Monday, April 29, 2013

Crude Oil And Gold Recover On Fed, ECB Stimulus Hopes




Crude oil and gold prices are on the upswing to start the trading week as optimism about policy support from the Fed and the ECB boosts risk appetite.
Talking Points
  • Crude Oil, Copper Prices Rise as Risk Appetite Firms on Stimulus Hopes
  • Gold and Silver Capitalize as US Dollar Comes Under Heavy Pressure
Commodity prices are on the upswing to start the trading week as risk appetite firms across the financial markets. The newswires are chalking up the chipper mood to rising monetary stimulus expectations ahead of this week’s FOMC and ECB policy announcements. The Fed is expected to strike a dovish tone, reinforcing the continuity of QE3 in the wake of recently soft US data. Meanwhile, consensus forecasts now point to a rate cut from Mario Draghi and company.
Cycle-sensitive crude oil and copper prices are following shares higher while gold and silver find de-facto support as the US Dollar comes under pressure, increasing the allure of anti-fiat assets. The greenback started the week on the defensive after Friday’s disappointing US GDP report, with the pickup sentiment only amplifying the move lower on evaporating haven flows. US Pending Home Sales figures headline the economic calendar from here, with expectations calling for a pick-up in March compared with the prior month.




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