In the commodity market, oil prices have continued their bullish stance after surging over 5% on Monday, supporting the energy sector. Crude prices are driven by concerns of supply disruptions amid a forecast tropical storm that is about to hit the US gulf coast again and a strike in Norway’s energy industry.
WTI has gained 0.15% to $39.29, and Brent has added 0.22% to $41.37. Oil prices also reacted positively to Trump’s return to the White House. Still, the rally is capped by fears of weakening demand, as the number of new COVID infections continue to increase globally.
Gold is losing ground as investors are focusing on stocks and risk assets. The metal has declined by 0.27% to $1,915, but it has consolidated above the $1,900 mark, which becomes a reliable support level. It remains to be seen how gold will behave during the election period. Traditionally, the precious metal has mostly benefited during prior US elections. The bullish case is even stronger this time given that Trump warned that he would not transfer power peacefully in the case he loses. The president is sure that voting will not be exempt from frauds. The uncertainty related to the transfer of power would weigh on financial markets, increasing demand for refuge assets like gold. This scenario is more likely given that Democrat candidate Joe Biden leads the polls by a margin. In FX, the US dollar is retreating as Trump’s return and stimulus hopes are supporting risk sentiment. The USD Index is down 0.07% to 93.483. EUR/USD is up 0.05% to 1.1784.
The British pound is up against the US dollar and moves in tandem with the euro. The sterling was boosted yesterday by Brexit hopes, as European chief negotiator Michel Barnier is about to hold talks with EU coastal countries to obtain more freedom to negotiate terms on fisheries, which has been a sensitive topic for the EU and the UK.
