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Oil market stays tight, gold ready to shine

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Oil

Crude prices rallied as the oil market looks like it will remain very tight after indirect nuclear deal talks between the US and Iran ended without result. ​ The supply outlook for crude is looking vulnerable and could see some disruptions lead to much higher oil prices. ​ Ecuador’s oil production is declining rapidly, down 1.8 million barrels during the 15 days of protest. ​ Libya is suspending oil exports from the Es Sider port.

Unless the EIA crude oil inventory report posts a surprisingly large drop in demand and significant production increase, oil prices should be poised to climb higher.

Gold rises on inflation concerns

Gold prices are higher as the bond market selloff eases. After inflation hit a record high in Spain, pressure has grown for the ECB to be a bit more aggressive and that helped soften the dollar. ​ Risk appetite will struggle to return here as inflation continues to hamper the outlooks for most companies. Gold is still stuck in a wide trading range, but a collapse below the USD 1800 seems less likely as the dollar peak might be in place. Wall Street will likely lean towards anticipating more rate hikes from the ECB, that will drive a weaker dollar and weakening growth outlooks which should prompt the safe-haven buying of gold.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. 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. Prior to OANDA 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, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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