Dollar index slips from a 14 years high and push the precious metal price higher -fx trading

By | January 27, 2017

Dollar index slips from a 14 years high and push the precious metal price higher -fx trading

There has been a massive chaos in the energy sector from the very beginning of the year 2016.To be precise this whole year was full of major economic and political events. And according to the opinion of professional traders fx trading was extremely difficult due to instability in the U.S dollar and energy sector. The green bucks were supposed to hike their interest rate before the mid of June but to contact poor economic performance the FED delayed their interest rate hike in the global economy. However, in the last FOMC meeting minute, the FED come up with a hawkish hike on 25 basis point and dollar become significantly stronger against its all major rivals. And in the last OPEC meeting the stick decision was made on oil production capping and it also brought stability in the price of oil.

Previously the price of oil was sharply falling down in the global economy and most of the investors were in fear due to chaotic conditions of the energy sectors. But things settled down to great extent in the global economy after the U.S presidential election. Donald Trump speech gave the dollar a strong ground against its all major rivals in the forex industry. He proposed to increase the fiscal spending and tax cut for the U.S consumer. Such a great step from the newly elected president created a positive sentiment into the mind of the U.S consumer. A strong positive sentiment always pushes the dollar higher in the global market. But in the last trading session, the dollar slipped from its 14 years high in the market. Upon the weakness of the U.S dollar, the oil price sharply rallied in the global economy and most of the professional investors went along with the weakness of U.S dollar.

The price oil went up in the Monday’s trading session as the supply tightened in the market by OPEC hard decision. The price of Brent crude oil went up by 31 cents in the market which result at $55.41 per barrel. On the other hand, the price WTI often known as the crude oil gained 31 cents in the market and traded at $52.21 per barrel. Most of the professional traders are thinking that the price of oil will go higher in the near term future since there is a high chance that the U.S economy will tumble in the near term future. With the recent weakness of the U.S dollar the buyers have just stepped in the forex trading industry in order to pick the bottom of the currency pair. But the experts are still not ready to go short in the U.S dollar since they know the year 2016 has nothing to offer to the market. Most importantly the market will cease its volatility since the Christmas holiday is knocking at the door.

Most of the professional traders in the financial world have already booked their profit and currently staying in the sideline to trade market from the next year starting. On the country, Russia being one of the leading oil producers in the world already stated that they are going to cut their oil production to 1.8 million barrels per day which have ceased the over production problem of this industry. It true that most of the countries are showing a great deal of response to the OPEC decision but the leading economic country U.S has increased its oil rig from 12 to 512 in the last one year. However, they have already informed the OPEC that they will also abide by the oil cap rule from the beginning of the next year.

The dollar slipped lower against its all major rivals in the last week trading session and created a decent rally in the price of gold. The gold is now trading at a critical level and most of the expert gold investors are thinking that the price of gold will go higher from this level. The price of gold has started its downfall in the market after it secured a record high in the year 2011 at $1900.In the eyes of trained professional, the gold might be the best buying assets for the traders in the next year since a slight weakness in the U.S dollar will push the price of gold significantly higher in the market. However the price of gold fell significantly in the last six week and traders are not yet ready to buy the gold, Experts are waiting cautiously for weak data releases of the U.S so that they will enter the bullish rally with the support of fundamental new releases.

The price of silver was down in the market in last week trading session and currently, it’s heading towards the six months low in the market. Most of the professional trader of the fx trading industries are now on the side since they know the market tends to cease its volatility at the end of the most. Most importantly the market sometimes exhibits ridiculous behavior in the global market before the closing of the year. So this year is pretty complete for the trader and the market has already absorbed all the major event of the market. Now the traders are waiting for the fresh news catalyst from the year 2017.But the year 2017 will be extremely crucial for the gold traders since they might find the strongest rally in the price of gold since 2011.

Samantha Jones

Creative writing by Samantha Jones

 

Samantha Jones | Writer & Editor
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