Oil edges lower, gold hurt

Oil

Oil prices remain a volatile trade as the crude demand outlook grows more uncertain as inflation remains uncomfortably high and has accelerated global growth concerns. ​ The risk-off tone on Wall Street is leading to a much stronger US dollar which is weighing on oil prices. Many energy traders remain fixated over the EU’s potential ban on Russian crude, which now seems to be losing momentum. ​ The EU is struggling to get Hungary’s support, which could suggest this embargo won’t happen anytime soon.

Earlier oil was supported after the EIA noted that there is currently almost a universal product shortage and that they are prepared to release more oil stocks if needed. ​ In this market environment, oil will struggle if China moves forward with city-wide lockdowns. Despite all the fears of weakening growth prospects, oil markets should be supported by a strong summer vacationing seasoning that will see lots of driving, flying, and cruise ship trips. ​

Gold

The dollar has firmly put gold in the danger zone and a break of the USD 1800 level could lead to further technical selling. Gold can’t attract any attention until this move in the dollar ends. ​ Right now, Treasury yields and the stock market are both declining, which should suggest we are getting close to capitulation with this de-risking moment on Wall Street. If gold breaks below the USD 1800 level, technical selling could support a drop towards USD 1750. ​

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.

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