Gold many are cautious short has “ruled” the oil market?

The first two days of last week, spot gold and silver has been in a horizontal consolidation stage, Wednesday, the European and American epidemic escalation ignited market worries, European and American stock markets across the board plunged, gold and silver was also miserable sell-off, gold from $ 1911 week highs and lows plunged $ 40; Thursday’s beautiful economic data make many accelerate the withdrawal of the field, spot gold once fell below the 1860 barrier, the final weekly closing down more than 1%; spot silver last week to close down 3.75%.

Oil markets fared even worse last week. On the one hand, the spread of the epidemic threatened the recovery of crude oil demand, on the other hand, the oil market by the U.S. stock plunge drag (last week, the three major indices hit the March flash crash since the largest weekly decline), WTI crude oil fell below $ 35 during the week, weekly cumulative decline of 10.11%; Brent crude oil is also down nearly 10%. October, both oil hit the largest monthly decline since March.

Foreign exchange, the U.S. dollar continued to rebound from below the 93 level during the week, the highest station 94.12, the daily cut 6 consecutive sunshine, and finally last week cumulative gain of 1.5%. Subject to the dollar rebound, non-US currencies generally lower, last Friday the euro against the dollar once fell to a one-month low; the pound against the dollar only closed at 1.30 below, down 0.69% last week

Starting this week, the North American region began to implement the winter time, U.S. and Canadian financial markets trading hours (gold and silver, U.S. oil, stock markets, etc.) and economic data release time will be delayed by one hour compared to daylight saving time, so please note that investors.

[This week’s events at a glance]

① The most “special” election day ever is coming up.

This Tuesday will mark the much-anticipated polling day for the 2020 U.S. election, which for the first time is using mail-in ballots due to the epidemic.

The epidemic in the United States is still intensifying in recent days. According to Reuters, at least 100,000 new cases of coronary pneumonia were diagnosed in the United States on a single day, setting a new global record.

As the U.S. 51 states, 25 states allow ballots late on election day to mail, as the epidemic escalates around, some investors fear that the day of the vote can not reveal the final results, the results may even be delayed until next year to confirm.

In addition to the United States, the epidemic in Europe is also very serious. On Saturday, British Prime Minister Johnson announced that the blockade measures in England will be up to four weeks until early December, Spain, France and other European countries last week also successively took blockade measures. The uncertainty of the election is increasing, superimposed on the impact of the epidemic, the market has become extremely sensitive, investors must do a good job of wind control.

② Federal Reserve interest rate decision to drive, there are two central banks to pay attention to

The Federal Reserve will hold its interest rate decision at 3 a.m. PST on Friday, a day later than usual, largely in light of the election’s impact. Fed officials are widely expected to refrain from taking any additional stimulus measures during the election.

Moreover, while Fed officials have been emphasizing that risks to the economy tend to be on the downside, official data so far continue to show a surprisingly upward trend. Against this backdrop, TD Securities expects that a change in the wording of this week’s FOMC meeting statement could be minimal.

However, institutional analysts suggest that Fed Chairman Powell may be more open to adjusting his stance on the bond purchase program at a subsequent meeting (possibly as early as December).

It is noteworthy that Morgan Stanley portfolio manager Jim Caron has previously said that Biden took office or prompted the Fed to raise interest rates early. So investors still need to pay attention to the election results on the future of the Fed’s policy path or will have an impact.

In addition to the Fed, the Australian Federal Reserve and the Bank of England will also announce an interest rate decision this week. Comprehensive Australian Fed officials in recent weeks, especially the Australian Fed President Lowe’s own views, the market is widely expected that the Australian Fed will take interest rate cuts, in addition to strengthening the yield curve control (YCC), lowering interest rates on term financing instruments and increase the scale of bond purchases and other measures, investors need to pay attention to the downside risks of the Australian dollar.

As for the Bank of England resolution, considering the worsening epidemic will lead to a deterioration of the economic environment, Standard Chartered Bank and other institutions are expected the Bank of England will increase quantitative easing, but should not take negative interest rate policy, because the central bank’s monetary policy committee members on the effectiveness of negative interest rates are still divided.

(3) The first post-election non-farm payrolls, will it bring a surprise?

On Friday at 21:30, the US non-farm payrolls report for October will be released (the data is delayed by an hour due to the start of the winter season). Despite the grim epidemic, recent economic data released in the US have been brighter. The US initial jobless claims released last Thursday fell to a new low since the week of March 14 and have been below 1 million for six consecutive weeks.

XM analyst Marios Hadjikyriacos stated.

The latest Markit PMI points to show that the economy will continue to recover, the number of people seeking unemployment benefits has fallen significantly, and the US employment data does not seem so bad.

The market expects the U.S. to record an increase in non-farm payrolls of 610,000 in October, and the unemployment rate will fall from 7.9% to 7.7%.

[Popular Variety Outlook]

Precious metals: gold bulls become cautious ahead of election

Last week, gold was mainly affected by several factors: the escalation of the epidemic in Europe and the United States triggered the selling tide, the dollar is strong; pre-election transfer positions; beautiful economic data; stimulus negotiations stalemate. After the plunge last Wednesday, the price of gold has stabilized in the last two days.

The CFTC position report shows that in the week ending October 27, speculators held gold speculative net long by 970 contracts, of which long positions sharply decreased by 14,143 hands, short positions sharply decreased by 13,143 hands; silver speculative net long by 97 contracts.

Nick Cawley, strategist at financial website DailyFX, believes that the current volatile movement in gold prices is the quiet before the US election, and that the US bond real yields have rebounded from deep negative values, to the detriment of gold. The data shows that a large number of individual traders are still net long gold positions, and usually we use contrarian thinking to interpret this, suggesting that there is potential for the gold price to continue to move lower.

Of course, this week’s gold trend also depends heavily on the election results. Many argue that Biden’s ascension to power will be good for gold, as it means that the government will have the ability to implement major fiscal stimulus measures to shore up the struggling economy. Another scenario that could be beneficial to gold is a contested election result.’s senior technical analyst Jim Wyckoff noted that in this scenario, safe-haven funds will flood into the gold market.

Technically, FX Empire analyst David Becker noted that gold is poised to test resistance near its 10-day moving average of 1897. Gold’s support is near the September low of 1848. The current reading of the Fast Stochastic is below the oversold trigger level of 20, which could indicate a correction.

Crude Oil: “Short Sellers Already Rule the Oil Market”? Election results are key

Last week saw a record number of new coronary cases diagnosed in a single day in the US, while new blockade measures in Europe could plunge the region back into recession. As the epidemic intensifies, the outlook for a recovery in oil market demand is clouded. Oil prices hit their biggest monthly decline since March in October, and on the first opening day of November, crude remained miserable, with the two oils plunging 5% at one point.

The CFTC report showed that in the week ended October 27, New York crude oil speculative net longs decreased by 18,258 contracts, of which short positions increased by 13,339 hands, indicating that investors are very bearish sentiment on crude oil.

FX Empire analyst Adesina Olumide bluntly said that short sellers have ruled the oil market. At the end of last week, the news of Libya’s increased production has intensified the market’s concerns about oversupply of crude oil. Libya’s National Oil Corporation chairman Mustafa. Sanalla said Libya’s daily crude oil production has reached 800,000 barrels per day, the country’s goal is to reach 1.3 million barrels by early 2021.

In addition, oil market investors are also watching the outcome of the U.S. election. There are reports that if Biden wins the US election, US-Iranian relations may be eased, when Iran’s over 2 million barrels per day of oil may return to the oil market, dealing another huge blow to the crude oil supply and demand balance.

Against this backdrop, the market expects that OPEC+ may offer actions, such as delaying the easing of production cuts or deepening them further. According to Petro-Logistics, an oil transportation consultancy, OPEC crude oil supply will be reduced by 500,000 barrels per day in October. Last week, Iraqi oil minister Jabbar reiterated his support for the OPEC+ production cut agreement.

Forex: the dollar snatched 6 consecutive sunsets, but investors have become cautious

Like the gold market, currency market investors seem to be watching.

Last week, the dollar violently rebounded, the daily victory of 6 consecutive positive. However, from the CFTC position report, the dollar investors are also gradually withdrawn – as of October 27, the number of dollar net long positions decreased by 1404 hands, of which long positions decreased by 14184 hands, short positions decreased by 12780 hands.

This week, the election, the Federal Reserve decision and non-farm payrolls will be the focus of the currency market. But more than the Fed, FX markets are likely to be concerned about the impact of the US election.G7 FX market volatility suggests that markets expect election-related risk premium/uncertainty to persist beyond November 3. It is expected that there is a greater risk of the US dollar being rolled again ahead of key events.

In terms of non-US currencies, this week can focus on the Australian dollar and the British pound, the Australian Federal Reserve and the Bank of England this week will be announced interest rate decisions, the market is expected to both central banks will offer more dovish action, the Australian dollar and the British pound fear of downside risk.

According to analysts at UOB.

“We see asymmetric risks to GBPUSD and the risks are skewed to the downside. Even if a last-minute agreement is reached between the UK and Europe, the UK’s economic outlook will constrain the pound’s rally and we have renewed our conservative stance on GBPUSD, with internal expectations for a fall to 1.25 in the final quarter.”