Supply declined in the latest week
The huge rally on Wednesday is impressive, but it may just be a reaction to the inauguration of President Biden.
Traders believe a surge in debt-funded spending would be a positive for the global economy, demand for crude oil and commodity prices in general.
The silver markets have reached towards the $26 level during the trading session on Wednesday, an area that has been resistance more than once.
Gold markets have rallied significantly on Wednesday to reach towards the 50 day EMA yet again. More importantly, we have broken above significant resistance.
A surge in U.S. debt-funded spending would be a positive for the global economy and commodity-linked currencies like the Aussie and Kiwi.
Theres still a shot at some decent demand next week, but not enough to wake up the bull.
Bidens $1.9 trillion stimulus package remains in focus.
AUD/USD is trying to settle above the nearest resistance level at 0.7740.
The Euro has rallied pretty significantly during the trading session on Tuesday, as the 50 day EMA seems to have offered support.
GBP/USD did not manage to settle below the 20 EMA and is moving towards the resistance at 1.3625.
AUD/USD managed to get below the 20 EMA and is trying to settle below the support at 0.7675.
GBP/USD managed to get below 1.3600 and is trying to settle below the 20 EMA.
Technically, the key support zone is $2.552 to $2.485. The major resistance zone is $2.794 to $2.918.
Theres a chance that markets will have to pay for this in the form or sharply higher interest rates or tax hikes that could cap equity valuations.
Given the current downside momentum, we think the gold market is headed for a retest of the long-term retracement zone at $1780.50 to $1705.20.
Production is expected to decline in 2021
The crude oil markets initially rallied during the course of the week, but then gave back the gains to form shooting stars in both grades that I follow.
Silver markets have gone back and forth during the course of the week, showing signs of confusion in choppiness as we do not quite know what to do next.
USD/CAD failed to settle below 1.2625 and rebounded back above 1.2700.
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