Oil and Gold: Storm Clouds Gathering

Published: 21 December, 2015 12:50

Oil Hits an 11-Year Low

While this may not be a real surprise to professional online commodity traders, the fact that the price of Brent crude has dropped to levels not seen since the recession of 2008 has some investors questioning how low it may go.

Many technical analysts have pointed out that due to an excess of supply combined with steady OPEC production rates, support levels could still be a long time off.

Let us keep in mind that oil was trading at no less than $115 dollars a barrel in June 2014. The price of crude hit a new low this week; trading as low as $34.17 dollars at one point before making a slight recovery. With such a glut in supply, crude is likely to fall further.

Gold: The “Perfect Storm”?

It is no surprise that gold has taken recent hits due to the decision of the Federal Reserve to raise interest rates. A stronger dollar will normally signal a sell-off. However, some online trading analysts feel that the losses experienced for three consecutive years will carry over well into 2016. The three variables that are likely to cause this continued slide are a stronger dollar, a bearish commodity market and the aforementioned interest rate hike.

Some believe that this precious metal may even drop below the critical value of $1,000 dollars by the end of 2016. It appears as if the “buyer beware” sentiment has gained a strong foothold.

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