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Energy & Metal Markets Trade in Green, Gold Fails to Join Rally

February 17, 2020 at 19:12 by Vladimir Vyun

Crude oil, natural gas, and most metals were trading in green during Monday’s quiet trading, though gold posted a small loss. Trading was lighter than usual due to Presidents’ Day holiday in the United States. The market sentiment was cautiously optimistic as investors were hoping that China will be able to find a way to defeat the deadly coronavirus outbreak. According to yesterday’s official data from China, the number of confirmed cases increased on Sunday more than the day before but there were fewer deaths. China is the world’s second biggest economy, therefore the epidemic has a huge negative impact on the global economy. Thailand and Singapore lowered their growth forecasts because of the hit to tourism due to the outbreak, and many other countries will feel the impact too.

The news about the epidemic led to higher demand for safer assets, hurting riskier ones. That explains the strong rally of gold at the start of the outbreak and the big drop of crude oil. But as market participants become more hopeful, bullion loses its luster, while crude gets a chance to recover. Oil had an additional supportive factor in the form of expectations of deeper oil production cuts under the OPEC+ agreement.

Futures for delivery of WTI crude oil in March rallied by $0.28 (0.54%) to $52.33 per barrel as of 19:02 GMT on NYMEX today. April contract for Brent crude advanced by $0.28 (0.49%) to $57.60 per barrel on ICE. Futures for delivery of gold in April fell by $2.3 (0.14%) to $1,584.1 per troy ounce on COMEX. March silver advanced by $0.03 (0.15%) to $17.76 per ounce.

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