Gold and Oil Shine in Post-Holiday Trading Calm

By Tomasz Wisniewski|

Published: December 27 2023, 08:26 GMT+0

Gold and Oil Shine in Post-Holiday Trading Calm

As we step back into the trading arena post-Christmas, expectations for high volatility are tempered. The holiday lull is still upon us, though the macro calendar shows signs of stirring with the Richmond Manufacturing Index from the US set to be released at the close of the European session. Predicted to arrive at minus 4, this could bring some movement to an otherwise quiet market.

Yesterday, the New Zealand and Canadian dollars led the charge as the strongest currencies, while the American dollar and the Japanese yen saw corrections. Today’s European session continues this trend with the yen remaining weaker and the Australian dollar, Euro, and Swiss franc showing modest gains. However, these movements are subtle, mirroring the low-key trading environment we find ourselves in.

Looking at indices, they greet the final week of 2023 near their long-term highs. The NASDAQ and others are on the cusp of these peaks, hinting at a potential for a slight bearish correction. Yet, the overarching sentiment remains firmly bullish. The tranquility of this week’s trading might not be the best stage for dramatic shifts, but the bullish undercurrent is palpable.

Commodities, particularly gold, are showcasing some vigor. Gold is currently testing resistance at $2,070 per ounce. Silver, while lagging behind gold, is also making strides. The real standout, however, is oil. It saw a notable rally yesterday, achieving new mid-term highs and challenging early December peaks. This upward movement even led to a breach of the mid-term downtrend line, signaling a possible onset of a bullish phase for oil.

However, it’s crucial to approach this week’s signals with caution. The unique trading landscape between Christmas and New Year’s Eve, marked by reduced market liquidity, often means that these signals might not carry their usual weight.