- Crude oil struggles for direction.
- Gold prices near a critical support level.
Crude oil WTI benchmark was below 44 dollars a barrel in a market drifting mostly in a tight range. The rise in the S&P 500 index futures might add strength to the oil price, as the risk-on mood would help to fend-off selling.
Storms Marco and Laura are approaching the US Gulf Coast and threaten to disrupt further the oil infrastructure which was already reeling from the coronavirus pandemic impact. Sixty Percent of the overall of infrastructure is already offline, meaning there isn’t much left for the storms to wreak havoc on, signalling less market-moving implications.
The speeches from the US President Trump at the Republican National Convention (RNC) as well as Fed Chair Jerome Powell at the virtual summit of Jackson Hole symposium are awaited in the latter part of the week. The market might wait until the speeches to make a directional move.
If Trump used the political stage as a platform to play-up his administration’s combative stance against China, markets would cool down their risk-on mood as growth and oil demand will take a hit.
If Powell indicates again that the stimulus toolkit will not be added with more tools, it might trigger a risk-off approach. Market participants had taken a similar stance earlier on such suggestions and might repeat the same.
Gold prices might find support for the near-term as the risk-on mood pulls back the US dollar and puts anti-fiat assets in demand. Like in oil and financial markets, here also, a lot depends on the speeches from Trump and Powell.
