Oil edges higher, gold eases

Oil higher as political OPEC+ prepares to continue gradual output increases

Oil prices are a little higher today, slightly paring heavy losses on Monday sustained on the back of intensifying lockdowns in China as the government has enacted harsh measures to contain the Covid outbreak. The country remains committed to its zero-Covid policy which will ultimately weigh on crude demand in the near term. No doubt it comes at a good time given current supply/demand dynamics but we’re only talking short-term relief.

Longer-term pressures remain and OPEC+ looks unlikely to do anything to alleviate those this week. The group has repeatedly stated its desire to remain apolitical and base its decisions purely on achieving a balanced market. Given how unbalanced the market is and the fact that at the center of the alliance is the country to blame for the most recent surge in oil prices, it’s hard to view a decision to not increase output targets as anything but political.

Gold eases further as risk appetite improves

Gold prices are easing again as risk appetite improves on reported progress in talks between Ukraine and Russia. The yellow metal was in strong demand as Russian troops crossed the border and hope of a ceasefire is seeing that unwind. There will remain a certain amount of support for gold still given the inflationary, geopolitical, and risk environment but we could see it ease a little further in the near term. The next key level for gold will be USD 1,900 where it saw strong support earlier this month.

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

Latest posts by Craig Erlam (see all)