Oil:
Oil is continuing its upwards trend, breaking a psychological $90 barrel price. A weakening US dollar has appreciated oil amid strong earnings results announced by EU and US companies so far.
It seems that second quarter results from most of the companies from the EU are showing earnings well above what economists had previously estimated, and therefore risk aversion has drifted away from the safe haven dollar.
Oil has started to set foot on EU growth expectations and could appreciate even more if more related news is published.
Good residential news from the US yesterday and lower than expected oil inventories, for the second time in a row, gave a bullish bust to oil in yesterday’s trading.
Weekly unemployment claims are expected later today from the US. Good results will depreciate the US dollar even more and therefore add bullish outlooks to the price of oil.
Gold:
After having low estimates following the speech of Federal Reserve Chairman Ben Bernanke on expected growth and inflation expectations, there could still be a short term bullish outlook for gold.
The German vote for Spanish aid today, along high earnings results from EU companies, could inject market optimism which has been long forgotten. This could signal a rally looming ahead which would include more desired inflation in Europe and a stronger Euro. These news items would appreciate gold back to $1,600 levels very quickly.
Investors are looking today at two major elements influencing gold trading, earnings reports and also more news from policy makers. These two elements could easily contradict each other and traders should cautiously evaluate which is the stronger and more influential element.