An in-person OPEC+ meeting means get your popcorn ready and prepare for some fireworks. Energy traders are pumping up crude prices ahead of the OPEC+ meeting as expectations are high that they will deliver the biggest reduction in output since the beginning of the pandemic. This will be the first in-person meeting since 2020, which means they will probably go big here and deliver a cut of more than 1 million bpd.
Despite everything going on with the war in Ukraine, OPEC+ has never been this strong and they will do whatever it takes to make sure prices are supported here. Both the Americans and European leaders will not be happy with this action as both their respective outlooks clearly have a downward trajectory and would benefit with falling crude prices.
Gold prices are rising as investors embraced a soft manufacturing reading that suggests the Fed will not need to remain super-aggressive with the tightening of monetary policy. A new month has Treasury yields in freefall, which is great news for bullion. Downward pressures on inflation are growing and that should put a top on Treasury yields for now.
Gold might have tentative resistance at the $1700 level, but if bullish momentum remains strong prices could easily make a run towards the $1740 region.
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