Oil steady, gold flat

Oil

Crude prices are little changed as traders refuse to put on any major positions as too much uncertainty persists with the short-term crude demand outlook and while trading volumes continue to fall leading up to the holidays.  A force majeure from a key Nigerian export terminal and a weaker dollar have provided some support for oil prices.

The omicron variant could still lead to more restrictive measures across Europe and Asia, but prices won’t break since OPEC+ can easily adjust its production levels.  Oil prices seem like they could go much higher in the New Year once the demand outlook is beyond the current omicron wave.

Gold dips after US GDP

Gold prices edged higher as Wall Street remains fixated over the growing list of short-term risks.  Omicron remains the focus for most traders and that should support gold prices to remain close to the USD 1800 level.  The dollar should start to trade relatively flat into year-end as quantitative tightening by the Fed has mostly been priced in.

Gold dipped after a better-than-expected final reading of third-quarter GDP, that showed slightly more inflation and economic growth. The GDP report saw upside revisions across the board, with the headline revised higher from 2.1% to 2.3%.  Personal consumption improved from the preliminary 1.7% reading to 2.0%, while pricing readings edged higher.  This data was old but did confirm the narrative of growth remaining strong and pricing pressures still are approaching their peak.

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