Limited Gains for Gold & Oil amid Foggy Stimulus

WikiFX News (10 Oct.) - Recently, improving risk appetite across financial markets has bolstered both gold and crude oil. But progress on US fiscal stimulus is likely a prerequisite for their lasting gains, considering Trumps frequent reversals.

Trump rejected a $2.2 trillion Democratic plan but signaled support for its parts, such as a bailout of the airline industry and another round of stimulus bills. This lifted sentimental buoyancy and send oil prices higher. At the same time, the fading haven demand prospered gold prices at the expense of the US dollar.

As Trumps frequent reversals have brought about uncertainty to stimulus talks, gains for gold and oil are likely to be limited unless concrete progresses are made.

Oil prices are hovering below $44/bbl. A breach of resistance in the $42.40-$43.88 area may pave the way to challenge the upside hurdle clustered around $50/bbl.

Gold prices continue to consolidate after slipping to a two-month low early last week. A weak rebound can hardly overcome the former support in $1,911.44-$1,928.82, indicating a bearish bias in the near term.

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Chart: Gold Trend