Oil eases near highs
Oil prices are easing again on Monday after the rally lost steam around the October highs late last week. Supply issues in Kazakhstan and Libya contributed to the latter stage of the rally, with the bulk since late December coming from more promising omicron data that indicates the economic impact of the new variant will be more subdued than feared.
While prices may be pulling back, aided perhaps by the broader shift in risk appetite in the markets, the fundamentals remain bullish for crude again. Especially if OPEC continues to struggle to hit its quota as part of the 400,000 barrels per day monthly increases, as demand strengthens.
Gold strength a red flag?
Gold saw some reprieve on Friday in the aftermath of the US jobs report, despite US yields continuing to rise on the back of strong wage growth and unemployment falling below 4%. But once again it’s seeing strong resistance at USD 1,800 and is rotating lower at the start of the week.
On the one hand, it’s hard to put together much of a bullish case for gold, beyond its perceived safe-haven status. But it’s also hard to ignore price action and it continues to put up a fight. And when it’s being aided by a dollar that’s softening in risk-averse markets while US yields rise, perhaps there’s more going on here. It will be an interesting one to watch.
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