Oil steadies, gold whips around

Oil

Crude prices are all over the place as energy traders try to price in a tighter market thanks to OPEC+ while a hot inflation report sent the dollar higher.  Many traders are looking ahead to the US crude oil inventory data which could show yet another significant drop in stockpiles.  The supply deficit story along with still improving demand in Q3 suggests whatever oil weakness is happening could be short-lived.  The oil market could get a lot tighter very quickly and that could mean the recent pullback might have run its course.

Gold retreats after US CPI jumps

Gold gave up earlier gains after hot inflation data sent the dollar higher as investors scrambled to sell Treasuries.  Expectations were for inflation to remain tame or slightly ease and that did not happen today.  Despite a little inflation shock, after traders processed the report, the argument can still be made that most of this will be transitory.  Used cars and trucks were responsible for one-third of the seasonally adjusted increase.  The playbook for the Fed still looks like a taper announcement to be made at Jackson Hole, or at the September policy meeting at the latest.  Policy normalization expectations may move forward following today’s data, but the bull case still remains in place for gold.

After the dust settled from the hotter-than-expected CPI report, gold prices edged higher as this still probably won’t move the needle for the Fed.

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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