Oil back above USD 100, gold rallies

Oil prices edge higher

Crude prices have come down enough and seem poised to stabilize above the USD 100 a barrel level until energy traders have clarity over geopolitical developments in Ukraine and with Iran nuclear deal talks.  Not enough crude demand destruction has happened to warrant prices falling below the USD 90 level and with inventories continuing to decline, this oil market will likely remain tight for quite some time.

WTI crude seems poised to continue to edge higher if no major progress happens with Ukraine-Russia talks.  The Saudi Crown Prince noted the kingdom is keen on maintaining the oil market balanced and stable.

Oil prices edged higher after Secretary of State Blinken said he doesn’t see signs that Putin is prepared to stop and that the US is concerned China is considering helping Russia.  This war seems like it won’t be ending anytime soon and that likely means oil prices could have another strong rally here.

Gold

Gold prices rose as investors digest the Fed’s decision and try to figure out how the war in Ukraine will impact inflation and growth. It seems risks of much more aggressive tightening by the Fed is on the table, but traders need to remember that real rates are still deeply in negative territory. Treasury curve flattening is screaming growth concerns and that should help drive some safe-haven flows towards gold.

Gold should continue to grind higher here but could find resistance around the USD 1980 level.

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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