Last week was extremely positive for the precious metal - the weakness of the dollar pushed it up to a 4-month peak, and after breaking $ 1331 level, the price of gold went up and was at $ 1,340.
There were several reasons for the rise of gold: first, the above-mentioned weakness of the dollar due to weak economic statistics. Secondly, the ECB's hawkish rhetoric about the eurozone monetary policy, and as a result, the weakening of the dollar. Besides, do not forget the wave of volatility in the crypto-currency market. There is a lot of information coming from different sources, and everything is quite contradictory, so many investors preferred to return to the safe haven.
Let's look at the gold prospects for the coming week.
Since gold has not reached the level of $ 1354, the probability of a corrective rollback to the level of $ 1331 is high, which will be another line of support, in case of arrival, there is a chance of further decline to the level of $ 1313. In addition, it is recommended to follow the important news on the US currency, which are planned quite a lot next week.
Quite interesting situation has formed on the oil market. Black gold managed to rise to the level of 2014. In addition to the impact of the OPEC agreement, which we discussed in previous forecasts, the upward movement of oil was caused by several other factors, namely:
- Cold weather raised consumption of petroleum products;
- High demand of importing countries;
- High consumption margin;
- Fierce debate in the US Senate on Iran.
As for the further development - here the opinions of analysts are divided. Some believe that oil price growth will continue for now, and it makes sense to open long positions, while others believe that inventories increase and shale oil production raise will keep the price at the current level or cause it to fall.
Anyway, deciding on the direction of trade, the above factors should be taken into account, since any of them can have a strong influence on the value of black gold.
As for the short-term forecast, there is a high probability of downtrend, as many investors will close profitable positions and there is high possibility that it will push oil price down for several dollars to the nearest support level at $ 62.14.
EUR / USD
The European economy shows stable and active growth. The inflation rate is normal, and the heads of the ECB are trying not to create a panic to find the right decision to abolish the QE program that operates in the EU. Cautious rhetoric of the ECB head Mario Draghi, chill the bulls, but the ECB missed that the protocol is being published, closed meetings, and last week, judging by the reports of the protocols, they are trying actively to find the right decision to finish the QE program.
This clarity about the plans of the Euro Regulator continued the upward trend in the currency pair.
The nearest technical level is at the level of 1.2350, to which this week the price will, most likely, seek.
The basic US index continues its steady growth, and it’s not surprising, as in the eve of sales reports for the 4th quarter, US companies are breaking sales records. On the eve of the Tesla announced record orders for electric cars and new trucks. Besides, Tesla's management declares the increasing of the production capacity, and give confidence to customers that all orders will be delivered in time.
Also, the weakening of the US dollar creates a good ground for the further growth of the Dow Jones industrial index.