Brent Oil:

Brent oil is trading higher or in other words, rebounding from Friday’s close and that is nearly on expected lines. Many would say that this is a consolidation trade and many would expect Brent oil to fall below 108 dollars as Brent oil broke its long term support level of 110 dollars.

This is a major thing in the commodities market and due to the rise in stock pile up in Brent oil, this has happened. The European retail sales data which came out in the past weekend is also an indication that the economy is weakening and the demand for crude is coming down.

That is the main reason crude is falling and will fall to around 100 dollars. The euro zone worry along with inventory increase in the oil section and other problems are causing Brent oil to fall hard.

But today was a different scenario. Brent oil rose nearly one percent to close at 108.5 dollars and that is a better sign and this will come through in the following days as many were expecting the market to fall.

Carsten Fritsch, senior oil analyst at Commerzbank, said, “Chinese data is particularly strong. The figures are another confirmation that Chinese oil demand is accelerating again, and there are good reasons to expect that it will carry on growing strongly next year.” This increase in China will help the oil prices to move higher and if this happens, then everything will be fine and oil will trade at levels it has been seeing in the past 3 months.

Another reason which is supporting the oil prices is the unrest in Middle East. This Middles East tensions will surely help Oil to go up and will send the Brent oil prices soaring. The main reason for the oil prices not to fall below 100 dollars is the political unrest in these parts of the world.

Gold:

Gold is rising and the sentiment is helping this commodity rise even further. We know that gold has been in an uptrend since many years up to now. This year, Gold has seen some consolidation and this recent move can be seen as a breakout which may happen in the next coming months.

If this happens, then Gold will be touching a new record high and will trading at historical highs. Gold rose to $1713 an ounce and that is a major breakout. This $1700 mark has acted as a support for gold in many cases and that will remain as a strong support for gold.

But, if the gold breaks this level, then there may be problems and gold may go down to $1650 an ounce. Edward Meir, metals analyst at brokerage INTL FCStone, said, “Although markets are taking the lack of progress thus far with an impressive degree of complacency, we wonder when a potential breaking point will be reached. As a result, we would be cautious on gold and silver here, but less so on platinum and palladium.” Gold is in a strong uptrend as well as silver.

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Category: Finances
Keywords: Fiscal cliff, Australian dollar, Dollar index, United States.