Gold Surges In Commodity Comeback
We’re seeing strong rallies in commodity markets today, and gold is among those making strong gains. The yellow metal is up more than 1% and above US$1,800 once more. A couple of weeks ago it looked down and out, but it’s managed to turn it around. U.S. dollar weakness is supporting the move today, but that hasn’t been the case at times the last couple of weeks.
It may be that China’s success in containing the virus once more has given the entire commodity space a lift, and gold is riding the wave. Whether that can be sustained may well depend on what the Fed has to say later this week. Should tapering be delayed, U.S. yields may come under a little pressure and lift gold once more.
While it has made real progress over the last couple of weeks, some key levels still lie ahead that could really push it into bullish territory. A move above US$1,833 would be very interesting as this would see it overcome a level it has repeatedly failed at over the last month or so, not to mention its 200-day SMA.
Oil Spikes After China Victory
Oil is soaring at the start of the week on the back of China’s virus containment efforts. Crude prices are up around 4.5% and trading at session highs. We may see it run into some resistance now, with WTI trading around US$65, which has been a major level of support prior to last week’s plunge.
But with this rally having some serious momentum behind it, any pause in the rally may only be temporary. Of course, that’s dependent on China not seeing cases reappear. Not to mention other countries stopping their outbreaks getting out of control. The U.S. is continuing to see numbers going in the wrong direction so growth expectations for the rest of the year may need to be pared back further.
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