Market Analysis

The demonstrations seen in Washington had little impact on the oil price

GOLD
The decline of gold seen in the last few days is linked with the clear risk on scenario which is dominating markets. Moreover, the Democrats’ success in Georgia should make it easier for Joe Biden to put his agenda in place and initiate more fiscal stimulus. Investors reacted by betting on more riskier assets than gold and the price declined to $1,900 before the riots in Washington generated a recovery to $1,930. The situation seems to be calming down, but of course if this is seen as a major risk for the dollar, the consequences on markets would be much bigger and gold could find further fuel to continue its recovery.
Carlo Alberto De Casa – Chief analyst, ActivTrades

OIL
The demonstrations seen in Washington had little impact on the oil price, generating a quick fall to $49.50 for the WTI benchmark, which was easily absorbed by the markets. The price has since jumped strongly back above $50 and in the first few hours this morning continued the recovery, reaching $51 while Brent is approaching the $55 threshold. This sharp spike for oil is supported by the strong risk on scenario which has dominated markets in the last few days. Investors are betting on further price gains thanks to both a recovery of global oil demand in Q1 and Q2 2021 and to the production cuts decided by Saudi Arabia after the meeting of OPEC+. Moreover, news of the victory of Joe Biden in Georgia – which will give him the control of the Senate – strengthens expectations for further fiscal stimulus.
Carlo Alberto De Casa – Chief analyst, ActivTrades

 

source: ActivTrader

 

The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.

All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.