We are expecting a bullish rally in the precious metals market to develop. However, fears that a ‘second wave’ of COVID-19 infections is on the way has caused safe haven demand to rise again. The gold is traditionally a safe haven, and has benefitted from the latest rise in safe haven demand. Germany’s infection rate rose for the first time in four days after outbreaks in the meat industry and at refugee centers. Hong Kong Has First Death Since Mid-March. U.S. virus cases accelerate.
Trading recommendation: Buy 1747 and take profit 1765
OPEC and its allies stepping up compliance efforts on production cuts bolstered investor sentiment. The US oil and gas rig count fell 7 in the week ended June 10 to 189, rig data provider Baker Hughes said, as oil-focused rigs continue to be pulled from fields. US oil production averaged at 10.6 million b/d in the week ended June 17, US Energy Information Administration weekly estimates showed, down 2.5 million b/d from all-time high 13.1 million b/d in mid-March. This is a positive signal for oil prices!
Trading recommendation: Buy 39.00 and take profit 41.00
Since the lockdowns of business and consumer activity to combat the Ccovid-19 pandemic in early March, the Federal Reserve’s balance sheet has swelled to over $7 trillion through buying everything from U.S. Treasuries to corporate bonds and mortgage backed securities, providing a backstop for financial markets analogous to the insurance provided by the purchase of a put option by an investor. Loan terms under the proposed Main Street nonprofit loans, including the interest rate, deferral of principal and interest payments, and five-year term, are the same as for Main Street business loans. The minimum loan size is $250,000 while the maximum loan size is $300 million. This is a positive signal for the stock market!
Trading recommendation: Buy 3080 and take profit 3160.