Oil recovers, gold under pressure

Oil recovers amid soothing Fed words

Oil prices are edging higher again after falling around 20% over the last month in response to increasing recession fears. Inflation data on Wednesday didn’t help matters, with the market pricing in a strong possibility that the Fed moves up a gear and hikes 1% this month.

That saw crude prices slip further but soothing words from Bullard and Waller reassured everyone that 75 basis points remains the base case. Phew, just another 75 or two. Brent has moved back above USD 100 a barrel on those comforting words but promises to remain choppy amid a tight market and ongoing recession concerns.

A break of USD 1,700 would be a psychological blow

Gold has survived another assault on USD 1,700 today after briefly dipping below on Thursday. A stronger dollar and higher yields are wreaking havoc on the yellow metal, even in this risk-averse environment. The battle raging between inflation/interest rates and recession is creating quite the tug-of-war at times and we may see that increase in the coming weeks, with the economy seemingly viewed as teetering on the edge amid current rate projections. A move below USD 1,700 would be a psychological blow but USD 1,680 could be more significant.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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