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Oil & Gold continue surge in Monday trade

jeffriess
January 6, 2020
by Joseph Jeffriess, Market Analyst

Article Recap

Continued tensions push oil and gold sharply higher into the new trading week.

Oil and gold maintain drive while JPY trims earlier gains.

This morning started where last week left off. Yen made solid gains to the majors, while gold hit levels not seen since 2013. Shares started trade in the red the ASX200 down 0.58%.

Nikkei maintains its sharp opening decline, currently 1.92% lower. The Nikkei and JPY have an inverse relationship. Normally when one is higher the other is lower. Japan is an exporting nation so when the currency is higher it hurts the outlook for profits which weakens stocks. The JPY is also seen as a safe haven so when we see turmoil as we saw on Friday traders move into the yen.

The weekend continued to increase tensions between the U.S. and Iran this has led to weaker opens from U.S. futures, the Dow 0.45% lower and SPX 0.46% lower.

Oil has jumped on open today adding 1.29% and rallying a further 0.59%. Continued tensions have pushed price back above $64 hitting new 9-month highs.

Gold had another surge into this mornings trade, price jumped 2.30% hitting 1587.49. Sellers started a fast fade knocking just over 1% off the high but things have started to settle with buyers adding 0.35% in response.

With no key news due in tonight’s London or NY sessions, traders will be continuing to monitor the current tensions between the U.S. and Iran. With sellers starting to test earlier rallies on the JPY pairs will we see further tests lower tonight?

Good trading from Eightcap.
All times are AEDT.