Oil, gold and metals latest

Oil markets were rocked by Iranian sanctions and problems in Venezuela last week. This week BP chief executive Dudley said that the Iran sanctions could take 1 million barrels off the market per day. We are yet to see if it will be Saudi Arabia or US shale that will pick up the slack.

Meanwhile, in Venezuela, it is expected that Maduro will win the election next weekend but, if that is the case, the economic clean-up will need to be fierce.

• This could be the real catalyst for a new boom in oil equities

The risk of sanctions increasing is a real worry for the market, and the US currently imports around 500,000 barrels of crude from the nation. This month, US energy giant ConocoPhillips seized assets that state oil company PDVSA holds in the Caribbean to compensate it for $2 billion owed in a dispute dating back a decade.

Source: TradingView                     Past performance is not a guide to future performance

In the metals space, much of the price action has been governed by the US dollar. Copper (see chart below) has had some reprieve as the greenback fell and prices pushed back above the $3.00/oz handle. We also have seen some relief as the US/China trade tensions seem to be easing.

At the start of this week we have seen some weakness rejecting of the strong 23rd January low of $3.09/lb. Tomorrow, we see industrial production data from China. The number is expected to grow 6.4% vs previous 6% and is usually a key indicator for base metals, so keep an eye.

Source: TradingView               Past performance is not a guide to future performance

Last week, like copper, we saw a small rally in gold prices due to dollar weakness. The price moved swiftly back in the middle of the consolidation area on the daily chart at $1,326/oz and met some resistance.

Risk sentiment at the start of the week seems to be in favour of stocks, but gold (see chart below) has still managed to edge higher. However, if Trump sticks to the Mr Nice guy routine it will be hard to see any reason for an upside breakout towards the highs.

On the downside, the key area still remains the psychological $1,300/oz level. If we see a break it would confirm the ‘lower high, lower low’ chart pattern.

Source: TradingView                    Past performance is not a guide to future performance

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