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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