Gold fell to its lowest level in a month and oil rises again

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Gold fell to its lowest level in a month and oil rises again

Gold fell to its lowest level in a month and oil rises again: Markets continue to panic about the Omicron variant, with financial markets in disrepair resulting from the uncertainty of all investors. 

Evest follows developments in the following report.


Oil rises again after yesterday’s deterioration

JPMorgan Chase: Oil could rise to $150 in 2023

Asia in the Green Zone and Wall Street ends trading in the red zone

Gold declines to its lowest level in 4 weeks

Bitcoin is experiencing a wave of confusion


Oil rises again after yesterday’s deterioration

Oil prices rose this morning, Wednesday, after experiencing a deterioration the previous day.

Brent crude futures for February on the London Futures Exchange rose by $1.95 (2.82%), to $71.18 per barrel.

On Tuesday, the future fell by $3.77 (5.4 percent) – to $66.18 per barrel.

West Texas Intermediate crude futures’ prices for January in electronic trading for the New York Mercantile Exchange (NYMEX) rose by $1.74 (2.63%), to $67.92 per barrel.

During the previous session, West Texas Intermediate crude rose by $1.8 (2.6%) to $69.95 per barrel.

Traders’ focus this week is on the upcoming OPEC + meeting, which is expected to discuss the need for action in response to the emergence of Omicron.

Some experts do not rule out the possibility of OPEC deciding to suspend production growth.

Data from the American Petroleum Institute (API) showed that US oil reserves declined last week by 747 thousand barrels.

Inventories at the Cushing terminal, where oil is stored on the NYMEX stock exchange,
rose by million barrels last week. API receives information from refinery operators, storage tanks and pipelines on a voluntary basis.

The experts are awaiting official statements from the United States Department of Energy, which will be published later on Wednesday.

Analysts surveyed by S & P Global Platts expected inventories to decline by an average of 2.7 million barrels.


JPMorgan Chase: Oil could rise to $150 in 2023

Analysts at JPMorgan Chase & Co expect oil prices could to rise to $125 per barrel next year and reach $150 per barrel in 2023.

This is due to the fact that OPEC + is “strongly in control” of the oil market.

The Bank’s experts believe that the Parties to the Convention have regained their positive stance ,
“which they will defend by keeping stocks at a low level and balancing the market” and other actions.

On Friday, future prices for the WTI brand fell by 13% and Brent crude by almost 12%,
a record daily decline since the early days of the Covid-19 pandemic. 

This panic is caused by a new strain of the coronavirus, Omicron.

Investors are concerned that States will re-impose their restrictions, which will slow global economic growth.

This was all added to Friday’s trade slowdown – the day after Thanksgiving in the United States.

JPMorgan believes OPEC + members are likely to slow production increases’ pace early next year,
and are unlikely to increase supplies unless oil prices are “strongly boosted.”

According to analysts, it will be difficult to ensure that production increases by more than 250thousand barrels per month ,
after the end of the projected production hike (because of the discovery of a new strain of coronavirus),
due to insufficient investment throughout the entire OPEC + industry. 

According to their estimates, the real spare capacity of OPEC + in 2022 would be around 2 million barrels per day,
well below the agreed estimate of 4.8 million barrels per day.

Asia in the Green Zone and Wall Street ends trading in the red zone

Major stock indices in Asia and the Pacific show positive dynamics on Tuesday: Japan’s Nikkei 225 is rising by 0.75%,
while China’s CSI 300 is falling by 0.09%. US S&P 500 index’s futures are rising by 0.73%.

US stock indices in the Red Zone were closed on Tuesday with Federal Reserve System Chairman Jerome Powell ,
stating that the spread of a new strain of Covid-19 “Omicron” is risky for both parts of the Central Bank’s mandate because it could,
on the one hand, exacerbate the inflation problem and, on the other, reduce employment.

For markets, Powell’s announcement was a signal that the Fed’s prime rate hike could be delayed more than previously expected, Bloomberg said.


Gold declines to its lowest level in 4 weeks

Gold alloys slumped to their lowest levels in 4 weeks against a dollar rally late Tuesday in London,
which erased their previous rise after Fed Chairman Jerome Powell said that high inflation,
and a strong economy meant that the U.S. central bank might accelerate quantitative easing,
prompting expectations that interest rates would soon be raised from zero.

Gold alloys rose to $1808 before losing $30 in 40 minutes and falling to their lowest level since November 4.

Silver prices also declined sharply against the US dollar after the Federal Reserve Chairman’s statement,
and came close to $23.30 before losing 60 cents an ounce,
the lowest level since mid-October.

 Bitcoin is experiencing a wave of confusion

The volatile Bitcoin (BTC) market has been muddled in recent days, causing investors to think about whether ,
there are better returns to be obtained from other cryptocurrencies,
even with the emergence of a new Covid-19 variant and the outlook for the next Federal Reserve policy.

As investors worried about news of the Omicron strain of Covid-19, Bitcoin declined more than 2% on Tuesday,
with Fed Chairman Jerome Powell making many hints that the central bank is increasing its interest in inflationary risks,
and may even speed up plans to back down from buying stimulus bonds.

In theory, the emergence of a new variable could lead the Federal Reserve to take the wrong action,
of increasing stimulus, which would benefit cryptocurrencies.

However, Bitcoin, along with other risky assets, experienced a significant selling rate last week ,
and has yet to reach its highest level near $68000 earlier this month,
falling by more than 20% since the peak.

Bitcoin is certainly still firmly entrenched in the rising market zone.

However, other cryptocurrencies, some of which are significantly smaller and have higher risks,
are experiencing increased investment flows,
and funds may be withdrawn away from bitcoin holdings.