Oil drops as UK cases surge, gold hurt


Crude prices tumbled after the UK reported over 11,000 new COVID cases, the most since mid-February.  The crude demand recovery playbook has not been recently threatened at all, but this UK surge in COVID cases despite rapid vaccinations will raise many alarms over how quickly the rest of Europe will reopen.

Brent crude could be ripe for further profit-taking if more optimistic comments come from the latest round of Iran nuclear deal talks.  Brent crude might not find much support at the USD70 level, but a major pullback seems unlikely.


Gold did not do a good job of defending the USD1,800 level and now momentum selling has taken prices 38% below the USD1,919.20 high made at the beginning of the month.  Gold’s overflowing stimulus trade was ended yesterday by the Fed’s dot plots.  The taper tantrum trade is hitting gold the hardest right now and could last a couple more sessions.

Gold did see a little bounce after a surprise increase with jobless claims but that quickly faded.  Gold looks like a falling knife but eventually the longer-term prospects will attract buyers.  Long-term bets on gold could start to emerge closer to the USD1750 level, but some might wait and see if one last thrust lower eyes the USDcurde1,675 level.

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