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Oil continues to decline, gold is up thanks to Trump

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Brent continues its decline, which began after crude oil inventories data release on Thursday. The asset has lost more than $5 or 7.5% since the beginning of the current decline. The nearest key zone for bears is $62.7-62.9/b. If they manage to break below it, the quotes will probably drop to $60. However, the market is already oversold, which was confirmed by the all oscillators. Therefore, a short-term upward correction with a target of $64.5 is quite likely to begin in the nearest future.

According to the Reuters survey, OPEC oil production in May amounted to 30.17 million bpd, which is 60,000 bpd less than in April. These are the lowest values since 2015. Thus, the level of compliance with OPEC + production shortens in May (96% against 132% in April) due to increased production in Saudi Arabia, as well as in Iraq and Angola. The largest decline in oil production was recorded in Iran. Its supply drop amounted to 400,000 bpd. Production in Venezuela fell by 50,000 bpd. Saudi Arabia increased production by 200,000 bpd to 10.05 million bpd.

Gold added more than $20 (1.5%) over the past day, the quotes returned to the key level of $ 1,300/oz. If this level is overcome and the price fixes above $1303-1305, the trend will change. The movement followed Donald Trump’s statement, which triggered a new wave of concern in the market. At night, the US president announced that Washington would impose 5% tariffs on Mexican goods. The new tariff will come into force on June 10, if Mexico does not stop the flow of migrants from its territory.

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Source: https://olymptrade.com/
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