Gold price: Uphill after Fed statement

The Fed is expecting an unprecedented economic downturn and has announced that it will use “full range of tools” to support the economy. The European central bankers’ decision will be published at 1.45 p.m., which will then be explained at a press conference with ECB chief Christine Lagarde (2.30 p.m.). In the morning, the market players learn how the economy, the labor market and inflation have developed in Europe. With regard to the inflation rate, the slump in energy prices should first speak for low rates. However, investors should not be too sure that consumer prices will behave similarly “civilized” as after the 2008/2009 financial crisis. The warning voices were joined this week by the chief strategist of the JPMorgan asset management, who has come across real estate and precious metal investments in view of this risk.

 

Oil price: Violent rebound upwards

Serious investing does not currently appear to be possible, particularly in the case of US WTI crude oil. This week’s next contract saw extreme daily changes of minus 24.6 percent (Mon), minus 3.5 percent (Tue) and plus 22.0 percent (Wed), which peaked the CBOE oil volatility index to more than 222 percent let rise. If the decision to loosen the lock-down mode turns out to be wrong, the oil price should not benefit.