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US, China PMI weigh on oil, gold steady

Oil hit by PMIs

It’s been a shaky couple of days for oil prices, with the PMIs almost certainly having a large role to play. Slower growth in the world’s two largest economies is hardly music to the ears of oil bulls, especially when one is seeing rising cases of delta. WTI fell back below USD 70 today after peaking around USD 74 and it continues to look vulnerable in the short-term.

This may be a little bit of an overreaction to the data, with it having come at a time when prices were a little overbought and trading around their summer highs. But with WTI back in the USD 69-70 region, it will have to arrest the slump soon or risk an early test of the July lows around USD 65.

Gold steady ahead of jobs data

Gold remains fairly steady, consolidating once more after a surge in activity in the aftermath of the Fed meeting. The price rose back towards USD 1,833, where it once again ran into resistance, only to give back some of those hard-fought gains. It has since stabilised above USD 1,800 and the trend remains favourable.

Working in gold’s favour is the fact that yields continue to creep lower, aided by that weaker manufacturing PMI which has lent a little support to the dollar. Interestingly though, the employment sub-index could have given an encouraging nod to Friday’s jobs report so things may be looking up again soon enough.


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Craig Erlam

Craig Erlam [5]

Senior Market Analyst, UK & EMEA at OANDA [6]
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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