Oil stalls, gold moves upwards

Oil rally stalls as nuclear talks take a step forward

Oil prices are a little flat at the start of the week with the rally losing a little momentum after nuclear talks between the US and Iran appeared to make positive progress. It seems we’re into the final stretch, one way or another, and Biden’s decision to restore sanction waivers could signal that they’re heading in the right direction.

Biden has an additional incentive to reach a deal, given the sky-high crude prices and what a deal could do to ease the tightness in the market just before the midterms. He’s tried a coordinated SPR release and let’s be honest, it achieved very little. This could make a real difference at a time when crude appears destined for USD 100 and OPEC+ can’t hit their output targets.

Gold continuing to find support

Gold is once again pushing higher even as central banks continue to gravitate towards the market’s view on inflation. The ECB was the latest to concede defeat – or at least signal it soon will – while interest rate expectations elsewhere are rising. Even against this backdrop, gold remains in favour and has driven its way back above USD 1,800.

Whether it’s safe-haven flows or the belief that central banks aren’t doing enough to get to grips with inflation, the yellow metal is continuing to see plenty of love. The next test is around USD 1,830 where it’s struggled in the past, with the January highs around USD 1,850 then key.

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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