(18 September 2020)DAILY MARKET BRIEF 2:Gold prices turned bullish

In the commodity market, oil prices continue the rebound for the fourth session in a row, getting closer to update the September peak. Both Brent and WTI have gained around 0.65% as a new storm is now building close to the US Gulf Coast. Thus, the two crude brands have gained about 10% this week. Investors also paid attention to Goldman Sachs’ estimates that the market is in deficit rather than oversupplied. The banking giant anticipates the market to be in a deficit of about 3 million barrels per day by the last quarter of 2020. It predicts Brent to reach $49 from the current level of over $43, and to $65 by the third quarter of 2021.

Also, OPEC said it would crack down on countries that don’t comply with the production cut requirements agreed previously.

Gold prices turned bullish on Friday, breaking above $1,960. The metal re-tests resistance levels amid downbeat data from the US and further stimulus pledged by central bankers, including the Fed.

In FX, the US dollar is declining in early trading on Friday, following the disappointing US labor and housing market data. The USD index, which tracks the American currency against six other currencies, fell 0.08% to 92.907. EUR/USD is up 0.04% to 1.1852.

The pound has declined against the euro and a weakening dollar as the Bank of England hinted it might consider negative rates amid no-deal Brexit, an increasing number of COVID cases, and high unemployment. As for now, the central bank left the interest rate unchanged yesterday.