Oil slipping ahead of inventories
The oil recovery didn’t last long, with Brent and WTI prices down more than 1% again today.
Brent fell short at $41 while WTI ran into resistance at $38.50. The fundamentals for oil remain troubling and significant waves of Covid in the winter months won’t help matters.
OPEC+ may have to stomach output cuts remaining in force longer than they would have otherwise liked, especially if we see further travel and other restrictions imposed, as we’re already seeing, as cases surge. The inventory data will be interesting today, with a rise in inventories potentially being the catalyst for another decline in prices.
Gold cautiously higher
Gold is edging higher again on Thursday, gaining as the dollar continues to pare recent gains. The moves are relatively small though and depend heavily on dollar selling gathering momentum and, as yet, we’re not seeing that. The dollar appears to have broken out of the upper end of its range which could be problematic.
The greenback is dragging its feet though which may be encouraging for gold bulls. The ECB may have a hand to play in things today. Should the stimulus expectations be unfounded, the euro could rally once more, putting further downward pressure on the dollar and giving gold prices a boost. That said, the euro still looks strong going into the event as expectations have pared back, perhaps the opposite (dovish ECB and weaker euro) will be the path of least resistance.