This comes after prices plummeted for a sixth week in the week before, dropping under the low of last September. According to the price movement, bulls of the yellow metal may have entirely given up on their argument that prices would rise from exceptionally high inflation on a global scale. As market indices declined on July 19 in trade around the Asia-Pacific region, XAU stayed subdued.
The overall short position on gold between individual traders increased to its top level since 2018, according to the most recent Commitments of Traders (COT) data from the CFTC for the week prior. Prices for XAU could fall quickly if they go under the psychologically significant 1,700 level because, despite weeks of selling, market sentiment is still bearish.
Following prices rising overnight against a generally lower US Dollar, Brent crude oil is currently hovering near the 106 level. Prices were underpinned by a recovery in market mood throughout the Asia-Pacific region, especially in China. A proposal to permit purchasers to postpone loan repayments on incomplete homes is being considered by Chinese regulators. As the nation tries to attain its growth target despite intermittent Covid-19 lockdowns, Beijing is also pressuring local governments to finance more in special bonds for construction projects.
For the month of August, Iran increased its official selling price (OSP) for consumers in Asia from $6.10 to $8.90 over the Oman/Dubai baseline. The price of crude oil for goods from the Middle East Gulf, Mexico, and Russia is determined by reference to that oil benchmark. The action indicates that Iran perceives rising demand from China, which is one of its few clients as a result of the US embargo. In Q2, Iran’s oil production rose by almost 32,000 bbl.
The prompt spread, or the difference among the present and following month’s contract price, has grown during the previous four sessions for WTI crude oil. The market may be constricting based on that. The American Petroleum Institute (API) figures for the US crude oil inventory figures later today may reinforce that opinion. But it is also anticipated that the US Energy Information Administration’s weekly report, which will be released on the evening of July 20, will show a small gain.
Prices for crude oil have increased by more than 10% since last week’s July lows. Prices rose over the psychologically significant 100 mark overnight, then started to decline today, only shy of the Fibonacci retracement of 38.2 %. Right over that Fibonacci mark, the 20-day Simple Moving Average (SMA) is located. Bulls may get more confidence if they surpass those levels.