Oil jumps, gold lower as dollar rally halted

Oil higher on soft US data

Crude prices are rallying as the dollar’s rally came to abrupt halt on growth concerns. ​ A weakening US economy should be bad news for oil, but today’s soft economic readings suggest that OPEC+ will easily be able to justify production cuts soon. ​ The oil market will remain tight whether business activity continues to weaken sharply or if economic growth remains choppy.

Gold/USD

Gold got its groove back after the dollar plunged after a round of ugly US economic data suggests Fed Chair Powell won’t be able to stick to the aggressive tightening script for much longer. ​ I don’t think anyone expects Powell to go Volcker on us and that has provided some support here for gold. ​ Powell still needs to justify his hawkish stance at Jackson Hole, but it seems markets may not believe him.

Gold looks like it is poised to stabilize above the $1750 level before we hear from Fed Chair Powell on Friday.

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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