Oil:
Oil has had a good run this week trading around $90 a barrel and again breaking the barrier during yesterday’s trading session.
ECB executives have been releasing further reports on the topic of enhancing unity in the EU and dealing with Spain and Italy’s high bond yields. It is important to understand that any monetary action by the EU would have a ripple effect across the Atlantic and would create further pressure on the Federal Reserve to take monetary action as well.
US GDP results from the last quarter will today test investors’ expectations for more government action, while any results not equal to the expected 1.5% growth will highly affect demand for oil and therefore its price. A lower result will appreciate once again the safe haven dollar and lower demand expectations for oil and its price.
Gold:
Gold has crossed the junction level with an impressive jump to resistance levels of $1620 and could potentially settle around this level for quite some time now. This once again is a crucial crossroad for gold, and it is worth bearing in mind that it is more volatile than the $1570 - $1590 levels which have been traded these past two weeks.
Reliable statements from the ECB and EU leaders have confirmed $1600 price expectations for gold, but the effects of these announcements will fade away as fast as they arrived if the market does not see confirmed action.
The higher the price of gold at these levels, the more fragile its price movements, and gold traders should therefore be very cautious.