Oil jumps on Putin comments, gold eyes Fed

Energy spikes after Putin’s announcement

The successful Ukrainian counter-offensive in the east appears to have triggered an act of desperation by the Kremlin with this morning’s announcement by Vladimir Putin confirming what had been rumoured on Tuesday. “Referendums” will now take place in various Russian-controlled territories and a partial mobilisation of troops will strengthen the country’s numbers after recent setbacks.

The decision has caused a stir in energy markets, with oil trading around 2% higher on the day, while European gas prices initially surged more than 6%. The move risks further escalating the crisis in Ukraine as Putin continues to threaten the use of nuclear warfare and cite the role of NATO during his increasingly aggressive rants.

Can gold recapture $1,680?

Gold is making small gains in the run up to the Fed decision but continues to see strong resistance around $1,680. This could prove to be a substantial barrier to the upside unless the Fed delivers a shock dovish surprise. It had been a key level of support over the last couple of years before finally breaking last week.

The fate of the yellow metal ultimately lies with the policymakers at the Fed and depends on just how hawkish they’re going to be. It’s about more than just the rate decision today, the new projections that accompany it will be critically important as traders learn how aggressive the Fed intends to be in the months ahead.

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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