Oil and gold prices remain stable

Oil trading sideways

Crude prices are steady despite some upward pressure in COVID cases in several northern US states and as Germany follows through with an extension of lockdown until April 18^th.  Oil is struggling for direction as another vote of confidence for the AstraZeneca COVID vaccine suggests the rest of the world should have access to a COVID vaccine later this year.

Brent crude oil pared small gains after Saudi Arabia attempted to negotiate a cease-fire with Yemen.  Saudi Arabia’s security infrastructure needs bolstering following recent attacks.  Saudi Arabia also was looking for US support, which should provide added pressure with the Iran-backed Houthi fighters. The Houthi have rejected the latest Saudi ceasefire proposal.

The next big move in crude will likely happen if Americans see further virus surges across the country.  Warmer weather across the country has led to mask-wearing and social distancing going out the window for many cities.

Gold

Gold prices are steadying following the ECB decision to finally increase pandemic emergency bond-buying program (PEPP).  Gold has had a couple of good weeks, otherwise most traders would expect a much higher move given the dip in Treasury yields.

Gold could take its cue from US bond auctions

Gold traders could be in for a choppy week of trading until after Thursday’s USD62 billion auction of seven-year Treasuries.  Late February, the bond market selloff accelerated after weak interest for the seven-year note sale, so the upcoming auction could be a make-or-break moment for the bond market and especially the dollar.
Higher yields are putting downward on gold, but that narrative could start to end as we see emerging market central policies diverge from the Fed.  Central bank demand for gold should remain strong and we are probably near the end of the streak of gold ETF selling.

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