Oil shines with Pfizer approval
Crude oil prices skyrocketed again after the Pfizer COVID vaccine gained full FDA approval, opening the door to more vaccine mandates that will help achieve U.S. immunity. The prospects for crude oil demand will gain momentum here, now that the delta variant appears to be at its peak in the south and as China reduces local COVID cases to zero.
WTI crude prices should be supported in the future, as sales were exaggerated and stocks were reduced. Oil prices could quickly return to US $ 70 if the Fed does not send the higher dollar formally committing to reducing its asset purchases.
Gold is starting to look very attractive again, as Treasury yields continue to be based on expectations that the Jackson Hole Symposium will show an expected approach before committing to reducing asset purchases. Cases are on the rise in Wyoming and this has led to a red code restricting meetings. Jackson Hole will be virtual again and this makes it unlikely that the Fed will want to indicate that they are ready to slow the pace of asset buying.
The Fed minutes noted that there will be a reduced announcement this year, but the risks of delta variants are likely to make Jackson Hole a somewhat dubious event. The Fed may make a reduced announcement in September or November, but it will likely be a slow down with no commitment on interest rate hikes.
The $ 1850 level is all for gold and if after the Jackson Hole Symposium, prices can’t make a new high in August, bullion investors could be on the sidelines. Gold should begin to form a trading range around the US $ 1800 level ahead of Friday’s Fed Powell chair speech.
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