Oil higher, gold stronger, CPI rises


The first inflation domino has fallen.  US consumer prices rose more than expected on both a monthly and year-over-year basis.  The headline March CPI reading increased 0.6%, hotter than the 0.5% consensus estimate and the 0.4% prior reading.  Core prices also posted a 0.3% gain, which was also one-tenth above the consensus estimate.  The year-over-year increase from 1.7% to 2.6% was impressive, but just above forecast.  The gasoline price index surged 9.1% in March, which was half of the seasonally adjusted increase in the all items index.

Everyone knew prices were going to jump and it will take a string of months of significant surges with prices to get a bigger reaction in the market.  Energy prices were obviously going to impact the March report and that is probably the market reaction was limited.


Crude prices are rallying after an optimistic OPEC monthly report showed an improved world oil demand outlook.  The report expects in 2021, world oil demand growth to be about 6.0 million bpd year-over-year, an upward revision of about 0.1 mb/d from last month’s report.

The J&J COVID vaccine setback was the big news of the day but it seems it will have a little impact on the short-term demand outlook.

WTI crude is also benefitting from a weaker dollar and mostly on continued optimism that AstraZeneca and J&J’s setback will be temporary and that the world will still be able to get their hands on other COVID vaccines.  The crude demand outlook for the US economy remains robust as they enough vaccine supplies to completely support a strong driving and air travel summer season.


Gold is rallying on expectations Treasury yields will remain capped following a largely anticipated surge in consumer prices.  The biggest increase in prices in over nine years will need to see a string of outsized gains to get US Treasuries to take out their recent highs.

A successful 30-year auction also helped push Treasury yields and the dollar lower.

Gold prices can continue to appreciate over the short-term if the dollar continues to slide.  Gold could have enough momentum to make a run towards the USD1780 level over the short-term.

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