Oil surges, gold stronger

Oil 

Crude prices initially surged as China’s fight against COVID appears to be headed in the right direction, but gave up a good amount of gains after US officials signaled that the strategy on Russian crude could switch from embargo to tariffs. ​ If the West decides to slap tariffs on Russian crude instead of an embargo, that would keep supplies on the market, which should put a cap on the recent crude rally. ​ ​

The oil market remains tight but if the EU embraces the strategy of putting tariffs on Russian crude instead of phasing them out, the rally in oil prices might show some exhaustion here. ​

Gold gains as dollar dips

Interest rate differential expectations have narrowed and that has sent the dollar lower, which has given the greenlight for gold investors to buy the dip. Gold is following the broader market rally and is now comfortably above the USD 1800 level, which could trigger further technical buying. ​ It seems the dollar is finally ready for a pullback and that could last a couple days if risk appetite continues to show signs of ​ getting its groove back.

Gold pared gains as Treasury yields surged higher after earnings and a retail sales report suggested the consumer is still strong and that is leading to expectations that the Fed won’t have to ease up with tightening policy. ​

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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