Gold looks to the UK and Italy for support
Gold took a beating last week at the hands of US rate hike expectations and unexpectedly strong data. Now, renewed dollar strength against EUR and GBP is keeping the pressure up on the yellow metal.
Head of Commodity Strategy
The battle between fears of a supply-crunch driven by Iran sanctions and a further collapse in Venezuelan production on one side and the future risk to demand as a result of a slowdown in global growth on the other is likely to keep the oil market rangebound for now.
Following some overnight weakness, crude oil is now trading higher ahead of the weekly stock report from the US Energy Information Administration. The main driver has been renewed threats from Iran concerning the Strait of Hormuz and comments from Fatih Birol, Executive Director of The International Energy Agency. Barol said that the combination of strong demand and unstable supply from the Middle East together with falling supply from Venezuela could see the oil market tightening into the year-end period.
Having broken back above $75/barrel, Brent crude oil is aiming to test the upper band of resistance between $78.50 and $80/b.