Gold and Oil, October 2016

Posted: October 3, 2016 in Uncategorized

Gold

Gold is trapped in a consolidation phase between $1,300 and $1,350 without any particular direction, in absence of shocks.

Looking for a potential shock…

  • Deutsche Bank…not likely. It is a known danger and the Governments have a lot of ways to stop it
  • Trump/Clinton. Clinton looks like the favourite (bad for gold), but pay attention as poll can be wrong as Brexit shows (even if Brexit was a popular vote, while the US election are not)
  • Syria – this could be a potential shock – even though a US/Russia clash is not probable before the US election
  • China devaluation is quite off the radar                                                                                    But as shock goes…they need to be a surprise…so who knows?

Oil

Oil had a massive rally due to the potential production cut. But as I say it is a potential cut and OPEC has not yet agreed who will be bear the cut. Plus there are quite a few fantasy statements (Saudi energy minister said that Iran output should be at a maximum target that makes sense…without anyone specifying what is that make sense!)

The negotiations will go on till the next meeting (30 November). The reality was that the agreement (probably fake) was aimed just at not making the oil price collapse back to USD30. So prices will be probably stay between USD40 and USD50

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