended up meeting at the halfway house and sharing a glass half full in a typical OPEC + fudgy. They came up with the ultimate compromise as the producer’s group agreed to taper production increases.

READ: Naira devalued, now N390/$1 as black market (wired) hits N503/$1

“They will start with 500k barrels from January and hold monthly meetings to review prices and decide on output policies. These meetings will bring some volatility to the market and, importantly, stand to make hedging harder for US producers.

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“One interesting but not so cohesive front was Saudi Arabia and Russia usually chair the meeting; only Russia did the honours this time. Some see this as a clear sign of the conflicts within the organization.”

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What to expect

Looking at the recent price action, Nairametrics is of the opinion that the futuristic price movements of oil prices would largely depend on the degree to which OPEC+ cohesion remains intact.

READ: World’s largest oil company to pay $75 billion annual dividend, despite plunge in profits

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Commodities

Oil prices slump, OPEC+ meets today

Brent crude futures prices were down by 0.3%, trading at $48.10/barrel after initially gaining 1.8%.

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OPEC+ 2, Oil production drops, as Nigeria complies with OPEC+ output cuts  

Crude oil prices were trading lower at the fourth trading session of the week, as major oil producers including Saudi Arabia and Russia are set to meet on oil production cuts extension set in place in the first wave of the COVID-19 onslaughts.

READ: Comparing the 2016 oil price crash to 2020 oil price crash

  • At the timing of writing this report, Brent crude futures prices were down by 0.3%, trading at $48.10/barrel after gaining 1.8% yesterday.
  • U.S. based oil contract, West Texas Intermediate futures, traded at $45.11/barrel, having ended 1.6% higher at Wednesday trading session.
  • OPEC+ are resuming talks in discussing policies for next year after earlier talks produced no agreement on how to tackle soft energy demand amid a new COVID-19 wave.
  • Oil traders anticipate that the popularly known oil cartel group will roll over oil cuts of 7.7 million barrels per day or about 8% of global oil production, at least until the end of Q1 2021.
  • But after hopes coming from three promising COVID-19 vaccines set for the market triggered a rally in oil prices at the end of last month, some major oil stakeholders recently questioned if such prevailing cuts are still needed

READ: Crude oil prices rally as investors remain optimistic about oil production cut

What they are saying

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave vital insights on leading fundamentals weighing on oil prices including the expected outcome from the all-important meeting scheduled to hold today,

“I expect oil to be whippy but confined to current ranges, until OPEC+ signals the all-clear for traders to shift oil prices back to recent highs.

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“Reports were hitting the streets of unnamed OPEC+ delegates saying that progress is being made on talks about production cuts. That, combined with the surprise US inventory draw today, has triggered a move up in oil.

“Discussions will continue in earnest and I think given what is at stake, the base case should be that OPEC+ agrees to an extension of cuts. There are clear tensions within OPEC that may undermine market confidence in the OPEC+ deal from now on.

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“It will be more important than ever for OPEC+ to present a unified front, while waiting for demand to recover when the vaccine becomes widely distributed.”

READ: OPEC crude oil production drops to its lowest in nearly 30 years

READ: Crude oil prices up 12% in barely 4 days, triggered by OPEC+ proposed cuts

What to expect

Any sign that OPEC+ is struggling to reach an agreement could weigh down on oil prices, at least in the near term.

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Commodities

Gold prices drop amid COVID-19 vaccine optimism

Gold futures prices dropped 0.32% at $1,813/ounce, though it’s now trading above the $1,800 mark.

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Gold Up as U.S. hits Record Number of COVID-19 Cases, Gold stands firm above $1,800 over increasing virus fears and weaker dollar , Gold stands firm above $1,800 over increasing virus fears and weaker dollar, Gold prices surge higher, Traders focus on U.S. Federal Reserve

Gold prices drifted lower in Wednesday’s trading session.

The plunge in the precious metal price is coming on growing optimism over U.S. talks for the latest stimulus deal and a COVID-19 vaccine hitting the market very soon saw a retreat from the safe-haven yellow metal.

  • At the time of writing this report, Gold futures prices dropped 0.32% at $1,813/ounce, though it’s now trading above the $1,800 mark after it recorded impressive gains on Tuesday as the U.S dollar retreated, yet gold bulls still face uphill challenges from the COVID-19 vaccine optimism prevailing among global investors.

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Global investors are primarily reducing their bullish bias, taking into consideration the most recent testimony from U.S Treasury Secretary, Steve Mnuchin, and US Federal Reserve Chairman, Jerome Powell, on Monday to the Senate Banking Committee.

Though both hinted that the world’s largest economy was on the path to recovery, they emphasized the need for a lifeline.

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READ: U.S dollar set for weekly losses, currency traders buy Euro, British Pound

What you should know

In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on why the yellow metal could face more selling pressure in the coming weeks, taking into consideration, market sentiments that the future looks bright:

“Gold had been trading well below USD1,800/oz and came close to testing the psychological make or break for ETF concerns USD1,750/oz level. Flashing green lights at the end of the tunnel suggest investors should look through the immediate concerns and focus on the future, which seems incredibly bright and bullish.

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“So, with month-end selling pressure mostly out of the way, it could allow investors to focus on those flashing green sectoral lights at the end of the Covid-19 tunnel.”

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What to expect

Although, a weaker U.S dollar effectively threw a lifeline around gold prices yesterday, helping it rally back from two weeks of declines. That said, Gold prices might resume its bearish play amid high hopes on COVID-19 vaccines.

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