Oil higher, gold volatile

Oil jumps on disruption fears

Crude prices have slingshot higher as Russia’s turmoil will worsen and likely lead to severe supply disruptions for oil markets.  The oil market is very vulnerable to a major shortage of supplies now that OPEC+ has ratified a humble supply hike.  With oil prices likely to remain elevated for the foreseeable future, the only thing that will send prices down is if demand destruction becomes noticeable.  For every USD 10 increase in oil, that will take off 20 basis points in GDP.  If we have another 10-20% move higher with oil prices that could finally put an end to the relentless surge higher with oil prices.

Gold

Gold prices tumbled after the Kremlin said a Russian delegation will be ready to continue talks today. After rallying above the USD 1950 level, gold prices spiked lower to USD 1916 before stabilizing above the USD 1930 region. Demand for safe-havens will remain elevated as this is likely the very early stages of the Russia-Ukraine war.  Despite all the headlines about a continuation of talks, the Kyiv Mayor has noted that Russia is gathering forces closer to Kyiv. Gold will remain very sensitive to incremental updates but should still see a strong move higher as geopolitical tensions and growth concerns will not be going away anytime soon.

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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