Oil dips to USD 100, gold consolidates

Oil hovers around USD 100

A second weekly decline in oil prices has eased some of the pressures on the global economy going forward, thanks to a combination of factors including huge SPR releases and Chinese lockdowns. Still, at around USD 100 a barrel, prices are very high and there remain significant upside risks going forward.

How prolonged and widespread Chinese lockdowns become could be a key factor in the short-term, with it being such a large consumer and some cities with very few cases already imposing harsh restrictions. The zero-Covid approach in Beijing could weigh heavily on economic activity, with the hope being that a quick eradication can once again see it rapidly spring back. If not, it could help keep a lid on oil prices.

Gold consolidates further

Gold is trading around the same level it was yesterday, the day before that, the day before that and so on. Despite the spike in volatility seen elsewhere this week as a result of the hawkish Fed shift, gold has been unmoved. We continue to see consolidation in the yellow metal, with the daily ranges tightening rather than widening as you may have expected. There are multiple forces at play here but traders are seemingly clinging to their traditional inflation hedge and safe haven.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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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