OIL and gold rally and the American market is not doing well

2022-03-01T19:42:16
bitcoin cryptocurrency gold Goldman Sachs Oil Russian market Tesla US stocks
...

OIL and gold rally and the American market is not doing well: The two major commodities, oil and gold, managed to rise and benefit from the geopolitical war between Russia and Ukraine,
with both commodities reaching record levels since last week.

Evest follows market developments in the following report.

Topics

Oil keeps rising

US stocks are declining

Cryptocurrency trading

Goldman Sachs raises its expectations for gold prices

تداول العملات الرقمية

Oil keeps rising

Oil prices keep rising due to the war, despite reports that the United States and many other countries intend to free oil from strategic reserves.

Fatih Birol, CEO of the International Energy Agency, announced on Twitter that the agency will hold an emergency meeting on March 1.

Brent crude futures for May rose by $0.99 (1.01%) on the London Futures Exchange, to $98.96 per barrel.

Brent crude rose by $3.85 (4.1 percent) to $97.97 per barrel on Monday.

West Texas Intermediate crude futures’ prices for April rose at that moment by $0.85 (0.89%) to $96.57 per barrel,
in electronic trading on the New York Mercantile Exchange (NYMEX).

During the previous session, the futures contract rose by $4.13 (4.5%) to $95.72 per barrel.

According to the Wall Street Journal, the United States and other members of the International Energy Agency (IEA),
may soon decide to release about 70 million barrels of oil from reserves. 

According to Bloomberg sources, this could amount to 60 million barrels, which is less than what Russia produces in 6 days.

 

US stocks are declining

US stocks declined on Monday and oil prices rose as worried investors waited for the war in Ukraine and Russia’s next step.

The Dow Jones industrial index closed lower by 166 points or about 0.5%.

It rebounded from intraday lows, when it was down by more than 1.3%,
as investors attributed that to the impact of the Russian economy’s disruption on global markets.

The broad Standard & Poor’s index closed just 0.25% lower, while the Nasdaq heavy index gained 0.41%.

So far, geopolitical turbulences have had a positive impact on defense inventories.

Stocks of Lockheed Martin and Northrop Grumman rose by 5% and 6% respectively,
while cybersecurity companies such as Crowdstrike also earned more than 6%.

The finance sector is under pressure, with banks like JPMorgan Chase falling 4%.

Citigroup index, which has nearly $10 billion in the Russian market, according to Dow Jones, also fell by more than 4.4%.

In the meantime, the stock price of Elon Musk’s Tesla Inc. rose by more than 7% while Nvidia’s shares rose by more than 1%.

Investors were watching negative developments in Eastern Europe,
where Russian President Vladimir Putin put his nuclear-armed forces on alert while diplomats began peace talks in Belarus.

In Russia, the economy fluctuates as the United States and the European Union impose sanctions,
on the central bank in Moscow as well as on the country’s financial sector.

The Russian currency, the ruble, declined by about 30% against the U.S. dollar on Monday,
due to the Western Alliance’s decision to isolate the main Russian lender from the international messaging system, SWIFT.

 

Cryptocurrency trading

In the meantime, the bitcoin currency rose by 9.3% under what analysts described as growing demand from Russian and Ukrainian buyers.

The world’s most popular cryptocurrency traded at around $41,200 on Monday afternoon, while the price of Ethereum rose by 7.3% to $2800.

According to the experts, the increase can be partly explained as a result of the Russians’ flocking to escape the ruble.

In the meantime, Blockchain.com’s head of research, Garrick Hillman, said that the rise in cryptocurrency may be due to sanctions against Russia,
but may also be due to people converting cryptocurrencies into cryptocurrencies in order to donate to the Ukrainian military and charities.

Trading volumes rose due to the converts between the Russian ruble and Bitcoin,
as well as the Ukrainian Hyrivna and Bitcoin immediately after the Russian invasion,
according to data from Kaiko Research.

More broadly, the market situation was so bad that the Central Bank of Russia prevented the stock market from opening in Moscow.

Goldman Sachs raises its expectations for gold prices

As the West escalates sanctions against Russia over the all-out invasion of Ukraine,
Goldman Sachs raised its commodity price forecast, citing supply disruptions and more problematic inflation expectations.

The goods to focus on are those for which Russia is a major producer – oil, gas, aluminum, palladium, nickel, wheat and maize.

“The range of short-term price outcomes for commodities has become extreme, given concerns about further military escalation,
energy sanctions or the possibility of a ceasefire,” Goldman said in a customer note on Sunday.

“We expect higher prices for consumer goods for which Russia is a major producer.”

According to Goldman Sachs, gold is another safe haven commodity and is set to experience much larger leaps in the future.

“The recent escalation with Russia creates inflationary risks with a clear inflationary recession on the wider economy,
driven by rising energy prices, which reinforces our conviction that gold prices will rise in the coming months,
with a target price of $2150 per ounce,” Goldman said.

Gold rose above $1916 per ounce on Monday, in response to additional sanctions against Russia.

Some gains were lost as the trading session progressed, with gold for April reaching $1.905.70.

But precious metal is still close to its best monthly performance since May.

Goldman explained that gold will play a key role in this conflict as Russia takes precious metal as a means of pressure amid sanctions.

Russia’s total gold reserves are 2298.53 tons, according to the World Gold Council.

 “The unique role of gold as a currency of last resort is likely to be evident if restrictions on the access of the Central Bank of Russia ,
to its external reserves make it benefit from its large domestic gold stocks to continue foreign trade, most likely with China,” the bank said.

brandfooter