Oil edges higher, gold consolidates

Oil pushing post-summer highs

Oil prices are edging higher again today after ending a little flat on Tuesday. There wasn’t much to take from the JMMC virtual meeting, with the group not offering any recommendations of production changes, meaning we’re left waiting until December to see what will happen in January.

The two vaccine announcements have removed any urgency to act, with crude prices soaring more than 20% from this month’s lows before settling comfortably above USD40. That is perfectly acceptable for producers in the OPEC+ group for now and, should they remain above these levels, may allow for production increases in January, as planned. Of course, that will also depend on how the rate of infections progresses under the latest lockdowns in Europe and restrictions in the US.

WTI is pushing USD42 again this morning, where it has met fierce resistance on multiple occasions over the last couple of months. The one exception being last week when it briefly surged above here before ending the day back below. Brent is pushing above USD44 this morning and pushing the upper end of its post-summer ranges. The upside pressures are continuing to build.

Gold consolidates after paring losses

Gold appears to have fallen into a range between USD1,850 and USD1,900 over the last week after coming under considerable pressure in response to the vaccine news. The yellow metal is suddenly looking very vulnerable despite seeing some reprieve as US yields and the dollar corrected themselves.

A little over-excitement in the immediate aftermath of the vaccine announcement has been met with a little more perspective now as the dust has settled. More vaccine announcements could continue to pile the pressure on gold though in the short term but beyond that, it could still perform well if the dollar remains under pressure.

For a look at all of today’s economic events, check out our economic calendar.


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.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
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

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