Poor performances for Gold and Oil trading circles

Published: 1 December, 2015 12:07

Gold: A Long Winter Ahead?

The bears have once again taken centre stage in terms of online gold trading. However, this is not all bad news for short-term commodity investors.

One of the main reasons for relatively positive news is that it is now widely believed that the Federal Reserve of the United States will raise its interest rates.

This would be the first time a change has been made since 2006. Such an increase has worried some gold traders, as higher interest rates signify that this precious metal will become more costly to hold. Should interest rates increase, it is likely that spot gold prices will suffer as a result.

So, bearish traders have been edging back into the market with gold prices still at or close to a five-year low. Some are also betting that should they sell now, they will profit from buying back at a future low. Only time will tell if this strategy proves to be effective.

Support for Oil or Sluggish Days Ahead?

Oil prices have slightly rallied over the past few trading sessions and there are several reasons behind this short-term trend.

First, the United States dollar saw a slight dip in relation to other currencies and this caused Brent crude prices to rise approximately 2 per cent before settling back. Although this may have been profitable for some online commodity trading experts, the fact of the matter is that supply far outstrips demand.

The only silver lining is an OPEC meeting taking place this Friday. While the cartel is not expected to change its currently policies, any sudden reversal from Saudi Arabia could see a massive spike (if not a short-lived rally) in prices. In essence, long-term dynamics will still have a crucial role to play as opposed to short-term movements.

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