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Gold rally, oil higher on geo risks

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Gold/FX

Gold is rallying as investors run to safety over fears the Fed will aggressively tighten policy and as the list of geopolitical risks continues to grow:  The Russian-Ukraine standoff will remain a tense situation for the foreseeable future, North Korea may resume nuclear tests, and Iran nuclear talks are approaching a decisive moment. The dollar edged higher as the Treasury steadied into the start of the two-day FOMC policy meeting.

Oil rises over Russia/Ukraine jitters

Geopolitical risks sent crude prices higher as a tight oil market that is already battling low inventories seems vulnerable to shortages in the coming months.  Energy traders don’t know how the situation over the Ukraine-Russia border will unfold or if Iran will be able to reach a nuclear deal, but the odds are something won’t go right and that will likely lead to some supply shortages for the oil market.

WTI crude may struggle to rise above last week’s high until markets get past the FOMC policy decision tomorrow as it could trigger a major de-risking market-moving event that even oil prices would not be able to avoid.  The oil market is poised to see higher prices, but volatility in both directions should increase given some of the rising risks to growth outlook.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. 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. Prior to OANDA 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, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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