Oil stable, gold loses ground


Settling in a range

Oil prices are softening a little on Thursday after nudging higher again a day earlier. Brent appears to be settling around the mid-point of the $90-$100 range as traders weigh up the impact of the OPEC+ cut against a bleak global economic outlook.

The zero-Covid rumours in recent days may have given oil another bump higher, as will the crude inventory data that showed a large drawdown. But with those rumours not confirmed and recession talk growing louder, it may be a little premature to be suddenly optimistic.

Not as bad as it seems

Gold bulls thought Christmas had come early on Wednesday when the Fed indicated a slower pace of tightening will be considered next month. But just as quickly as the good news was delivered, the caveat was yet another crushing blow. The prospect of further tightening overall was enough to wipe out the benefits of lower hikes and gold now finds itself trading around the week’s lows.

The question is, once the dust settles, will traders continue to view this so negatively? Slower tightening now buys time for the data to improve in a manner that could negate the need for more later, something 75 or 100bps hikes do not. This may not be such bad news after all for gold. But traders may wait for some encouragement from the data before getting too excited again.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.

Craig Erlam

Craig Erlam


Image and article originally from www.marketpulse.com. Read the original article here.