Rising US yields has pushed gold to a multi-month low last week while the oil market rally has been put to a halt as Texas started to emerge from an energy crisis. Both markets will be on watch next week as investors are eager to see whether moves will continue. US earnings season is slowly coming to an end but there are still some noteworthy reports waiting for release. Watch OIL.WTI, GOLD and US500 in the week ahead!
Oil price jumped around 80% during the past two and half months reflecting optimism about vaccination pace and hopes for quicker economic recovery. Prices were pushed higher at the beginning of the week amid production shutdowns in the United States caused by the arctic weather. However, production started to resume in Texas by the end of the week, prices started to slip and WTI dropped back below the $60 mark. Are we observing a trend reversal or just a temporary correction?
Rising US yields have pressured gold recently. Gold fails to gain amid expectations of quicker price growth hinting that the precious metal may be losing its inflation-hedge feature. As yields remain a key driver of recent gold price moves, Powell's semi-annual testimony in Congress (Tuesday and Wednesday) may be an important near-term event for the commodity. Gold price retested November's low at $1,765 at the end of last week.
US equities lost some ground this week but managed to recover part of losses by the end of the week. While the US earnings season is slowly coming to an end, there are still some noteworthy reports waiting to be released. Among key releases next week one can find Home Depot (Tuesday), NVIDIA (Wednesday) and Salesforce (Thursday). S&P 500 companies reported solid results for Q4 so far with sales growth of 2.7% YoY and EPS growth of over 6%.