Oil prices steady, gold under pressure

Oil steady after inventory boost

Oil prices are treading water following Wednesday’s rally which came on the back of the EIA inventory data. The surprising and substantial drawdown alongside record crude exports provided a boost just as the price was testing multi-month lows. There are numerous factors at play right now and we may be seeing traders taking a more cautious approach considering how close a decision on the Iran nuclear deal appears to be.

There remains plenty of doubt that it will get over the line but if it does, that could be the catalyst for another move lower and perhaps even take the price to levels not seen since before the invasion.

Gold struggling amid resurgent dollar

Gold is a little higher after slipping once more on Wednesday. It failed to get a sustained lift from the Fed minutes with the dollar quickly recovering its initial losses and wiping out any gains for the yellow metal. The US 2-year is not too far from its recent highs and the 10-year has also made moves higher over the last couple of days which could continue to pressure gold.

The inversion very much remains in play though which means there’s still seemingly a disconnect between what bond traders expect and what equity traders do. If the recession narrative starts to weigh more heavily on financial markets, gold could make another run at $1,800 and maybe even have more success this time.

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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