Stock Market News

Prices of Gold and Oil fly; EUR/USD Breaks the Wall of 1.12

The week just ended it was not so interesting for the markets other than for some USA market movers who did finally move EUR/USD.

The interesting news, instead, regards commodities, especially oil and gold.

The price of oil has risen in Friday’s session, following the comments of the energy minister of Saudi Arabia on a possible agreement on the outputs among OPEC members.

The markets are convinced that there will be a coordinated freezing of production levels that will drive a recovery in oil prices. It seems that OPEC has returned to force the market sentiments.

It is not the first time that the key figures of the OPEC release statements in order to artificially push the optimism, that in the short-term fuel the rising price of oil.

At 17:00 on Friday, the price of Brent oil was up by 0,67% to 46,35 fee per barrel, while WTI traded at $ 43,94 per barrel, 1,03% up for the day.

Moving to the gold, it has reached the highest levels ever seen. As shown by the World Gold Council data, investment in gold rose to record highs during the first half of 2016.

The race to ETFs, a traditional safe haven against global economic uncertainty, has pushed the price of gold rising by 25 percent in the first six months of 2016, the strongest half-year increase from 1980. And for the first time ever, the investments represent the largest component of gold demand for two consecutive quarters.

Demand from investors has risen to a record 1.064 tons in the first half of 2016, 16 percent more than the result of the first half of 2009, when the financial crisis prevailed.

As for the market movers, US Retail sales in July were unchanged from the previous month and the index of producer prices for the month of July has undergone a change of -0.4%, a decrease compared to the previous 0.5%

These data helped EUR/ USD to destroy the wall of 1,12, even if it was only for a few hours.

The euro-dollar exchange rate had already set up a bullish trend during the week, even before the arrival of the data published on Friday afternoon.

The last part of Friday has enabled a recovery by the American currency, whose stability is, however, now strongly challenged by the US economy’s health, despite new records registered by Wall Street every day.

Next week start with euro-dollar seemingly headed for 1,13 and with major market movers that may intervene in order to unlock the post Brexit scenario.

Little encouraging data for the US economy still continue and their arrival is always read as an implicit and further postponement of the rate hike by the Fed, even if at this point it is very unlikely before the presidential of November.

The minutes of the Fed and the ECB are expected by the market, respectively, for the days of Wednesday and Thursday, with their contents that could alter the perception of the operators against the state of the two economies.

Data on the US housing sector (published on Tuesday) and Philadelphia manufacturing index (Friday), both positive expected, complete the picture of a week without fireworks but perfectly able to drive the euro-dollar trend.

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