US Open – US Stocks still near record levels despite trade worries, Oil slumps, Gold pauses

US stocks remain off yesterday’s record highs as investors process some negative trade headlines that could mainly be attributed to posturing ahead of a final agreement on the details of the phase-one deal.

White House advisor Navarro refuted some of Thursday’s optimistic trade headlines that had markets rejoicing a major de-escalation was upon us.  Navarro said, “there is no agreement at this time to remove any of the existing tariffs as a condition of the phase-one deal.”  He reminded investors that we don’t have a deal unless President Trump says it.

Navarro is a China hardliner and his comments will probably not derail the majority of this week’s rally.

Oil
Oil prices are soft on Friday as some trade doubts grow and after failing to take out some key technical levels this week.  Oil was unable to breakout higher despite all the recent trade optimism because the world oil market is well supplied and OPEC + producers seem to not be pushing for increased cuts at the December meeting.

Oil seems like it could be stuck in a range until we get a final phase-one trade deal and get passed the December 5-6th OPEC + meetings.  The key range for West Texas Intermediate crude could be the $52-$60 zone for the next couple weeks.

Gold

The worst week for gold in two years can’t end soon enough.  Despite a little risk-off trading in Europe, gold was unable to stabilize.  Fresh record highs with US stocks, a bond rout, and a wait-and-see approach on increased stimulus efforts by central banks globally is painting a bearish picture for gold in the short-term.  Gold should eventually find key support as longer-term investors will salivate at the opportunity, but right it looks like a falling knife.  The $1,450 an ounce level is key support if that however does not hold, we could see the freefall target the $1,425 level.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya