Crude prices are seesawing as uncertainty over the short-term demand recovery is countered by optimism the US and UK will share their vaccines with the rest of the world. Concerns with crude demand from India and Japan have kept oil prices from participating with the broader rally in commodities.
The OPEC+ panel helped oil pare losses after raising its global demand oil forecast to 6 million bpd. The global economic recovery seems to be firmly in place now that Europe is seeing COVID cases fall across most countries. India and Japan are big importers of oil but it seems that hit to the outlook has mostly been priced in.
WTI crude should consolidate between USD60-65 until the OPEC + ministerial meeting in the middle of the week.
Gold prices appear to be directionless ahead of a busy week that should see the Fed play dodgeball and avoid answering any question that could give a clue on when they might be in a position to discuss tapering bond purchases.
The gold market needs to get beyond the Fed to see if Treasury yields will remain stubbornly depressed. The ceiling right now is the USD1,800 level for gold but that could be short-lived if the Fed is able to convince markets that they will be patient despite very robust data and optimism that the economy will fully reopen by June. Gold could have an easy run towards to USD1,850 this week if the Fed can convince markets that a complete recovery is still very far away.
If gold bulls are disappointed and prices break below the USD1,746 level, bullion could consolidate a while longer until dollar bearishness firmly returns.
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