- Price Remains in $1800 Range
- Rollercoaster Continues for Oil Prices
- COVID Variant Could Become Key Driver
The commodities news for the week has thrown up some action across the board with gold prices holding up well and surprisingly steady around the $1800 with the possibility of some safe-haven demand returning as COVID-cases continue to be a cause of concern. Away from precious metals trading, oil has had a volatile week first surging early on before pulling back to current levels amid OPEC+ turmoil. The more imperative concern though for commodities including gold, silver, and oil remains the increasing number of COVID cases largely due to the Delta variant which has seen some countries revert to a more cautious outlook on reopening.
Gold Level Holds Steadier Than Expected
A strengthening US Dollar forex market is not good news for the price of gold typically. Presently though, there appears to be a confluence of factors that is keeping the metal price higher than it may otherwise be. These include a dipping treasury yield with the US 10-year in particular now at an especially low level. Combine this with some increased demand as a safe haven and we have reached the current prices.
The next stop for gold could even be a little higher though that will largely dependant on other issues of which there are several. These are treasury rates and any recovery that may happen, but a significant influence will also come from COVID case numbers and even the current situation in the equities market with US-traded stocks in Chinese companies and how that resolves.
Oil Price Volatility Continues Through Week
Oil prices had spiraled at the start of the week following the failure of the OPEC+ group to agree on output levels that led to talks being abandoned and a lack of clarity on what would happen. The fear is that the group could abandon the output limits they have set and followed throughout this period that could lead to an oversupply.
Prices picked up though as US data showed a larger drop in inventories than had been expected. This is more proof of the economy getting back on its feet while there are also hopes that the group differences can be resolved effectively very soon.
COVID Variant Threatens to Spoil Progress
Even though the economic recovery is well underway and has been for some time in the commodities market and others, the main threat at preset to this progress remains the resurgence of COVID-19 in the form of the Delta variant. This uptick in cases has prompted many countries to take action and raise threat levels, reimposing some restrictions.
This could have a range of outcomes but the most likely would be further retreat back to the safety of the Dollar and possibly some further movement in the price of gold and other precious metals used as a safe haven. So far market sentiment impact has been minimal but any further increases are likely to have an impact.