Oil:
Global concerns following growth results from China have been confronted with stimulus expectations from Bernanke’s semi-annual speech today as Federal Reserve Chairman. Low retail sales, dropping 0.5% according to yesterday’s report in the U.S. have fueled a possible monetary ease and the price of oil is close to its highest since late May, trading at 88$ a barrel.
Tensions from the Middle East, with sanctions imposed on Iran, are contributing as well to the increase in the price of the commodity.
A strong dollar traded against most currencies has not yet led to a decrease in the price of oil. It will be interesting to see if oil can keep its high levels despite low growth expectation worldwide and in the US in particular.
Gold:
Gold has been flirting again with 1600$ levels after another round of stimulus expectations after China results last week. These inflation expectations will fade completely if Bernanke’s speech does not point towards more market easing in the coming days.
Technical analysis proved to be an accurate indicator of gold movements yesterday, with near term support and resistance levels holding well intact. It seems that the market is edging gold slightly higher before Bernanke’s key address today.
A disappointing speech today would again push gold to 1550$ levels, while a monetary ease plan could push the price of gold to mid-June levels and above.