Gold explodes into gains

6 January, 2017

Gold has exploded into gains this week with prices smashing into fresh monthly highs above $1184. The drivers behind the metals miraculous rebound were Dollar weakness and uncertainty over how Trump's policies may impact the US economy. With the lingering Brexit anxieties and rising political risks in Europe adding to the horrible cocktail of events which may trigger risk aversion, Gold could regain some of its safe-haven allure. Although investor’s anxiety could buoy the zero-yielding metal in the short term, gains could be capped from the prospects of higher US interest rates. A stabilizing Dollar should encourage sellers to exploit the technical bounce with targets stretching back towards $1130.

Silver bears on the prowl 

The price of Silver was dictated by the Dollar this week. The period of weakness seen in the Dollar has provided an opportunity for eager bullish investors to propel silver prices higher. Regardless of the short-term gains, Silver remains pressured on the daily charts with a breach back below $16 opening a path towards $15.50. Investors may pay very close attention to the first NFP report of the year which could leave Silver vulnerable to losses if the results exceed predictions.

WTI Oil hovers above $52

The sensitivity over OPEC and non-OPEC producers cutting oil production continues to expose oil prices to noticeable levels of volatility. Although the prospects of major oil producers cutting oil output have somewhat kept WTI buoyed, the concerns on the compliance side of the deal continue to cap upside gains. Much attention may be directed towards the pending OPEC compliance panel meeting on January 21st which may show if producers are actually trimming output. Any signs of members failing to fulfil their pledge to trim output could revive the oversupply fears consequently exposing oil prices to losses. WTI seems to be trapped in a tight $2 range with a breakdown back below $52 opening a path lows towards $50.


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