prices have been performing a downside movement since mid-July as they fell
from $1146 per troy ounce to $1054, or by almost 8%. Platinum went under a
global sell off of risky assets used for the production of other items – crude,
stocks, metals, etc. fell victim to negative market sentiment as new, more
contagious and deadly COVID-19 Delta and other strains spread around the globe.
signals of possible early tapering of monetary stimulus in the United States due
to the rise in inflation levels are seen to be much more visible recently.
that the single European currency has been laying on the side of risky assets over
recent months. All of these risky assets are currently standing against the
U.S. Dollar, which has been acting like a safe haven asset so far this year.
The dovish rhetoric of Federal Reserve’s (Fed) Chair Jerome Powell in the U.S.
Congress seems to be pressuring the Greenback while supporting the Euro.
Mr. Powell streamed
placidity despite shocking inflation figures in the United States that hit
European central bank (ECB) made an unexpected move in its monetary policy by
changing its inflation target from the previous “below, but close to, 2% over
the medium term” to “2% over the medium-term with a ’symmetric’ aim”. The new
approach of the ECB is clearer as the Governing Council of the ECB is now
considering negative and positive deviations from this target due to the fact
that now they are equally undesirable.
this statement eliminates “any possible ambiguity and resolutely conveys that
2% is not a ceiling” as the President of the ECB Christine Lagarde said.
Organisation of the Petroleum Exporting Countries (OPEC) and its allies failed
to reach an agreement to extend the production cut deal beyond April 2022. Three
days of dramatic dispute ended without an expected plan being reached
concerning the increase of production quotas by 400,000 barrels per day which
was predicted to be set for August-December 2021. The meeting of OPEC+
countries was postponed three times, but eventually ended with no agreement.
for crude oil is rising along with global economic recovery and reviving
to be full of paradoxes and here is only one. Market participants managed to
have a breather from swift monetary policy position changes last week after the
Federal Reserve (Fed) announced possible earlier than expected interest rate
hikes in 2023 and the start of the stimulus tapering discussion. This
announcement was enough for a short correction of risky assets and the U.S.
prices were testing their highs this week at the psychological level of $75 per
barrel. The strong upward trend is still present despite recent corrections and
there could be many reasons for that. The pandemic is gradually fading, causing
business activity to recover worldwide, and consequently the demand for “black
gold” to increase.
to the recent forecast of the International Energy Agency the global demand for
crude oil could top 96.7 million barrels per day in 2021, which is 5.7 million bpd above the 2020 level, when it
plunged by 8.
of market events on Thursday seem to largely illustrate a possible disposition
of the U.S. Dollar and the Euro. First of all inflation in the United States
presented a 13 year record high as it jumped to 5.0% vs the forecasted 4.7%,
and the previous April figure of 4.2%.
surge in prices may have been a shock for investors some time ago, and led to
immediate strengthening of the Greenback amid swift actions from the Federal
Reserve (Fed) to tighten monetary policy.
months gold has been seen to be acting like a counter-Dollar in the market.
Price movements of the yellow metal are strongly linked to the economic policy
of the U.S. Administration and market perception of the Greenback.
general upward trend in gold prices, that started in March 2020, remain intact.
Since then gold prices rose from $1680 per troy ounce to above $2100 per ounce.
Major central banks, including the Federal Reserve (Fed), have been conducting
ultra-loose monetary policy since spring 2020.
Yuan is traditionally considered as an instrument authorities use to gain
advantages in international trade by constantly devaluing it. For years the
United States accused China for its currency market manipulations. It seems to
be startling that the Yuan has been strengthening for almost a year, from May
2020 until now. The USDCNH declined to 6.36, bringing the Chinese currency to three
like the People’s Bank of China went against its own convictions by allowing the
Yuan to constantly grow stronger.
Markets seem to have quickly recovered in the second half of Thursday after the stress caused by surprising revelations in the minutes released from the latest meeting of the Federal Open Market Committee (FOMC). on Wednesday. The statements by the Federal Reserve (Fed) after the meeting on May 19 were solid it their position that ultra-soft monetary policy would remain in place until 2023 at least. But, FOMC minutes presented a slightly different picture as some of its members stated the opinion that the Fed should begin to reconsider the tapering of bond purchasing at some point.