Oil has gained these past few days trading above 87$ a barrel on Friday. Results from China have highlighted speculation for another stimulus there. China’s 7.6 % growth rate appears to be a bit slow to the West where expectations for the country are much higher.

Oil traded yesterday as high as 86.5$ a barrel after surprising results and information regarding US energy. Oil inventories dropped 4.7 million barrels, 3 times more than was predicted. This huge drop in inventory was not expected given that demand is slowing, particularly as global recession fears are fueled by 2 of the major consumers in the world, the US and China.

Gold had quite a ride on yesterday’s trading. It traded as high as 1601$ but with a quick drop to as low as 1565$.
Puzzling information from the market, Fed executives and EU politics have all contributed to the market volatility and gold’s ups and downs.

Gold is once again at a crucial point, with weak U.S. data influencing investors. The closing price was at 1583 after trading at a high of 1609 and losing 1.6%.
With investors rolling to the U.S. dollar, gold’s prospects lay in the hands of central bankers who in turn have been stalling more stimuli to the economy.

Announcements today from the EU and the BoE will reflect strongly on the EUR/USD and the price of oil.

Expectations are for an ECB cut rate of 0.25% which would plunge the EUR/USD and as a result the price of oil. On the other hand economic expansion seems to be expected if Governments continue to ease their monetary policy.