Gold prices lost some of its blinks at last week’s trading session cumulatively. For the week, it lost 3.4%, its most for a week since late September.
What we know: New York-traded gold for December delivery settled up 0.7% at $1,886.20.
That said, its gain recorded in the last trading session, couldn’t prevent it from posting its worst weekly loss since September, triggered by early selling in the week after market hype that showed Pfizer’s COVID-19 Vaccine was, what the world was waiting for.
What this means: Investors’ of late have been trooping into riskier assets like global stocks on the bias that Pfizer’s COVID-19 vaccine would provide a lifeline to the world’s economy, triggering the precious metal to lose 4.5% at the early part of the week.
Investors’ over-exuberance with progress reported by Pfizer on its Covid-19 vaccine trials triggered a massive rally in risk assets on Monday that led to a 4.5% plunge in gold — the safe-havens worst day since August.
Stephen Innes, Chief Global Market Strategist at Axi, in his weekly closing remark hinted Nairametrics why the precious metal is presently under pressure.
“Gold remains an asset looking for a purpose. US Treasury yields dropped overnight. The dollar was relatively flat again. The EURUSD and Gold traded flat, so by all accounts, gold is little more than a mirror reflection of the EURUSD these days while trying to find a new narrative to ride between now and a possible inflationary wave later in 2021.
What to expect: In the midterm, gold prices will likely be supported on the reports showing the effect COVID-19 infections are having presently on the Northern Hemisphere, coupled with U.S president Trump legal battles on the recently concluded election.
Oil prices Up, OPEC+ continue to limit output
Brent crude futures were up 1.1% and priced at $43.21 a barrel and West Texas Intermediate crude was priced at $40.66 a barrel, up by1.32%.
Oil prices started the first trading week bullish. Oil bulls recouped some losses recorded at the previous session amid high hopes that OPEC+ will continue to limit output in order to curb fears on weaker soft demand, coupled with concerns that the COVID-19 pandemic seems to be out of control.
- At the early session in Asia, Brent Crude futures were up 1.1% and priced at $43.21 a barrel, while the U.S based oil contract, U.S. West Texas Intermediate crude, for December was priced at $40.66 a barrel – up by 1.32%.
Both oil benchmarks contracts ticked up by more than 8% last week on high hopes of a COVID-19 vaccine, coupled with strong reports from the Organization of the Petroleum Exporting Countries (OPEC) and their allies including Russia, that it will stick to lower output early next year in order to keep energy prices relatively attractive.
OPEC+, in present terms, has reduced oil output by about 7.7 million barrels per day, with a compliance rate seen at 101% in October, greatly attributed to the Saudi Energy Minister, nicknamed “Oil Sherriff” as he battles oil speculators and keeps wary over oil producers.
OPEC+ is scheduled to hold its ministerial committee this Tuesday, which could elaborate on changes to oil output quotas when all the ministers meet on Nov. 30 and Dec. 1.
What they are saying
With a well-detailed analysis on the black fossil market, Stephen Innes, Chief Global Market Strategist at Axi, in a note to Our source, spoke on the macros oil traders are riding on presently.
“All the while, oil prices are still riding the vaccine tailwinds supported by OPEC + backstops, as the two sturdy backstops are ruling out of the more worrying demand and price collapse scenarios.
“Last week traders speculated that the US could move into very rigid lockdowns over the holiday season, impacting road fuel demand over Thanksgiving and Christmas, so we are seeing some of those shorts give way at the open, as traders back some of those US lockdown worries and oil is climbing a bit.”
Oil traders are looking for the same trading patterns this week as last week, where optimism around key resistance levels quickly ebbs to pandemic realities. It is hard to escape the current virus realities when it comes to the prompt oil market prices.
BREAKING: Brent Crude up, Trump leads in Michigan, Pennsylvania
Brent crude traded above $40/Barrel gaining more than 2%.
A positive showing in Trump’s hope for reelection has kept the price of Brent crude above the critical support level above $40/barrel.
What we know; At the time of drafting this report, Brent crude traded above $40/Barrel gaining more than 2%.
What this means; This is coming on the bias oil traders are now anticipating President Trump as the most likely winner of the highly contested the election, on the bias that he leads in Michigan, Pennsylvania, keeping the oil bulls enough gas to trigger prices of crude up arbitrarily as under his tenor America became the largest producer of crude oil and further maintained its lead as the leading producer of natural gas.
Data from the Spectator Index showed President Trump leads in most battleground states that would ultimately decide the winner of the U.S presidential election.
Florida: Trump lead (91%) ,Pennsylvania: Trump lead (32%),Georgia: Trump lead (58%) Michigan: Trump lead (35%), North Carolina: Trump lead (91%) Arizona: Biden lead (73%)Minnesota: Biden lead (39%), Wisconsin: Trump lead (42%).
US Presidential Election.
Electoral votes: 108
AR, AL, IN, KS, KY, OK, LA, MO, MS, NE, ND, SC, SD, TN, WV, WY
Electoral votes: 131
CO, CT, DE, IL, MA, MD, NJ, NM, NY, RI, VA, VT
— The Spectator Index (@spectatorindex) November 4, 2020
Oil prices drop, currently on anemic demand
OPEC Secretary-General Mohammed Barkindo admits fuel demand is looking “anemic.”
Crude oil prices drifted lower at the last trading session for the week. The drop is coming amidst a spike in COVID-19 cases across emerged markets which continues to weigh down on oil traders, as it is believed that the virus has curbed demand in two of the world’s biggest crude oil consuming areas.
OPEC+ plans to reduce its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd in January, as OPEC Secretary-General Mohammed Barkindo admits that fuel demand is looking “anemic.”
Brent crude futures (LCOc1) lost about 0.9%, to trade at $42.73 a barrel at the time this report was drafted, while U.S. West Texas Intermediate (WTI) crude futures lost 0.9%, to trade at $40.58 a barrel.
However, with their prevailing price levels, both major crude oil benchmarks are heading for small gains this week.
A technical committee of the OPEC+ ended a meeting yesterday expressing their fears over rising oil supply, as reduced human mobility aimed at limiting the spread of COVID-19 has also curbed fuel usage.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in an explanatory note to our source, gave his outlook for the fragile oil market.
“There is a high probability of a supportive decision from the OPEC+ meeting at the end of November if the demand outlook remains cloudy, especially with COVID-19 spreading rampantly across Europe and with flashpoints igniting in other parts of the world.
“With COVID-19 fears ravishing the world, I am unsure if an OPEC extension of current quotas will still be considered the magic bullet for the oil price recovery.
“That said, a recovery in risk markets like stocks on ongoing stimulus deal might also echo in oil markets.”