Gold has managed to hold onto a significant chunk of its gains made yesterday despite the U.S. trading conciliatory messages with North Korea again, something which has boosted the global stock markets and the U.S. dollar. This comes after Donald Trump yesterday canceled the June 12 meeting with Kim Jong Un, which triggered a risk-off response in the markets.
Crude oil prices are under pressures as the Organization of the Petroleum Exporting Countries (OPEC) and NON-OPEC start laying the groundwork for a production increase and traders take profits ahead of the long holiday weekend.
There is nothing like rising gas prices that get politicians finger-pointing in every direction. In politics, when gas prices go up, it is always the other party’s fault. They like to show that they feel your pain at the pump, so much so that they ask their limo drivers how it is impacting their family. Of course, it is kind of funny that when most politicians talk about the reasons for rising gasoline prices; one might wonder if they have ever seen a gas can in their life.
Crude oil prices managed to recover some of their losses made in the immediate aftermath of EIA’s weekly crude inventories report which showed an unexpected build. Both Brent and WTI oil contracts remain near the multi-year highs they have hit recently.
From $145 to $35 to $115 to nearly $25 and now to back above $70, the price action in the oil market has been a roller coaster for a full decade now, and the question on every trader’s mind is “how far will we rise before dumping again…and what does that mean for other markets?”
The Trump administration is cracking down on Venezuela and laying down threats of the toughest sanctions Iran has ever seen, adding to the risk premium for oil while there are signs that U.S. and global supplies are tightening.
Void of any major economic news from Europe or the United States, the dollar rose further first thing this morning while stocks came under some pressure. As the session wore on though, the dollar eased back a little against safe-haven currencies while European equities remained under pressure, undermined by a growing sell-off in Italian bond markets. This has been in response to Italy’s populist parties reaching a deal to govern the country together, which has raised concerns about the nation’s future in the Eurozone.