The U.S. futures are trading mildly higher due to trade deal progress. The S&P 500 index closed above the 3000 mark for the first time in nearly 4 weeks yesterday. This is the direct result of the increasing optimism around the so-called mini deal phase 1. Traders do believe that the U.S. in China are likely to seal this deal and this is triggering a risk-on sentiment ahead of something which we all know a Santa rally. This rally usually kicks in In November time and picks up more momentum during December. Nonetheless, it is still quite early to talk about the Santa rally.
For now, Larry Kudlow (the U.S. president's chief economic advisers) is trying his best to keep the bull rally going. His recent comments about the trade deal have supported the confidence among traders. He has assured the markets that decent progress is being made between the U.S. and China on trade negotiations. The U.S. needs to let go the idea of putting tariffs on China, and for the time being it seems like that it is only the December tariffs which could be eating the dust while the ones which are already in place may continue to be the source of escalation in tensions between the two countries.
Gold Bulls Are Trying Their Best
As for the precious metal, it has retraced more than 5% from its six years high formed back in September. Gold bulls are struggling to keep their heads above the water—keeping the price above the 1,500 mark, a clear territory for the bulls. Investors are less risk-averse because the geopolitical tensions over in the Middle East have eased off—to some extent—especially, the possibility of the U.S. signing the deal with China next month has improved the landscape for the global economic growth.
Nonetheless, the current upside momentum in the gold price is mainly due to the weakness in the dollar index. Investors still expect another rate cut from the Fed for this year and this is pushing the dollar lower. However, another improvement in the U.S. NFP next month could change all of this.
U.S. Crude Stock Piles Soaring
The black gold is trading lower today due to the reason that investors are concerned that the U.S. crude supplies may have swollen up again. The US crude stockpiles are expected to have increased by 3 million barrels. Remember this number is already on track for the longest run of gains since last year, precisely last November. In terms of Saudi Amrco production, it has also gone to a normal level of production. In terms of price action, it is safe to say that there is no clear trend except consolidation. The upward moves are capped by the resistance of 55 and the support is at 51.