Oil
Oil is trading very close to levels witnessed last in late May when a barrel was priced more than 90$.
Expectations for quantitative easing in the US along with pressure from inventory results and Middle East tensions have kept oil trading at these price levels.
Bernanke’s speech yesterday had a bearish impact on oil with low growth expectations from the U.S. economy. The duality of the Fed was discussed during Bernanke’s testimony yesterday. Firstly he discussed inflation and the possibility of more actions to stimulate the economy, whether by another QE or by extending Operation Twist. The second mandate by the Fed will be to improve job hiring which is currently still lagging with an 8.2% unemployment level.
Today we can await another speech by Bernanke and residential results for housing starts and building permits in the U.S.
It would be surprising to hear any news with particular impact from the second speech. For the most part we should expect a decline in the price and a bearish outlook.
Gold
Gold, used as a tool to hedge inflation, has been in a critical position for some time now.
It seems that 1600$ is the barrier for high expectations for other stimulus tools that will be used by the fed in the near future.
Opposite news or no news at all can convert expectations to relate prices at 1550$ in the short term. There is a high possibility of this outcome in the near future and maybe even this week.
The next couple of days will be crucial for inflation expectations, and as a result the price of gold.