Oil:
Oil is still trading just below $90 a barrel in anticipation of the ECB meeting on Thursday. After Chairman Draghi stated on the 26th of July that the ECB would do whatever it takes to end the EU crisis, and following Geithner statement that he has trust in ECB actions to resolve the crisis, the markets reacted very positively on Monday. Expectations also arose from the Fed meeting this week while no strong action is on the table for now.
Employment results from Germany, Italy and the EU in general will be published today. Bad results could reduce the impact still felt from Thursday’s EU meeting.
Oil may cross the $90 a barrel barrier amid the ECB and EU meetings but it will have a hard time staying at that level with bad financial results and no operative plans from the EU and the Fed.
Gold:
Gold is trading just above $1620 and is far away from its record high of $1923. This 16% gap does not currently look recoverable with FED tools running out, and although markets are anticipating another QE or Operation Twist, it seems that there is not much energy left in gold to appreciate.
The commodity’s present price still recommends more stimulus to the global economy. The EU’s Thursday meeting is probably the last resort for the time being, but we can await a potential Fed meeting at the 12-13 September conference.
Personal spending in the US will be published today along with Canadian GDP, yet nonetheless it would be a surprise if the price of gold were to change its $1618 to $1628 range during the day’s trading.