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Oil and gold prices remain stable

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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 18th.  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.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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

@https://twitter.com/edjmoya

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