Gold might break a record while the United States and North Korea try to outdo one another

As anticipated earlier, oil was able to break through the $53/barrel mark on Thursday, going even higher, although it could not hang on at $54.30. The release of data on US oil inventories was good news: they dropped a lot, more than expected. But even moderately bad news could not seriously impact the value of the dollar.

It appears that the majority of investors will now be watching out for the data on the number of US oil rigs that will come out on Friday evening. The probability is high that the number of rigs will remain unchanged or even fall. In either case the market will likely take this as good news, since an increase in oil production in the United States can with confidence be called one of the most negative factors putting pressure on oil prices.

Gold has a chance to set all kinds of records amid the deteriorating geopolitical situation (and the situation with North Korea is continuing to deteriorate) and because of data coming out of the United States. After last week’s good news, investors are not happy about the new data, which show a decline in production and a rise in jobless claims. For this reason, gold has already broken through 1290 and just might test the upper boundary of the price range – the 1300 mark – before the end of this week.

Given the current situation in the United States, it is no surprise that the majority of US indexes are trading in the red: on average, US indexes lost 0.55-0.9% Thursday after the weak data came out. The dollar index is also displaying a negative trend. After a slight correction after Friday’s data came out, it is again moving toward 90.

The same negative trend is seen in the Asia-Pacific region as well: the majority of indexes have fallen 0.4-0.7%. Japan’s Nikkei 225 fell the least, by 0.05%, despite the fact that the Japanese yen is trading below 110 to the dollar.

Yuri Prokudin, exclusively for Olymp Trade

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