Oil rally faces near-term risks
Oil prices are edging higher after pulling back a little at the end of last week. They remain near their highs though, with Brent holding above USD50 a barrel. I do wonder whether it is running out of steam though and given the near-term downside risks as Germany goes into a more severe lockdown and the US sees record cases and fatalities, with the trajectory still in the wrong direction going into the holiday period, that could create some downside pressure in the coming weeks. With OPEC+ remaining flexible though, downside risks may be more limited than we would otherwise see.
Gold paring gains ahead of the Fed
Gold is struggling again today and broken back below USD1,830 this morning where it had been seeing some support over the last week or so. We could see more downside over the next couple of days, at which point we may have a better idea of what Congress and the Fed have in store, both of which could be very bullish factors for the yellow metal. The key support for me is USD1,800 ahead of the meeting on Wednesday. After that, it will depend on just how aggressive the Fed will be.