The new week has started with gold still trading around $1,615-$1,620, more or less the same value as on Friday despite a volatile start which saw the price jump above $1,635 in very early trading. The fact that the price was unable to hold above $1,630 confirms that investors are in a “wait and see” mode with the sideways movement of the last 5 days between $1,595 and $1,640 continues. For now, the huge amount of liquidity that the Fed is going to send into the markets has been unable to generate further gold rallies, but the scenario could quickly change.
The weakness of stock markets is adding further bearish pressure on the oil price, with the WTI benchmark again approaching the psychological threshold of $20. Markets are now betting that the crisis could be relatively long, and the barrel is the perfect asset to be shorted by traders. From a technical point of view, the price is now dancing between the significant figure of $20 and the support at $20.50, which is the bottom reached in the last few weeks. A clear fall below $20 would open space for further declines amid this massively bearish trend.
