Oil compensated part of its losses and gold is stable

2021-11-29T17:16:05
gold Negative dynamics Oil
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Oil compensated part of its losses and gold is stable

Oil compensated part of its losses and gold is stable: News of the number of Covid-19 infections has returned to the forefront of all trading markets worldwide,
after the emergence of the new Omicron strain,

with some expecting the world to return to the lockdown of a year and more ago.

Evest follows all market developments in the following report.

Topics:

Oil recovers after a sharp decline at the end of last week

New strain of coronavirus in South Africa

Negative dynamics still dominate Asian indices because of Omicron

Gold is stable and more rising opportunities ahead

 

Oil recovers after a sharp decline at the end of last week

Oil prices rise sharply during Monday’s trading after the collapse following the previous session.

The January futures cost for Brent oil on the London Stock Exchange ICE Futures is $75.2 per barrel,
which is $2.48 (3.41%) higher than the closing price of the previous session.

As a result of Friday’s trading, these futures fell by $9.5 (11.6%) – to $72.72 per barrel.

The price of West Texas Intermediate crude futures for January in electronic trading on the New York Mercantile Exchange (NMX) is $71.11 per barrel,
$2.96 (4.34%) higher than the final value of the previous session.

By the end of Friday’s trading, the value of these futures fell by $10.24 (13.1%) to $68.15 per barrel.

Price quotations came under pressure at the end of last week as a result of concerns
about weak demand due to the discovery of a new strain of coronavirus in South Africa.

New strain of coronavirus in South Africa

On Friday, the Minister of Health of the Republic of South Africa, Joe Phaahla,
told reporters about the rapid spread of a new variant of coronavirus infection in some areas of the country, named B.1.1.529. 

It was also found in neighboring Botswana, Phaahla added.

Later, new strain infections were detected in tourists returning from African countries to Hong Kong and Israel.

Meanwhile, the new strain was identified at a time when European countries are struggling with a new wave of Covid-19 infections.

Earlier, Austria announced the start of the lockdown, and Germany and the Netherlands introduced restrictions on people who had not been vaccinated against Covid-19.

Oil prices rebounded on Monday, backed by expectations of tough OPEC + actions in response to downward pressure on the market, according to Trading Economics. 

The organization has already postponed its meeting scheduled for Tuesday to Thursday
to allow more time to assess the impact of the new Coronavirus on the global economy and oil demand.

Meanwhile, market participants assume that OPEC + may reduce production rather than the planned increase.

 

Negative dynamics still dominate Asian indices because of Omicron

Asia and the Pacific’s main stock indices showed negative dynamics on Monday.

Japan’s Nikkei 225 fell by 0.61% and China’s CSI300 by 0.16%. US S&P 500 index’s futures are rising by 0.92%.

US stock indices fell sharply on Friday, responding, like the entire market, to information about a new strain of the coronavirus.

South African Minister of Health Joe Phaahla reported that the specific strain, designated B. 1.1.529,
is spreading rapidly in some areas of the country, and has also been found in neighboring Botswana.

The number of new infections in South Africa jumped to more than 1200 on Wednesday and reached 2465 on Thursday,
after stabilizing for some time at 200 infections a day.

Additionally, after the news emerged, Britain, Israel and Singapore restricted the travel of their citizens to a number of African countries,
as announced by the European Union.

 

Gold is stable and more rising opportunities ahead

Gold prices stabilized on Monday after concerns about the impact of the Coronavirus variant “Omicron” offset the strong dollar,
as investors assessed whether the emergence of the alternative could change the US Federal Reserve’s tighter stance.

There was no significant change in the price of spot gold at $1792.41 per ounce, while US gold futures rose by 0.4% to $1792.60.

More countries have imposed travel restrictions to try to isolate themselves,
with new cases of Omicron variants in the Netherlands, Denmark and Australia. 

“Given the uncertainty about whether this new alternative is more dangerous than the delta variant and the risk of further restrictions,
the downside of gold must be protected,”
said Harshal Barrott, chief research adviser for South Asia at Metals Focus, adding that gold could be traded Between $1780 and $1830.

Parrott also said that while it was too early to measure whether HIV fears had eased expectations of rate hikes,
gold was at an upward risk that the alternative might eventually lead the Federal Reserve Board to reduce its stimulus plans and raise interest rates.

Atlanta Fed President Rafael Bostic was the latest Fed official, among a growing number of them,
to say he remains open to accelerating the central bank’s bond slowdown. 

Low stimulus and higher interest rates tend to drive up government bond yields,
raising the opportunity cost for gold, which pays no interest.

However, the dollar index rose by 0.2% against optimistic gold stimuli, increasing the cost of alloys for buyers with other currencies.

Actual gold demand rebounded in major Asian centers last week, as traders in India prepare for a potential surge in purchases in conjunction with the wedding season. 

Spot silver prices rose by 1% to $23.35 an ounce. Platinum rose by 2.1% to $973.81, while Palladium added 2.6% to $1794.05.

 

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