Oil flat, gold edges higher on weak dollar

Oil flat, erasing earlier gains

Oil prices have turned flat on Tuesday after ending with small losses at the start of the week. That came after Brent hit USD 86 and WTI fell just short of USD 84, both interesting levels of support and resistance in years gone by. Of course, it’s been some time since both traded at these levels so we should perhaps bear that in mind.

Ultimately, the medium-term outlook remains bullish for energy and while we may see short-term moves on the back of favourable weather reports, for example, corrective moves may continue to be quickly snapped up. The energy market remains tight and those able to ease those pressures are currently sitting on their hands and could do so for a while, yet.

Gold edges higher on softer dollar

Gold is creeping higher on the back of a slightly softer dollar which has fallen to a three week low. This comes as risk appetite continues to improve and yields across the board rise. This is supporting gold a little for now and continues the rising trend it’s established in recent weeks but, it’s been sluggish, to say the least.

The yellow metal rallying in a risk-on, rising rates environment would certainly be an interesting development. Higher inflation and a weaker dollar could be argued to be supportive factors but still, it doesn’t strike me as being a relationship that can be sustained for too long. Perhaps that will depend on just how much the dollar falls out of favour with it clearly being a major driver for gold prices.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
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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