Europe Lower Due to Geopolitical Concerns | Oil and Gold Under Focus

Traders are still not sure which direction the gold price is going to move
Oil traders are holding on to their positions
the S&P index is likely to test the 2800 mark

European markets are trading lower as investors have reacted to increase in the geopolitical situation over in the Middle East. Higher oil prices were bound to make investors concerned and this is what we are seeing today.
Traders are still not sure which direction the gold price is going to move. The consolidation pattern is strong and it isn’t breaking in any firm direction. The range base trading- from 1366-1300 has one major denominator, the dollar index. The Federal Reserve officials are still backing their case that there could be more interest rate hikes this year and this has pushed the dollar index higher. Any strength in the dollar index is negative for the dollar.
On the geopolitical front, we still have a lot of concerns after Israel shot a large number of prostrations. Donald Trump is determined to punish any country and company would do any business with Iran after the US sanctions are imposed. I do think there is a serious threat for the Dollar as a benchmark currency more than ever as Europeans are not on the same page as Trump. China-US trade spat isn’t resolved and we are somewhat more in a gridlock. Combined together, these geopolitical apprehensions do provide some support for the gold price.
Oil traders are holding on to their positions as they see that there is more juice to come out of their trade. Upcoming Iranian sanctions and OPEC’s commitment to keep their supply curbed are behind the move. It is only a matter of time before we see a headline print - Brent touched the level of $80. Who would have thought about that when oil was trading near its early thirties because renewable energy and boom in the US shale oil kept the firm lid on the price. Investors were certain that oil price is not going to touch those levels. But now that we are close enough to that historic price mark of $80, it seems like renewable energy or US shale oil doesn’t even matter. It is all about Saudi Arabia, if it wants to push the price lower, it can just open the tap more and the price would fall and if it wants to push the price higher, it needs to twist the tap in the other direction.
I do think that the $80 is the price level where traders would start taking profit off the table, it would make sense after a remarkable bull run.
Equity Markets
US equity markets are roaring again, the S&P index is likely to test the 2800 mark once again and it would be a further confirmation that the bottom is in place. If the US is able to avoid the trade tensions with China, we do think that the path of the least would be skewed to the upside. The trade talks are in full swing this week and trade officials are instructed to find a solution to resolve the trade dispute. It would be the US which has to show more softer stance now because China so far has already done the best from its side and indicated that there is no further room for any sharp maneuver. 
Back in the UK, the focus would be on the average earnings index and claimant count change data.  The Bank of England had to face embracement last week when it lowered its inflation, growth and wages forecast. Rising oil price could soon have an impact on the inflation but the wage growth element does not have any silver lining. With Brexit deadlines approaching soon and EU employee/employers looking for alternative places, we do think that the wage growth story would take a long time to heat up again.