Oil sees some profit-taking
Oil prices are in negative territory on the day after jumping once again earlier in the session. It’s been a volatile day in the markets and crude appears to have been dragged down by the increasing risk aversion we’re seeing. The outlook remains bullish for oil prices under the circumstances but perhaps we’re seeing some profit-taking today.
Brent crude pulled back after coming just shy of $80 a barrel, which suggests we may have seen some profit-taking kicking in. It’s been a strong week for oil prices and this was always going to be a big obstacle after such a large move. With the dollar strengthening as risk aversion kicks in, it will be interesting to see whether oil remains under some pressure in the near term.
Gold struggling to find support
Gold is coming under a little pressure on Tuesday, as the dollar continues to climb in risk-averse trade. The yellow metal broke below $1,740 support and fell back towards $1,725 before finding some support. The outlook isn’t looking good for gold, with the next support coming around $1,700 but $1,680 below being the big test.
With central banks seemingly determined to pare back emergency stimulus and markets turning risk-averse, the bullish case for gold is looking increasingly difficult. Of course, should policymakers take a step back, that may change but for now, the outlook for the yellow metal isn’t too bright.
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