Oil
Oil price has been reflected these past couple of days by two major parameters.
Firstly, economic results throughout Europe and the U.S. have been weak suggesting low demand, but this has also prompted expectations of stimulus aid from the U.S. and Europe which would increase oil prices.
These measures could take effect when EU leaders in Europe are faced with bad economic data and are put under increased pressure from the markets to respond with monetary action.
As investors, at least in the short term, see monetary policy as the right approach, any rumors or indication of monetary action are raising demand and price for oil.
Secondly, the rising tension between Iran and the West has pushed up the price of oil, as supply levels are put at serious risk.
As a result of these two major indicators, investors will be tuned to the NFP results from the U.S. and the outcome of yet another EU banking session, as well as to any results from meetings between Iran and Western leaders.
Gold
Inflation has been sought after by leaders in the U.S. and Europe. Accepting a rate cut from the ECB could welcome the EU to the liquidity trap “club”. After years of zero interest rate from Japan and a 2014 no rate change decision from the Fed, the EU could be going in the same direction.
In that matter it seems that gold is placing its uptrend on two major parameters: first is another repurchase program from the Fed, and second, monetary action taken in Europe.
These actions can push the price of gold very quickly.
Over the past few days, the market has been expecting these actions and the price of gold has almost reached the levels seen a month ago.