OIL
As European trading commenced, Brent oil prices pulled back, giving up some of their recent gains. Earlier optimism had been fuelled by US interest rate cuts and Beijing's announcement of a stimulus plan to jumpstart China's faltering economy. However, oil traders have paused to reassess these measures' true impact on driving crude demand. The emerging consensus is that China's stimulus may fall short of boosting oil demand to levels that would justify sustained higher prices. As a result, traders are increasingly cautious, recognising that further stimulus might be necessary to restore market confidence in China's ability, as the world's second-largest economy, to drive global oil demand.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
GOLD
As European trading opened, gold prices retreated from the all-time high reached earlier in the session. The precious metal continues to find support, driven by expectations of lower US interest rates, which have weakened the dollar and softened treasury yields—favourable conditions for non-yielding assets like gold. Traders are now focused on three key risk events: tomorrow’s US GDP release, Jerome Powell’s forthcoming speech, and the PCE data expected on Friday. These events have the potential to impact the markets significantly. Given the recent weakening of the dollar, which has boosted bullion due to their inverse correlation, traders are betting that further dovish signals will pave the way for additional Fed rate cuts, potentially driving gold prices higher.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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