An eventful day Gold and oil are in the red area and await for Biden’s stimulus plan
An eventful day Gold and oil are in the red area and await Biden’s stimulus plan
An eventful day Gold and oil: Today is witnessing several developments in universal markets,
at a time when investors ignored the second trial to impeach the current US President Donald Trump,
while everyone is now looking forward to Joe Biden’s plan and Jerome Powell’s speech and jobless claims.
According to news agencies, Biden is preparing to increase the Coronavirus relief package from $ 900 billion to $ 2 trillion.
As a result, stock markets rebounded everywhere in addition to US Treasury bonds which buyers came into.
This pushed the Us dollar higher but gold fell to a new weekly low.
Evest is following up on developments in the market amid confusion between current economic problems caused by high numbers
of injuries and the strong economic recovery expected in the second half of the year.
Oil is retreating despite the decline in US inventories for the fifth week in a row
Oil prices fell today as fear of falling oil demand dominated sentiments despite the decrease of US inventories for the fifth week in a row.
Brent crude futures fell out of 0.34% to record $ 55. 87 while US West Texas Intermediate crude fell 0.21% to reach 52.8 a barrel.
Brent fell by 0.9% yesterday to record $ 56.06 a barrel and US West Texas Intermediate crude declined by 0.6% to reach $ 52.91.
The US Energy Administration announced in official data that weekly oil inventories decreased by 4.39 million barrels while distillates
also fell by 4.79 million barrels but gasoline inventories increased to reach 4.39 million barrels.
Concerns of weak demand for petroleum products in the United States of America affected commodity movements today
in addition to other data that indicate the same situation in other places.
In Europe, specifically in the United Kingdom, Road Traffic has decreased by 42%.
The aviation sector worldwide is under great pressure and has not been able to recover.
According to the General Customs Administration in China, China’s 0il imports declined in December to reach the lowest levels since September 2018,
but China could increase its imports in general in 2020 by 7%, compared to the previous year.
Despite this, there are still hopes for a rise in prices as US President Joe Biden prepares to announce
the largest stimulus plan in the United States of America today later in order to support the economy which has been suffering since the beginning of the Corona pandemic.
There is also a new vaccine on the horizon presented by Johnson & Johnson, as according to studies and research published about it in a health newspaper in the United Kingdom,
it has demonstrated a strong immune response in its initial trials.
Gold is falling while the US Dollar rises
Gold fell today in light of the rise in the US dollar and US Treasury bond yields at the time investors are awaiting
the details of the package that will be announced by the new US President Joe Biden.
Gold fell out of 0.3%, to trade at $ 1838 an ounce.
The 10- year US Treasury yields rose to settle near their highest level in 10 months.
This gave a push to US dollars and damaged gold.
On the other hand, it is expected that the market will change its direction especially,
with China announcing the largest daily jump in infections of Coronavirus Covid-19 in more than 10 months.
The northeastern province of Heilongjiang witnessed the numbers triple after China imposed strict health measures in Hubei province last week, for the same reason.
In Europe, it seems the same thing as vaccine results will not appear before 2 or 3 months from now,
especially with the spread of the new strain that was first detected in the United Kingdom.
Today, markets are concentrating on the relief package which Biden will announce.
This relief package is supposed to save the US economy from the consequences of the epidemic.
According to previous statements, the plan will be in trillions of dollars so as to boost the economic recovery.
A package of this value may raise real interest rates while on the another side it will increase expectations of economic inflation which gold will benefit from,
as investors use it as a hedge against inflation.
Jerome Powell Chairman of the Federal Reserve is also participating in a hypothetical event today.
This may give signs and indicators that make us expect Us monetary policy during the coming period.
Yesterday, an official in the Federal Reserve said that the economy is “modestly” growing with little hopes of recovery due to the increase in the numbers of
Coronavirus Covid-19 infections.
Differentiation in Stock markets amid anticipation of Biden’s plan
In the Asia stock market, the Japanese Nikkei closed at the highest level in 3 decades,
as the rise in technology stocks supported the index which rose by 0.85%to record 28698.26 points.
Hang Seng Index rose by 0.67%, to reach 28425.78 points, while the Australian S&P/ASX 200 index rose by 0.43%, to trade at 6.715.30 points.
The Shenzhen index fell by 1.92%, to trade at 15.070.13 points.
Yesterday, there were no clear trends on Wall Street. Dow Jones declined.
Jones Industrial Average rose by 0.03%. Standard & Poor’s 500 index rose 0.2%, to trade at 3809 points.
Nasdaq Composite index rose by 0.4%, to record 13.128 points.
In Europe, German benchmarks are likely to start the new trading day with slight price gains.
Investors are looking enthusiastically to the United States. German DAX index is likely to achieve slight price gains in early trading.
According to bank accounts, DAX was in pre-market trading in the range of 14.000 points.
That would represent about 0.4%, more than yesterday’s close.
Mixed performance for the US dollar
In Foreign Exchange markets, the dollar continues its mixed performance, as it gains against one group of currencies and retreats against another.
The Sterling rose against the dollar by 0.04%, to trade at $ 1.3644, while Euro fell by 0.09%, to trade at 1.2146.
The US Dollar rose against the Japanese yen by 0.2%, to a record 104.042, and appeared to be stable against the Chinese yuan at 6.4686.