Last week's trading markets were dominated by the sharp drop in the price in gold. As this week starts, gold has recouped some of those losses, currently trading at $1,103.10 per ounce. This represents a gain of over $17, and shows once again that even in the midst of a price rout, opportunities to profit may still come up. Silver prices also rose, but only slightly, to $14.70 per ounce. Precious metals, especially gold, are under price pressure, as investors watch the US Federal reserve for signs of an interest rate hike.
Oil markets are also down, with both Brent and West Texas prices coming under heavy downward pressures. Globally, the brent price is most affected by OPEC's continued high production, matched with expectations that Iran will attempt to flood the market in the wake of the nuclear deal and the potential lifting of economic sanctions. Iran has announced plans to double oil production within one year, and currently has some two million barrels stored about tankers in the Persian Gulf. Against this global oversupply, brent is now trading at $54.46, down a quarter percent and the lowest price since early April.
In the US, West Texas Intermediate is trading at $47.98. The US price is mostly pushed down by continued high production in the States, as shale producers have stopped reducing the number of active rigs.
Also in the US, the dollar is strong, as investors wait for Wednesday's statement from the Federal Reserve. Specifically, they are looking for some hint as to Fed chair Janet Yellen's policy towards raising interest rates before the end of the year. Indications are that she leans toward a September rate hike, and the markets are holding the dollar up accordingly.
Anticipation of higher rates has the dollar stronger against the pound (GBP/USD 1.5505), the Aussie dollar (AUS/USD 0.7287), and the Canadian dollar (USD/CAD 1.3001). The Japanese yen is the safe haven for investors uncertain about the dollar's future, and strengthened slightly, with the USD/JPY now at 123.47.
The euro is also up, getting a boost from the apparent progress in the Greek debt negotiations. As Greece and its creditors work out the details of a new (third!) bailout package, the common currency has reached a two week high against the US dollar. It's currently trading at 1.1079.
Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.