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Oil Slumps On Demand Recovery Concerns As Gold (XAU/USD) Steadies At Nine Year Highs

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  • Oil demand recovery Concerns
  • COVID-19 Disruption Concerns
  • Gold Bullish Tone

Oil was on the back foot, Friday morning, tanking below the$40 a barrel level and heading into a rare weekly loss. Gold (XAU/USD) prices were also on the receiving end tanking below the $1800 an ounce level as traders reacted to stocks closing lower on Thursday.

Oil Selloff

Brent crude was down by 0.6% to lows of $42.10 a barrel after dropping 2% on Tuesday. U.S West Texas Intermediate, on the other hand, was down 0.8% to $39.29 a barrel. Going by the bearish outlook in the oil market, Brent Crude is headed for a 2% weekly decline with U.S oil poised to end the week 3% lower.

Time                            : 07-10-2020

Pivot                           : $39.81

Technical View           : Short Below $39.61

Targets                        : $39.41 – $38.55 – $38.05 – $36.96

Comments                  : Weak Bearish

Last Price                    : $38.66

The selloff in the oil market stems from going concern about oil demand amid a spike in coronavirus cases in the U.S. The U.S has already confirmed a record 60,500 new cases in a single day. With some U.S states imposing lockdown restrictions, there is growing concerns of oil demand shrinking considerably in the world’s largest oil consumer.

Oil prices are also edging lower ahead of a much-awaited Organization of Petroleum Exporting Countries meeting on July 15.

Gold Outlook

Gold prices, on the other hand, pulled lower as traders took profit after a recent spike to nine-year highs above the $1800 an ounce level. The pullback appears to be a short term correction pending further upside movements.

Time                            : 07-10-2020

Pivot                           : $1803.82

Technical View           : Short Below $1798.03

Target                         : $1792.25 – $1783.22 – $1772.03

Comments                  : Weak Bearish

Last Price                    : 1806.23

 The bid tone around the precious metal continues to build, with analysts at ABN Amor reiterating that that gold could hit highs of $1900 an ounce before the end of the year. According to the analysts, central bank policies made up of record-low interest rates should continue to support higher gold prices. Likewise, the analysts expect large scale fiscal stimulus plans by governments to continue supporting gold sentiments in the market.

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