Trading Sessions: Gold and Silver, Oil

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CORONAVIRUS IMPACT

Gold

Gold is trading at 1769.45, keeping its steady position today, while traders try to interpret market movements and central bank policy. Today traders were surprised as the Bank of Japan announced additional monetary incentives. Policymakers have decided to expand the BoJ balance sheet, by buying assets of ¥10trn, including both treasury bills and JGBs. The purchases are part of an expansion to the already existing Asset Purchase Program. They raise the total to ¥80trn and they are expected to be completed by Q4 2013.

PBoC has also been announcing programs and incentives to help reach their 2012 forecast, and, as a result, traders are also closely watching eco data which is released in China.

At the same time, a Chinese finance ministry researcher said the risks for inflation in China overweight the need for more economic incentives. There is a slew of fresh economic information being released in China on Thursday. The market place is concerned that the China economic data may indicate significant weakness and it seems to be the most important data of the week for the market place.

The U.S. dollar index is steadier in early trading Wednesday, on more short covering in a bear market. The greenback bears preserve the overall near-term technical advantage as the two-month-old declining line continues on the daily bar chart.

Silver

Silver slightly dropped and traded at 34.613 on the backs of profit taking. The strong performance of precious metals continues today and industrial metals traded positively after the BoJ announced additional incentives.

The Bank of Japan initiative gave a boost to many raw commodity markets today, including the precious metals.

Oil

The downtrend of crude oil continues, even with additional incentives offered by the Bank of Japan today. In earlier trading crude oil hiked after the announcement but dropped again. Decreasing global production and manufacturing still has a negative impact on the economies around the world because it reduces the demand for oil and other energy products. Crude is trading at 93.94, which is lower by 1.68, and continues to drop.

Tensions in the Middle East have cooled off, which eased prices.

Today’s EIA inventory indicated that there is a surprising increase in stocks.

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