How long until oil bulls jump back in?
Oil prices are slipping more than 1% at the end of the week, pulling back a little further from the highs just short of $90. The decline came shortly after the EIA inventory data on Thursday, which showed a surprising rise against expectations of a 2.1 million barrel decline. The White House also looking to apply further pressure in response to higher prices may be contributing to the pullback, although as we’ve seen before, their power appears quite limited.
Obviously, that’s no game-changer but it came at a good time when crude was running into resistance at USD 90 and losing momentum. It’s a big psychological barrier as once that goes, people are just counting down the days until we have triple-figure oil. It’s a big deal, but one we’ll have to wait a little longer for. The question is how long until traders jump back in. Given the fundamentals, I don’t think we’ll be waiting too long.
Can gold propel higher after the breakout?
Gold is marginally lower on Friday but finding support around USD 1,830 where it experienced significant resistance in recent weeks. The break above this level was big for the yellow metal and could propel it higher in the coming weeks. That starts though with holding above USD 1,830, as confirmation of the breakout will be a big confidence boost for gold bulls.
The move suggests gold is once again playing the role of the inflation hedge and a safe haven in these unstable markets. A lot of tightening is priced into the markets but inflation is running hot and there doesn’t appear to be much confidence that it will be enough. It’s no wonder there’s so much anxiety out there.
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.