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Oil volatile, gold shines

Oil market remains tight

‘Buy the dip’ might be dead for the stock market, but it probably should still work for energy traders. ​ Despite all the fears of aggressive central bank tightening of monetary policy and the slower economic growth that will ensue, the oil market remains very tight.

With gasoline prices surging above 5 dollars a gallon, the Biden administration’s call for oil companies to ramp up refining capacity was easily met with an explanation that they will need the government to provide policies that support the industry domestically. ​ Even if the government were to change its stance on energy, and provide some capital investment that won’t have an impact on prices before the midterm elections in November. ​ The oil market will remain very tight until crude demand destruction becomes more noticeable in the fall.

Gold/FX

Gold’s back. Gold has resumed its role as safe-haven as financial markets worry about aggressive central bank tightening globally and US economic data decelerates. Recession fears are growing and that is triggering an exodus of equities and influx of safe-haven purchases of bullion. ​

The dollar top is in place as the other major central banks follow the Fed with strong tightening signals. Adding to the dollar’s weakness was reports that President Christine Lagarde told finance ministers that the European Central Bank’s new anti-crisis tool will launch if borrowing costs for weaker nations climbs too fast.

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 [4]

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