Oil pares gain, investors love gold

Oil dips as Iran/US talks progress

The oil price rally has hit a tentative wall as Ukrainian tensions cannot overcome the prospects of additional Iranian supply and possibly more crude output from OPEC+. Yesterday, Iran Foreign Ministry spokesman Khatibzadeh noted that significant progress has been made in reviving the 2015 nuclear deal. Energy traders are looking at a long list of geopolitical risks and see the Biden administration being extra motivated to make a deal with Tehran.

Crude prices still seem like they have a good chance to make a run towards the USD 100 level, but it might take a major escalation by Russia for that breakout to happen.  The deployment of Russian troops to two regions in Ukraine and prospects of various sanctions against Russia will likely lead to further tense moments in the coming days.

Whatever dips happen with crude prices will likely be short-lived.

Gold

Gold is having a great month as investors scramble for both safe-havens and inflation hedges.  Russia-Ukraine tensions continue to intensify and that is driving a massive move across commodities.  The likelihood of a regional war seems high and that will likely keep inflationary pressures elevated for much of the year.  Bullion seems like it is taking a little break right now, but investors will soon be saying, “I love gold” as geopolitical and growth concerns will drive safe-haven demand.

Gold has tentative resistance at the USD 1920 level, but beyond that lies the USD 1950 area.

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