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.

 

Oil declines and gold rises Negative dynamics in Asia and America

Oil declines and gold rises Negative dynamics in Asia and America :Oil has continued to decline today, despite the US Department of Energy announcing a decline in inventories,
but there is still pressure on prices due to news from the White House, specifically from Biden.

Evest follows market developments in the following report.

Topics:

Oil continues to fall to the lowest level since October 7

West Texas Intermediate

Negative dynamics in Wall Street and Asia

US stock indices fell

Tesla stock price rose

Gold rises amid falling dollar and US Treasury yields

 

 

Oil continues to fall to the lowest level since October 7

Oil ended trading on Wednesday at the trough since early October and prices continue to fall.

The market continues to respond to reports that U.S. President Joe Biden’s administration is considering selling oil from the strategic reserve.

In the meantime, the possibility of a similar move by China was discussed, at a virtual summit with Chinese President Xi Jinping.

MarketWatch also notes that the oil market was not supported by data on the reduction of oil reserves in the United States last week.

Despite the optimistic report from the Department of Energy, the market reacted negatively, assessing the potential reaction from the Biden administration.

Biden’s administration has made it clear that it wants to reduce oil prices,
and the market is assessing the measures needed to contain prices given the very limited number of tools in its arsenal.

Brent crude futures for January on the London Futures Exchange fell on Thursday by $0.28 (0.35%), to $80 per barrel. 

On Wednesday, its price fell by $2.15 (2.6%) to $80.28 per barrel at closing, the lowest level since October 7.

West Texas Intermediate

West Texas Intermediate crude futures for December were reduced in electronic trading
on the New York Mercantile NYMEX Exchange in the morning by $0.67 (0.86%) – to $77.69 per barrel. 

Its price fell by $ 2.4 (3%), as a result of the previous session, ending today at $ 78.35 per barrel – at least since October 1st.

The United States Department of Energy said that oil reserves in the United States fell last week by 2.1 million barrels – up to 433 million barrels.

The gasoline reserves fell by 707 thousand barrels, and distillates rose by 824 thousand barrels.

Experts surveyed by Standard & Poor’s Global Platts projected an average decline of 2.5 million barrels in oil reserves,
and gasoline – 100 thousand barrels and distillates – by 1.3 million barrels.

 

Negative dynamics in Wall Street and Asia

Stock indices in Asia and the Pacific show negative dynamics on Thursday.

Japan’s Nikkei 225 fell by 0.83%, while China’s CSI300 is fell by 0.64%.
US S&P 500 futures are close to the previous day’s closing.

US stock indices fell by 0.3-0.6% at the close of Wednesday’s trading.

The Dow Jones Industrial Index fell 211.17 points (0.58%) to 35931.05 points on Wednesday.

The Standard & Poor’s 500 fell by 12.23 points (0.26%) to 4688.67.

The Nasdaq Composite Index fell 52.28 points (0.33%) to 15921.57 points at the end of trading.

US Secretary of the Treasury, Janet Yellen,
warned Congress that her department’s funds could run out after December 15, if lawmakers did not raise the national debt ceiling.

She explained that this deadline is directly related to the new commitments of the Treasury Department after the adoption of the US infrastructure spending bill.

The United States Department of Commerce said on Tuesday that the number of homes starting in October
in the US fell by 0.7% on a monthly basis to 1.52 million at an annual basis.

According to the revised data, the number of new buildings in September was 1.53 million, not 1,555 million as previously announced.

Experts predicted an increase in the number of new buildings compared to the level announced the previous month – up to 1.576 million.

US stock indices fell

US stock indices fell by 0.3-0.6% at the close of Wednesday’s trading.

Visa Inc’s shares topped the fall in quotations among the Dow Jones index components, which declined 4.7%. 

Amazon, the world’s largest online retailer, said it would no longer accept Visa credit cards in the UK as of next year due to high fees.

Additionally, stocks of Goldman Sachs Group declined by 2.9%, Merck & Co by 1.8% and Travelers Cos – by 1.6%.

Activision Blizzard stocks declined by 2.9٪. Following a protest involving more than 100 current and former employees of the US video game development company,
calling for CEO Bobby Kotik to resign after the Wall Street Journal reported on how he responded to sexual harassment complaints.

At the same time, Boeing Co’s stock rose by 0.4%. Wells Fargo analysts filed their recommendation with Buy.

This is a result of the company’s stock quotation growth as recently lagged behind those of the Standard & Poor’s 500 index – by about 30% since March.

Tesla stock price rose

Tesla’s stock price rose by 3.3%.

Electric Carmaker President Elon Musk sold stocks in the company for another $973 million on Tuesday,
continuing to reduce his stake for the seventh consecutive auction. 

He sold Tesla stocks for a total of $6.9 billion last week, and Monday – for $930 million.

Musk began a Twitter poll on November 8, promising to sell 10% of his stocks in Tesla if social network users vote for such a move.

Since then, it has already sold 8.16 million securities for $8.8 billion.

Gold rises amid falling dollar and US Treasury yields

On Thursday, gold prices rose with the dollar and U.S. bond yields declining from the highest level in three weeks, raising the appeal of alloys.

Spot gold rose 0.1 percent to $1869.45 an ounce after hitting an all-time high in more than five months on Tuesday.

US gold futures rose by 0.1 percent to $1871.50.

The dollar fell by 0.1 percent away from Wednesday’s 16-month peak. 

The weakening dollar reduces the cost of alloys for buyers with other currencies.

Yields on the benchmark 10-year US Treasury bonds rose slightly on Thursday but declined from a three-week high in the previous session,

reducing the opportunity cost for unpaid gold.