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Commodities

Gold prices post first weekly loss in a month

Gold prices are dropping amid the complexity seen in the U.S. COVID-19 stimulus package deal.

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gold

The precious metal finished up at the last trading session but still ended with a weekly loss.

Gold prices are dropping amid the complexity seen in the U.S. COVID-19 stimulus package, coupled with the U.S dollar’s surprising gains in recent days preventing the gold bugs from extending a three-week rally.

READ: Gold suffers worst monthly drop in four years

What you must know

The precious metal had a shorter trading week as the holiday-shortened week ahead of Friday’s Christmas, printed a weekly loss of 0.3%, after gaining some $100 or 6% over three prior weeks.

  • Also, the bullion tracker, better referred to as the price for spot gold, which proprietary trading firms and hedge funds use in tracking the direction for gold futures, hovered at was down 0.1% on the week.
  • The yellow metal was in disarray relatively in the past week as the greenback rebounded strongly from 2-½ year lows after the British pound crumbled on fresh Brexit woes.

READ: Gold prices up on U.S Central Bank’s will to keep interest rates low

Specta

What you should know

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on macros weighing hard on the precious metal prices

  • “Markets had a bit of wobble on that, but my correlation matrix did not send off any SPX alarm bells just yet. However, oil is raising a few red flags. Still, with risk aversion running high, Trump’s negative stimulus footprint certainly didn’t help matters. But no one will walk away from a stimulus deal, it is all about what contours get changed. And frankly, I do not think Main Street will mind getting a $2000 surprise stocking stuffer, neither will the markets.”

READ: Why Gold prices are skyrocketing after a Joe Biden win

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina or email [email protected] He is a Member of the Chartered Financial Analyst Society.

1 Comment

1 Comment

  1. Violet Talatu Isiramen

    December 27, 2020 at 3:28 pm

    Great work. I need more articles on investment.

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Commodities

Oil prices drop amid fears on energy demand softening

West Texas Intermediate, lost 1.6%, at $52.27 per barrel. It was WTI’s worst daily plunge slide since last Friday when it fell 2.2%.

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Crude oil prices slump, as partial lockdowns resume

Oil prices fell their most in a week after the first U.S. crude build in six weeks on the fear that the world’s largest economy might distort energy demand/supply rebalancing.

What you must know: U.S based oil contract, West Texas Intermediate, lost 1.6%, at $52.27 per barrel. It was WTI’s worst daily plunge since last Friday when it fell 2.2%.

READ: Non-oil sector is critical to Nigeria’s economic recovery in 2021 – Cordros Capital

  • But for the week itself, the U.S. crude contract lost about 0.2%.
  • British based Brent, the global benchmark for crude, settled  1.4%, at $56.10.
  • The gain in crude oil inventories coincided with President Joe Biden’s recent statements calling on its citizens for tough days ahead from the Covid-19, which could kill up to about half a million Americans.

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave valid insights on the effect COVID-19 and other macros have on oil prices.

READ: FIRS hits 98% of target as it collects N4.95 trillion for 2020 fiscal year

Specta

“Oil prices look a tad vulnerable to potential profit-taking after US crude stockpile bearishly rose 2.56 million against consensus draw. Simultaneously, the near-term China crude demand forecast looks high and susceptible to revision lower as lockdown spread in the country ahead of the Lunar New Year

.“While oil traders see through longer lockdowns on the premise that vaccinations will quickly lead us out of the pandemic, COVID mobility clampdowns still hurt the very near-term view.

READ: Bitcoin, Gold, leading Stocks tumble on strong U.S dollar

“And since calls for a commodity supercycle have been many after the November vaccine turnaround, open interest in Brent and WTI has increased hugely, suggesting that the market remains very susceptible to any potential bearish headlines big or small, from a positioning perspective alone.”

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What to expect: OPEC production at the moment remains well below the level required to meet anticipated demand. It should continue to drive a reduction in oil inventories as the global economy gradually recovers.

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Commodities

Gold prices pull back after hitting highest levels in 2 weeks

Spot gold was down by 0.4% to trade at $1,862 per ounce after hitting its highest since Jan. 8 at $1,874.50 earlier in the session.

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gold, Gold fast losing the battle to Bitcoin

Gold prices pulled back a little of its gains recorded on Thursday, as it traded near its highest level in nearly two weeks.

The greenback’s slight rebound at Asia’s trading session on Friday dented the precious metal’s upsides.

Gold prices have been rallying high on reports that President Joe Biden’s administration would push for more quantitative easing programs in order to support the world’s biggest economy.

READ: Gold rebounds strongly amid COVID-19 crisis

At the time of drafting this report, Spot gold was down by 0.4% to trade at $1,862 per ounce after hitting its highest since Jan. 8 at $1,874.50 earlier in the session.

Specta

What you must know: It’s key to note that the precious metal typically moves in the opposite direction from global stock markets, especially the American and European stock markets.

  • Humans are emotionally and physically drawn to gold. It provides a significant store of value.
  • Global Investors buy gold mainly to hedge against inflation.

READ: Gold on a grand slam win, gains $40 per ounce

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on the recent price movements prevailing at the precious market;

“Gold bears have entered a temporary state of hibernation. The yellow metal seems to be past the lows for the month as the current ” everything but the kitchen sink ” policy backdrop and FX tailwinds for precious metals remain favorable.

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READ: Gold rockets above $1850 as it continues 9-year high

“Resistance lies at the 100-day moving average at $1884. But the market needs a few more ounces of policy conviction for a break higher. Treasury yields should dictate the direction of bullion and a rally could quickly ensue if further inflation expectations kick in.”

Bottom line: The yellow metal bugs are still in play, at least for the slightly longer horizon, given that global central banks are likely to stay dovish for an extended period of time.

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Commodities

Oil prices tumble on fears that energy demand is dropping

Oil prices drifted lower after digesting a surprising build in U.S. crude oil inventories that re-ignited fuel demand anxiety.

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global oil market, Bonny Light and Brent crude oil, Arthur Eze, Nigeria cuts crude oil production to 1.77mbpd, Nigeria wants international oil companies to pay up now , OPEC+ deal gets a boost as Russia and Saudi Arabia consider further output cut, 4 key reasons why Brent crude might slip back to $35 per barrel, How substantial is compliance for the Oil market?

Oil prices drifted lower at the fourth trading session of the week, after digesting a surprising build in U.S. crude oil inventories that re-ignited fuel demand anxiety.

What you should know: At the time of drafting this report, Brent crude prices dropped by 0.37% to trade at $55.87 a barrel, and West Texas Intermediate futures plunged by 0.34% to trade at $53.13 a barrel.

  • Oil prices gave up some of their previous gains made on hopes of a massive COVID-19 stimulus program under U.S. President Joe Biden, although both oil major benchmarks were trading far above $50/barrel.
  • Recent data obtained from the American Petroleum Institute revealed a gain of 2.562 million barrels for the week ending January 15. This was against the 300,000-barrel drop in forecasts prepared earlier by some energy experts.

READ: DEAL: Heirs Holdings acquires 45% of OML 17 from Shell, Total and Eni

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave valid insights on the effect COVID-19 and other macros have on oil prices.

“Oil prices look a tad vulnerable to potential profit-taking after US crude stockpile bearishly rose 2.56 million against consensus draw. Simultaneously, the near-term China crude demand forecast looks high and susceptible to revision lower as lockdown spread in the country ahead of the Lunar New Year.

Specta

“While oil traders see through longer lockdowns on the premise that vaccinations will quickly lead us out of the pandemic, COVID mobility clampdowns still hurt the very near-term view.

READ: Gold prices stay firm, investors await Janet Yellen’s speech

“And since calls for a commodity supercycle have been many after the November vaccine turnaround, open interest in Brent and WTI has increased hugely, suggesting that the market remains very susceptible to any potential bearish headlines big or small, from a positioning perspective alone.”

What to expect: OPEC production at the moment remains well below the level required to meet anticipated demand. It should continue to drive a reduction in oil inventories as the global economy gradually recovers.

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