Oil edges higher as EU moves closer to a Russian oil embargo
It seems the EU is moving closer to an oil embargo which some may argue is overdue in light of Russia’s aggression in Ukraine. Naturally, the devil will be in the detail but the moves we’re seeing in crude prices suggest the small print won’t live up to the headlines. A phasing approach, while still positive, just won’t cut it. But this is the bind the EU has left itself in after years of allowing itself to become so dependent on Russia.
Ultimately, the oil market remains in consolidation and the range is being squeezed which could make for an interesting few weeks. A breakout from this choppy range could be quite explosive and despite the impact that Chinese lockdowns are having, the risks remain tilted to the upside. Especially if the EU manages to deliver on an immediate embargo.
Can gold stabilise after the recent plunge?
It’s been an awful couple of weeks for gold since coming close to breaking above USD 2,000 for the first time in over a month. The dollar rally has been relentless and it’s been a real drag on the yellow metal. Which begs the question, is anything going to stop the dollar in the near term? And if not, what does that mean for gold.
Gold will continue to see safe haven and inflation hedge appeal so I don’t see the recent rate of decline continuing, even if the dollar remains strong. That said, there isn’t much of a bullish case for the yellow metal if the dollar continues to tear higher. Can it stabilise around these levels? It’s doing a good job at the moment, albeit strongly aided by a small dollar correction.
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