Oil weaker on demand outlook, gold steadies

Oil

Crude prices are tumbling as energy traders reassess the short-term demand outlook given the disappointing summer driving season and as the US economy starts to show further signs it is quickly weakening. This morning’s data did not do any favors for crude after jobless claims data hit an eight-month high and the Philly Fed index showed a massive slowdown.

The oil market is starting to see more supplies from Libya and with the pace of weakening global economic data suggesting, we might not need to see a whole lot more production. ​ Oil is starting to find a home in the mid-USD 90s and that could last given the aggressive pace of tightening central banks are taking with fighting inflation, which will bring forward recessions calls. ​

Gold higher after ECB, South African hikes

Gold prices got a boost after both the ECB and South African central bank surprised markets with larger-than-expected rate hikes. ​ It looks like everyone is taking the Fed’s lead in delivering large rate hikes, which is taking some of the oomph out of the dollar rally.

Right now, gold is not acting like a safe-haven so the restart of the Nord Stream 1 pipeline is good news. ​ Tensions among the US and China continue to simmer and that could get interesting when President Biden meets President Xi in less than two weeks. China continues to object to Nancy Pelosi’s visit to Taiwan, which would be the first time the House Speaker has traveled there in 25 years. ​ ​ ​

Gold may be stuck around the USD 1700 level until we get past next week’s Fed meeting.

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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