Gold And Oil On The Rise Again

Optimism has not ended. Buyers are strengthened not only by the freshly printed money but also by hopes for a COVID-19 vaccination. A rising number of COVID cases in the United States is not spooking out investors, so the show goes on and most probably will continue in the near future as well.

Stocks go up and that’s representing a risk ON mode, but at the same time gold is going higher, which usually contributes to a risk OFF mode. So why is this safe haven is going up? Two main reasons are; fear of rising inflation in the future and a weaker dollar. Gold tends to protect your capital from inflation and goes higher when the American Dollar is weak. Nowadays, we have a perfect combination of those two. Gold is in long-term highs and has definitely managed to break the 1815 USD/oz resistance level. Sentiment here is positive.

Another commodity, which is moving higher is Brent and it seems like demand is back. Factories are producing goods again and people are traveling. Today, Brent managed to break the crucial horizontal resistance at 43.7 USD/bbl. We expected that, after the price created a false breakout of the up trendline and a wedge formation. Both of those things were anticipating a move to the upside. The sentiment here is also positive.

When we talk about commodities, we have to mention the commodity currency a.k.a the Australian Dollar. In general, when prices of commodities are going higher, the AUD strengthens. This is the case now and the AUD/USD is hitting new mid-term highs. From a technical point of view, the price broke the horizontal resistance at 0.699 and the upper line of the symmetric triangle patten. Both of those things happened yesterday, so today, traders had pretty much no choice – they had to buy. As you may have expected, sentiment here is also positive.