Gold and Oil: The Bears are Back in Town

Published: 21 July, 2015 11:31

Much of the recent online trading news has centred around the falls that both gold and oil have taken in recent weeks. For commodity investors, it seems that the bears have indeed taken the stage. Gold has fallen to less than $1,100 dollars an ounce; the first time that this level has been seen since March of 2010. From an even more drastic perspective, this signals that it is no less than 40 per cent below its all-time peak that was reached in August of 2011. As historically always occurs, this dip has been seen to reflect more positive economic data emerging from the United States. Additionally, Federal Reserve chairman Janet Yellen hinted that interest rates are likely to rise during the remainder of 2015.

Oil has likewise taken hits during the past week. As Brent crude prices are now hovering at just under $57 dollars a barrel, pessimism has taken hold of this online commodity trading community as well. This downturn is seen as a product of both an increased supply within the United States and the unwillingness of OPEC to curb their production. Some analysts feel that oil still has a significant amount to fall before any type of support level is reached. Much like gold, investors have been keen to wait and see what happens before becoming involved in what may very well prove to be a losing short-term position. As we are currently in the middle of summer, it is probable that any major upward movement will not be seen before the beginning of autumn. Still, there are those who are optimistic in regards to what the near future may hold.

Those who are interested in long-term strategies may begin to look at picking up positions in either market, as prices will inevitably rise. This is particularly the case with gold should Greece not fulfil its bailout obligations.

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