Oil gains ground, gold edges lower

Oil higher as OPEC+ falls further short of targets

In a further sign that calls for OPEC+ to raise output further are a wasted effort, IEA reported that compliance with pandemic-agreed cuts rose to 136% last month, up from 129% in January. In other words, the group is not only failing to hit its quotas, it’s missing them by an estimated more than one million barrels per day. And that’s before sanctions were imposed on Russia which have disrupted its exports.

It’s starting to get a little desperate now and the situation is only going to get worse as Russia contends with Western sanctions. The IEA has provided a list of ways to reduce demand as oil looks set to settle at more than USD 100 a barrel for a sustained period of time. It’s easy to call on OPEC+ to do more but there’s only a small number of countries with ample spare capacity and one of those has started making noises recently around supporting increasing output. I guess we’ll see how loud their voice is and how influential Russia ultimately proves to be.

Gold eases as dollar rallies

Gold is edging lower again on Friday in risk-averse trade. The yellow metal has been well favoured recently in these conditions but we’re only seeing mild risk-aversion today and not on the back of any specific developments.

It comes in a week when the Fed has turned notably more hawkish so we may be seeing it lose a little hedge appeal on the expectations of aggressive tightening. The dollar is getting plenty of support today which will also be pressuring gold as we head into the close.

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