Oil slumps, gold in ‘no man’s land’

US Data

A wrath of late-morning data confirmed what everyone knows, the US economy is headed in the right direction.  The miss with February’s factory and durable goods orders did not matter following the March ISM services index record growth reading.  The service sector is bouncing back stronger than expected and that is great news for the US economy.  The ISM Services index rose to 63.7, a strong beat of the 59.0 forecast, and an improvement from February’s nine-month low of 55.3.


Oil prices are lower as the global crude demand outlook remains unbalanced and as OPEC+ prepares to ramp up production.  It is hard to gauge the demand outlook since you have Europe still struggling with their vaccine distribution, while India and Brazil still have COVID cases trending higher.  The US looks like it’s ready to party like it’s 2019, but that won’t be enough to send oil prices much higher from current levels.  The rest of the world seems to still be putting restrictions on people moving and until that changes, crude prices will struggle.


Gold prices are in ‘no man’s land’ as investors await to see if the bond market selloff returns and sends the dollar higher.  This is a tough Monday for gold trading as Europe remains on holiday and Treasury yields look stable.  The aftermath of the robust nonfarm payroll report is dampening demand for safe-havens but could be raising some eyebrows about future inflation down the road.  Gold’s bottom appears to be in place but that will only be confirmed once everyone returns from holiday tomorrow.

Gold prices turned positive after a record ISM Service index reading showed prices paid for materials surged to the highest since July 2008.  Traders will keep a close eye on Wednesday’s Fed Minutes that could show if they were thinking about rolling back aid.

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.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya